Procurement Reforms in GoAP
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Procurement Reforms in GoAP by Sathish Chandra, IAS, Secretary, I&CAD (Projects). Irrigation & Command Area Development Dept Government of Andhra Pradesh. Agenda . Irrigation Sector outlays in GoAP About EPC Contracts eProcurement outcome Auto Bid Evaluation Reforms/ BPR in Procurement

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Procurement Reforms in GoAP

by

Sathish Chandra, IAS,

Secretary, I&CAD (Projects)

Irrigation & Command Area Development Dept Government of Andhra Pradesh


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Agenda

  • Irrigation Sector outlays in GoAP

  • About EPC Contracts

  • eProcurement outcome

  • Auto Bid Evaluation

  • Reforms/ BPR in Procurement

  • Future Road Map

  • Learnings


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Out lays in Irrigation Sector in GoAP

  • Major Irrigation Prioritized Projects

  • Minor Irrigation Prioritized Projects

  • Targetted to complete by 2008


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Type of contracts

  • Engineering : Procurement: Construction (EPC)

    • Expeditious delivery

    • Single agency approach

    • Offshore Construction Majors

    • Competition brings best of Engineering

    • Contractor responsible for delivery

    • Improved quality

    • Mile stone based payments

  • Turn key contracts

  • 180 EPC contracts of value Rs 20,000 Cr finalised through eProcurement

  • Two cover system


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eProcurement outcome in Irrigation Dept

  • Irrigation Dept selected for Pilot in 2003

  • eProcurement mode - A grand success

  • 100% eProcurement above Rs 10 Lakhs threshold

  • Contributed to 80% value and 20% to Numbers

  • Major advantage – Remote submission of Bids

  • Provided a level playing platform; Equal Opportunity

  • Created favorable environment for new suppliers

  • Bidder participation increased ( 4.75 to 6.5)

  • Yielded Significant Cost Savings to Department(

  • Tender cycle time reduced (from 120 to 36 days)

  • Transparency protects the interest of Bidders


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Stakeholders Reaction

  • Satisfied Stakeholders, but high expectations from the System

  • Present system: Automated processes but linkages to databases is yet to happen

  • Technical Evaluation: Veracity of support documents is still manual

  • Grey areas: Subjectivity in evaluation persists

  • Dept could still tailor Bid conditions to help a favored supplier

  • Discretion exists in evaluation

  • Suppliers & Depts percieve eProcurement to be a Magic wand

  • To resolve all ills of the Govt Procurement system

  • System shall decide the successful bidder instantly

  • Prime demand: Auto Bid Evaluation


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Too many evaluation Parameters

  • Technical Evaluation in works contracts is on multiple parameters

    • Valid Registration as Contractor with State Govt

    • Payment of Security Deposit

    • Similar work experience

    • Experience in execution of principal items

    • Key and critical equipment

    • Quality control equipment

    • Technical personnel to be employed

    • Annual turnover in previous years

    • Existing commitments on Hand

    • Bid capacity

    • Liquid assets

    • VAT registration

    • Income Tax returns

    • Litigation History

    • Criminal History

    • Any other criteria as indicated in Bid document


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Standardisation of Processes

  • Govt appointed a Sub- Committee in 2003, chaired by Secretary I&CAD (Proj)

    • Standard Bid Document

    • Standard Processes across work Depts

    • Business process Reengineering to improve eProcurement efficiency

  • Auto Bid evaluation


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Auto Bid evaluation- Road Map

Components

  • Contractors Registration

  • Contractors/ Suppliers Database of Key details

  • Contract Management System

  • Linkage with VAT database

  • Linkage with Income Tax database

  • Standard Bid document

  • ePayments

    Requirements

  • Reforms in procurement processes to remove subjectivity

  • Business Process Reengineering to objectivise evaluation

  • A Sub committee constituted by GoAP to propose reforms/ BPR


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BPR in Similar work experience

  • To be Responsive, a Contractor shall have ‘Similar work experience’ in previous years

  • Objective is to select a contractor with relevant experience

  • Definition unclear- gives scope for subjectivity

    • Case1: Disqualified for not having internal roads experience in a Building complex

    • Case 2: Disqualified for not having experience in C.D works in a Highway project

    • Case 3: Disqualified for not having experience in C.D works in a Canal Project

  • Similar work Criteria is redundant as Depts Prescribe one more criteria I.e., experience in execution of Prime items, which any way fulfils the objective.

Reform: Dispense off ‘similar work’ criteria and instead seek for experience in Civil Engg works.


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Documentation to prove credentials

  • Depts list out documents to be uploaded by bidder

  • Mismatch between the list in online form and bid document

  • Suppliers rely on the list in online form

  • Supplier is disqualified citing documentation requirement in the bid document

Reform: Depts to give a comprehensive list of documentation requirement in online bid submission form. A bid shall be qualified if all the documents are attached properly as per this list.


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Undertakings by bidders

  • Departments are prescribing undertakings from contractors on a Non-Judicial stamp paper

    • No Litigation History

    • No criminal record

    • Availability of equipment

    • Correctness of information given by contractor in the bid form

  • Contractors are facing disqualification if any of these are not uploaded at the time of online bid submission

  • The contractor has to repeat this for every tender

Reform:Online Undertakings, Supplier clicks ‘ I Accept’ button


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Modification of Eligibility criteria

  • The departments modify bid eligibility criteria after publication of tender notice on eProcurement platform.

  • In some instances it is done a few days before bid submission closing time, by which time a few bids could have been already submitted in the system.

  • This is a serious impediment to the transparency

  • Could be to tailor criteria to suit a favored supplier

Reform:Bid eligibility criteria shall be freezed by the departments prior to publication of tender notice and any modifications of eligibility criteria through corrigendum shall not be allowed


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Tasks Ahead

  • Backward Integration

    • Estimates

    • Standardisation & coding of Civil Engg Specs

    • UN Standard Products& Services Code(UNSPSC)

  • Forward integration

    • Contractor Data Base system

    • Contrator Registration system

    • Contrat Management system

    • ePayments

  • 100%Roll out to all Depts and World Bank projects


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Contractors Database Information system

  • I&CAD Dept issued Govt orders in May 2004.

  • Online Contractors Database Information system hosted in 2004

  • One time validated data would be available for auto bid evaluation

  • Ownership: Commissionerate of Tenders, GoAP

  • 800 Special Class/ Class I Contractors uploaded Data

    • Company details, experience details, Turn over

    • Manpower & equipment details

  • Data sent to Executing Authorities for validation

  • Validation reports are delayed making the system disfunctional

  • Now, Contractor is made accountable for the data genuineness

  • Data of All contractors will be in Public domain for objections

  • Penal action against Contractors uploading false data


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On line registration of Contractors

  • Registration of Contractors into various classes and categories by departments – Manual process

  • No consolidated list of registered contractors due to multiple registering authorities

  • Difficult to Prevent re-registration of a black listed contractor

  • On line registration system will eliminate all these draw backs

  • Unique number is possible with online system to identify a Contractor


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Contract Management & On line payments

  • Ineffective Contract Monitoring is resulting in cost & time overruns

  • Manual system is inefficient

    • Improper documentation

    • Tampering/ loss of records with passage of time

  • Arbitration cases are lost for want of documentation

  • Online Contract Management System improves the situation

    • Contract monitoring

    • Work bill generation

    • Scrutiny & passing of work bills

    • Online payments

    • Revised estimates

    • Completion reports

  • Good tool to meet RTI Act requirements

  • Ideal to tag on this module with eProcurement


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100% Roll out by March 2007

  • Present thresholds : Rs 10 L for Works,Rs 5L goods

  • Targeted major procurement depts

  • Future target : All Depts above Rs 1.00 L

  • Phenomenal increase in Dept users/ Suppliers

  • Constraints

    • Connectivity

    • Trainings ( 2 day module)

    • Non availability of Service centers in small towns

  • Solution

    • Establish More Citizen Service Centers

    • Train RAJiv Kiosk operators ( Good commercial value)

    • AP Broadband Network with 2MB connectivity up to village


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Learnings

  • Reforms/ BPR in Procurement processes and eProcurement to Synchronise to derive full potential of eProcurement

  • Statewide eProcurement portal beneficial

  • Stakeholders are demanding for complete automation

  • State Govts can either adopt Incremental approach or Monolithic approach for ‘End to End’ eProcurement depending on the maturity level of procurement processes

  • Desirable to Develop a Monolithic platform with all modules, but implement incrementally


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Question & Answers

THANK YOU

For more details

Visit

www.eprocurement.gov.in


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