Procurement Reforms in Go. AP by Sathish Chandra, IAS, Secretary, I&CAD (Projects) Irrigation & Command Area Development Dept Government of Andhra Pradesh
Agenda l l l l Irrigation Sector outlays in Go. AP About EPC Contracts e. Procurement outcome Auto Bid Evaluation Reforms/ BPR in Procurement Future Road Map Learnings
Out lays in Irrigation Sector in Go. AP l Major Irrigation Prioritized Projects Number of Projects 30 l Irrigation potential (Acres) New US$ 12, 305 Million [INR 55, 374 Cr. ] 6, 797, 136 Stabilization Power Generation (MW) 2, 132, 459 Number of districts benefited 1, 410 17 Minor Irrigation Prioritized Projects Number of Projects 17 l Estimated Cost USD 394 Million [INR 1, 774 Cr. ] Irrigation potential (Acres) 258, 561 Targetted to complete by 2008 Number of districts benefited 7
Type of contracts l l Engineering : Procurement: Construction (EPC) l Expeditious delivery l Single agency approach l Offshore Construction Majors l Competition brings best of Engineering l Contractor responsible for delivery l Improved quality l Mile stone based payments Turn key contracts 180 EPC contracts of value Rs 20, 000 Cr finalised through e. Procurement Two cover system
e. Procurement outcome in Irrigation Dept l l l Irrigation Dept selected for Pilot in 2003 e. Procurement mode - A grand success 100% e. Procurement 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
Stakeholders Reaction l l l l l 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 e. Procurement 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
Too many evaluation Parameters l Technical Evaluation in works contracts is on multiple parameters l l l l 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
Standardisation of Processes l l Govt appointed a Sub- Committee in 2003, chaired by Secretary I&CAD (Proj) l Standard Bid Document l Standard Processes across work Depts l Business process Reengineering to improve e. Procurement efficiency Auto Bid evaluation
Auto Bid evaluation- Road Map l l l l l Components Contractors Registration Contractors/ Suppliers Database of Key details Contract Management System Linkage with VAT database Linkage with Income Tax database Standard Bid document e. Payments Requirements Reforms in procurement processes to remove subjectivity Business Process Reengineering to objectivise evaluation A Sub committee constituted by Go. AP to propose reforms/ BPR
BPR in Similar work experience l l 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 l Case 1: Disqualified for not having internal roads experience in a Building complex l Case 2: Disqualified for not having experience in C. D works in a Highway project l 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.
Documentation to prove credentials l l 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.
Undertakings by bidders l l l Departments are prescribing undertakings from contractors on a Non-Judicial stamp paper l No Litigation History l No criminal record l Availability of equipment l 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
Modification of Eligibility criteria l l The departments modify bid eligibility criteria after publication of tender notice on e. Procurement 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
Tasks Ahead l l l Backward Integration l Estimates l Standardisation & coding of Civil Engg Specs l UN Standard Products& Services Code(UNSPSC) Forward integration l Contractor Data Base system l Contrator Registration system l Contrat Management system l e. Payments 100%Roll out to all Depts and World Bank projects
Contractors Database Information system l l l 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, Go. AP 800 Special Class/ Class I Contractors uploaded Data l l l l 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
On line registration of Contractors l l l 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
Contract Management & On line payments l l Ineffective Contract Monitoring is resulting in cost & time overruns Manual system is inefficient l l Arbitration cases are lost for want of documentation Online Contract Management System improves the situation l l l l Improper documentation Tampering/ loss of records with passage of time 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 e. Procurement
100% Roll out by March 2007 l l l Present thresholds : Rs 10 L for Works, Rs 5 L goods Targeted major procurement depts Future target : All Depts above Rs 1. 00 L Phenomenal increase in Dept users/ Suppliers Constraints l l Connectivity Trainings ( 2 day module) Non availability of Service centers in small towns Solution l l l Establish More Citizen Service Centers Train RAJiv Kiosk operators ( Good commercial value) AP Broadband Network with 2 MB connectivity up to village
Learnings l l l Reforms/ BPR in Procurement processes and e. Procurement to Synchronise to derive full potential of e. Procurement Statewide e. Procurement portal beneficial Stakeholders are demanding for complete automation State Govts can either adopt Incremental approach or Monolithic approach for ‘End to End’ e. Procurement depending on the maturity level of procurement processes Desirable to Develop a Monolithic platform with all modules, but implement incrementally
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