Mumbai: Another e-tendering scam in the making at BMC?

Even as the tremors of the recent Rs 100-crore scam are yet to subside, internal civic reports accessed by mid-day show the system is still flawed and vulnerable to manipulation

The BMC, which is still in the throes of the R100-crore e-tendering scam, may be sitting on another ticking time bomb. RTI applications filed by mid-day have revealed that the e-tendering system, which the BMC claims will handle applications and awarding of all civic contracts by 2016, is riddled with flaws which could provide the perfect recipe for another scam.

The internal reports obtained by mid-day show how the civic e-tendering system is unable to handle bigger contracts, cannot accept the crucial financial component of bids, does not take into account cost escalations, details of sales and VAT and even currency adjustments if the tender is awarded to a global firm.

In the last few months alone, the civic body was forced to invite the tenders for three major projects manually after bids from interested parties were turned down on the e-tendering system. These include the Rs 632-crore sewerage treatment plant at Ghatkopar; and the plants at Colaba and Bhandup.

This not only delayed the tendering process for these crucial projects and, thus, the projects themselves but also exposed major flaws in the e-tendering system.

Incapable
A recent report prepared by a BMC-appointed consultant underlines six to seven inherent flaws in the civic e-tendering system, calling it ‘inflexible’ and ‘incapable’ of handling crucial major projects, especially those awarded on a Design-Build-Operate-Maintain (DBOM) basis.

Subsequent reports by several departments point out that the e-tendering system does not allow financial bids to be uploaded, cannot record future cost escalations, does not admit details of cost escalations, operational cost, provisional sums, tax details (sales/VAT) and currency adjustments.

“The system is incapable of, and inflexible in, handling bids for major and complex contracts. The BMC must undertake urgent structural changes to allow for better bidding in the future,” reads a report (CHE/381/ MSDP/ May, 2014), which was prepared following the failure of three bids on the civic online system.

In the following months, several meetings were held between the civic IT department, the service provider and consultants to sort out the issues and ensure that the e-tendering system works properly. But to no avail. “Despite the e-tender planning for the projects being done months in advance, manual submissions were allowed in violation of the MCGM’s e-tendering policy,” reads a report.

Rate analysis

>> According to civic policy, tenders are invited through e-tendering for civil, electrical, mechanical works and purchase and supply of plant and machinery equipment. Once received, the tenders are scrutinised by respective departments to adjudicate responsiveness. But several e-tendering conditions were not followed over the years. One such condition was: charging rebate and rate analysis when bid went 12% to 15% over the estimated cost. It was observed that rate analysis was illegally allowed to be submitted after opening of the ‘C’ packet (containing financial portions of a bid).

>> “It was observed that in some cases rate analysis was allowed to be submitted after opening of financial bid, which should have been the other way round, as per the rules. In some other cases, submission of demand drafts was done manually, leading to bidders bullying each other for submission,” reads an internal municipal report.

>> In several other projects over the last one year, even as the request for proposal (RFP) for a tender was ready, the user ID for e-tendering was not issued despite several reminders to the civic IT cell, leading to delays in several works.

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