NDMA actions: Irregular tent purchase caused Rs0.5 billion loss, says audit report

Some 48,500 tents were bought against an immediate requirement of 16,000, says AGP report

ISLAMABAD: The National Disaster Management Authority (NDMA) induced a loss of half a billion rupees to the national exchequer over irregular procurement of tents without an open competition, says the audit report issued by Auditor General of Pakistan (AGP).

According to details, the prime minister during his visit to Karachi in September 2012 directed the disaster management body to provide 25,000 tents to flood victims. The NDMA chairman had directed that the authority should avoid any price escalation since the previous procurement early this year.

The auditors have observed that the “management of NDMA selected two firms out of four shortlisted venders on the basis of past performance without open competition and issued the supply order.”

The prime minister’s directives were received [by NDMA] on September 29, 2012, whereas the supply orders were issued on December 13, 2012, indicating that the procurement was not made in times of emergency, they said.



“NDMA purchased 48,500 tents against an immediate requirement of 16,000 tents (Sindh: 11,000 and Balochistan: 5,000). Out of the total purchases, 29,010 tents were issued to different places while the remaining 19,490 were stored in stock along with the previous available stock of 9,499 tent,” the AGP report has pointed out.

The NDMA procured 48,500 tents for Rs499.55 million during 2012-13. According to the details 28,500 tents were purchased from Ajmeri Textiles, Hattar, while 20, 000 were purchased from Pear Associates at the rate of Rs10,300 per tent.

Rule 12(2) of Public Procurement Rules, 2004 states that all procurement opportunities over Rs2 million should be advertised on the authority’s website, as well as in newspapers having wide circulation. The advertisement in the newspapers shall principally appear in at least two national dailies, one in English and the other in Urdu.

The office of the AGP is of the view that procurement of tents without open competition deprived the government of the benefit of competitive rates and undue favour was extended to suppliers.

In response to the observations of the auditors, the NDMA management responded by saying that the lowest prices of the last procurement were taken as benchmark for the purchases. The lowest price quoted during the last normal procurement in April 2012 was Rs10, 300 per unit and was taken as the benchmark for the emergency procurements, it added.

“The replies are not accepted because open competition was not held. Further, the rate of Rs10,300 quoted in the procurement of April, 2012, under the Asian Development Bank grant was also irregular as management negotiated the price with other bidders during the opening of tenders by obtaining their signatures against their bids for the amount quoted by the lowest bidder, ie, Rs10,300 in violation of Rule 40 of Public Procurement Rule, 2004.”

The Departmental Accounts Committee meeting, which was scheduled to be held on November 25, 2013, was postponed as the NDMA chairman had to monitor relief operations at the earthquake ravaged areas in Sindh and Balochistan.

Published in The Express Tribune, November 9^th, 2014.