When a UPS costs more than PC

AGP recommends investigation to determine extent of mis-procurement by Pakistan Post

ISLAMABAD:

The audit books catch frauds committed in different ways that fall in the category of irregularities. Some of the tales are frightening while others leave one in fits. One such tale emerged in the audit book of the Pakistan Post Office where a Uninterruptible Power Supply (UPS) unit worth Rs168,900 was purchased for a personal computer worth roughly Rs50,000.

To add insult to injury, the Pakistan Post Office purchased a total of 113 (3KVA) UPS units, prompting the country’s top auditor to state that the procurement of the items led to discrepancies of Rs19.089 million in the Pakistan Post Office Department (PPOD) audit for its first year under the Pakistan Tehreek-e-Insaf (PTI)government. In its audit report for 2019-20 – submitted to the president under Article 171 of the Constitution for presenting it before parliament – the auditor general of Pakistan (AGP) has given observations about total Rs12,331.127 million, which also include recoveries of Rs681.6 million and purchase of UPS, among other things.

The Post Office is under the administrative control of the communications ministry, currently headed by Murad Saeed as Minister for Communications and Postal Services. The firebrand minister is famous for lashing out at the opposition in and outside parliament.

According to the AGP, rules provide that specification shall allow the widest possible competition and shall not favour any single contractor or supplier nor put others at any disadvantage. The AGP report says that the specifications shall be generic and shall not include reference to brand names, model, numbers, catalogue numbers or similar classification.

The latest AGP report noted that the PPOD director general floated an open tender for purchase of UPS on March 1, 2019 in which six firms participated; after technical evaluation Qavi International was declared as the lowest responsive bidder. “An amount of Rs19,085,700 was paid to M/s Qavi International against purchase of 113 (3KV-UPS) @ Rs186,900 per unit.”

Revealing the discrepancies, the AGP stated that the supplier did not supply the product as required under the specifications and upon simple demonstration, it was revealed that the power function of the UPS was less than the required specification of 1600-Watt.

“The UPS was attached with a single PC, which was quite unfair as the cost of the UPS was Rs168,900 whereas the cost of single PC was Rs50,000 approx,” the report read. In addition, the report added, the general specification of the bidding document “transfer time one millisecond typical” was not realistic and the management did not document the type of test, which was adopted to measure the transfer time of the UPS.

Also, it noted, demonstration for technical evaluation of the UPS was not carried out in the presence of bidders and the results of technical evaluation of each test adopted by the evaluation committee was notpublished or communicated to all vendors.

The auditor said that the discrepancies were pointed out to the head of department and management during September and December 2019, adding that the officials replied that the specifications of the UPS were generic; the company selected was the authorised dealer of M/s Pioneer Systems, which was sole distributor of the Deutsche Power Company.

“The reply was not acceptable as the specification was not generic,” the AGP stated. “Import documents as repeatedly requested were not provided to Audit.” Subsequently, the AGP has recommended that “the matter may be investigated by thecontrolling ministry to determine the extent of mis-procurement.”