The Public Procurement Regulatory Authority (PPRA) on Monday restrained the government from entering into a roughly Rs25 billion worth of deal for installing an electronic monitoring system to check tax evasion after it received a complaint about alleged favouritism in the process.
PPRA - the government agency responsible to ensure fair play and save nation’s money in government contracts - has also sought a report from the Federal Board of Revenue (FBR) about these allegations, showed an official correspondence.
“FBR is directed to suspend procurement proceedings till resolution of the complaint at the Authority’s level,” said the orders issued to FBR Chairman Javed Ghani on Monday.
PPRA invoked the Public Procurement Regulatory Authority Ordinance of 2002 to ensure fair play.
PPRA sprang into action two days after Prime Minister Imran Khan “commend(ed) the FBR head office team for developing the IT-enabled transformation plan and procuring cutting-edge track and trace system.”
PPRA instructions give credence to claims that the FBR did not properly brief the prime minister about the bidding process, which led to a tweet by the premier at the weekend.
Reliance IT Solutions - one of the bidders - had lodged a complaint with the PPRA about alleged irregularities in the deal.
PPRA has intimated the FBR that the issue of award of licence for electronic monitoring of tobacco products, sugar, fertiliser and cement was “under examination” of the authority. It also directed the FBR to submit a comprehensive report containing response to all the allegations.
The authority has directed the FBR to submit documentary evidence including the copy of bidding documents, complete evaluation report and decision of the grievance redressal committee in seven days.
Finance Secretary Kamran Ali Afzal is the PPRA Board Chairman and the authority’s operational matters are seen by its Managing Director Rizwan Malik.
It is the second time that the PPRA took up the issue of procurement of track and trace system. Earlier in November 2018, the authority had directed the FBR to cancel the procurement process due to alleged wrongdoing in the deal.
The government has twice attempted to curb tax evasion in tobacco, cement, fertiliser and sugar sectors. In its latest attempt, it opened bids on February 1 that showed AJCL Private Limited as the leading contender.
AJCL appeared the most advantageous bidder on the back of highest technical score, as its financial bid was 52% expensive than the lowest bid.
The price difference between the lowest financial bid of Rs499 per thousand stamps and the second highest bid offered by the consortium of AJCL Private Limited was Rs259 per thousand stamps. This translates into an additional payment of Rs8.5 billion to the bidder over the five-year contract period.
The five-year contract can be extended by another three years, taking total additional financial impact to Rs13.5 billion.
The price that the top-scoring bidder quoted brings the contract value at roughly Rs25 billion over a period of five years and Rs39 billion for an eight-year period.
At least three parties have challenged the bidding process before the grievance redressal committee, which is currently in the process of hearing the parties.
The dispute resolution committee is set to take up the complaint of another bidder on Tuesday.
Reliance IT Solutions has said that the evaluation report of the licensing committee that was uploaded on the PPRA website intentionally concealed the financial cost of each bidder.
Reliance claimed that there was a vast gap between the financial proposal of AJCL and the lowest financial bidder.
Reliance alleged that on July 26, 2020 the FBR placed an advertisement in the national dailies for hiring a consultancy services firm to prepare the IFL. However, the World Bank refused to fund and support services of the said consultancy firm as the tendering process of the FBR did not meet the World Bank’s standard terms of reference for such tenders.
As a result, in October 2020, the FBR cancelled the process of hiring the consultancy firm through a corrigendum issued in the national dailies.
Following the issuance of the corrigendum, a hand-picked consultant named “Hany Albert Ras” from IDECO Biometrics was hired for the purpose, according to Reliance.
Published in The Express Tribune, February 23rd, 2021.