Lab deal exposes loopholes in e-tender process

Bengaluru: HLL Lifecare Ltd's claim that it was elbowed out of the tender process to establish a lab at PMSSY Hospital shows how lack of clear guidelines for procurement when only one bidder remains is undermining transparency of government deals.

HLL Lifecare Ltd, a Mini Ratna PSU, had uploaded all the documents on the Karnataka government's eportal to participate in the tender and made the EMD payment too. But the EMD payment did not get reflected in the eportal, leaving HLL out of the tender. As a result, the only other bidder, Matrix Imaging Solutions India Private Limited, won the tender.

After TOI reported that Matrix was jointly owned by Chief Minister Siddaramaiah's son, questions have been raised about probity in the tender. While Dr Yathindra Siddaramaiah has announced he will severe his ties with Matrix, HLL has said it believe it was deliberately kept out.

Experts say that to weed out confusion and ensure transparency, the authority concerned should go for re-tendering when tenders end up with a single bidder. But there have been examples of single bidders walking away with the contracts in the past.

The experts say the only way a private firm, which feels it has been cheated in a tender, can now fight back is through a legal recourse. They demand that the government come up with clear-cut guidelines in this regard.

Social activist Sai Dutta pointed out that in the PMSSY lab case, the hospital authorities allegedly ignored repeated pleas of HLL for extension of time to submit the tender after facing a technical glitch. "However, the hospital authorities went ahead with the tender and claimed that the lone bidder qualified all the necessary criteria. It may be true or not. But the fact remains that the tender didn't create a level playing field though another qualified bidder was in the fray. This is due to a lack of clear cut protocol under the Karnataka Transparency in Public Procurements Act to deal with single-bidder situations. It is left to the tendering authority to interpret," he said.

"Ideally, the authority should go for a fresh tender if only one bidder ends up in the first call. Even in the second call, if only one bidder sails through, then the authority can have discussions with the bidder and award the contract after ensuring that his or her firm satisfy the needs of the tender," he added.

Urban expert V Ravichandar said the government should set out clear cut rules to guide procurement for single bidders for e-tenders. "And the single bid needs to be within the budgeted elements and protect public interest," he said.

In messages to TOI, Dr Rajesh Gowda, joint owner of Matrix, said, "There is no law forbidding accepting a single tender. In our case there were two bidders and one disqualified because of not uploading EMD. Even in the Karnataka Transparency Act on tender purchase, it is nowhere mentioned that single bid should not be accepted."

Tech glitch an escape route?

In October 2014, the Karnataka Renewable Energy Development Limited's e-tender (KREDL) to award solar projects worth Rs 2,100 crore had created a controversy, when the tender was closed in less than 40 seconds. Online applications were invited from agricultural land owners to set up 1 MW to 3 MW solar projects and there were doubts raised about how rural folks, with little facility on internet, could have come forward in such a fast pace to get the deal. The forum was open to 300 to 600 applicants. However, KREDL officials and energy minister DK Shivakumar had maintained that the tender process was transparent.

Even the e-procurement procedure of PMSSY, the HLL Lifecare alleged that the technical glitch stopped them from filing the deposit and the e-tender portal or the authorities didn't respond to their woes properly.

Source: TOI

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