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Tender for Pakistan Post software system awarded ‘at high cost’
By zafar bhutta
Oct.23,2019
It will cost Rs130m per year compared to earlier contract given at Rs70m
ISLAMABAD: Though the Pakistan Tehreek-e-Insaf (PTI) government has embarked on a cost-cutting drive, Pakistan Post – a state-owned postal service provider – has caused a loss of millions of rupees to the national exchequer by awarding contract for running the Centralised Software System at almost double the actual cost to a single bidder.
Earlier, a different company had run a similar project at a cost of Rs70 million per annum for seven years till 2018. Interestingly, the company was knocked out in the technical bid evaluation process.
Now, Pakistan Post has awarded the contract to a single bidder at a high cost of Rs130 million per annum for two years – 2019 and 2020.
Several attempts were made to seek comment of Pakistan Post on the matter. Queries were sent to Director IT Farrukh Basheer and Director Finance Services Muhammad Zaheer for their reply. However, they did not give any response.
Documents and reliable sources revealed that Pakistan Post had awarded a major IT project after receiving only one financial bid in an alleged attempt to favour a single bidder.
It rejected offers of several other IT firms, including that of the old service provider that had run the IT project for seven years. This will result in a loss of Rs100-120 million to the national exchequer over two years.
The single bidder was chosen despite several complaints from other bidders who offered to provide similar services at a much lower cost if they were provided a level playing field.
Moreover, the established IT players with decades of experience in running IT projects complained that the contract was awarded to a new and unknown entrant called AIMS without proper comparison of experience.
The financial bid of the qualified bidder included Rs3,327,201 per month for project maintenance and support centre and Rs1,001,741 per month for hosting server machines. However, both are excessively superfluous expenses, amounting to Rs52 million per year.
IT experts, who were familiar with the IT services provided by Pakistan Post, told The Express Tribune that the competitive bid, while keeping in view the industry standards in terms of profit, should not exceed Rs80 million in any case and it was higher by Rs50 million per year.
Other bidders have termed it a travesty of fair competition. According to sources, there was seemingly a deliberate attempt to reject the rest of the technical bids on flimsy grounds to avoid price comparison and allow the remaining one technically qualified bidder to demand the amount as it liked.
It was also in violation of the rules and regulations of Public Procurement Regulatory Authority (PPRA) and Competition Commission of Pakistan.
They were of the view that if the tender was floated again and was fairly evaluated, a maximum cost of close to Rs80 million would have to be borne, thereby saving the national exchequer close to Rs100 million over the two-year validity period of the contract.
These bidders pointed out that in spite of the complaints against the award of the contract, no inquiry or action had been initiated so far.
Published in The Express Tribune, October 23rd, 2019.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
By zafar bhutta
Oct.23,2019
It will cost Rs130m per year compared to earlier contract given at Rs70m
ISLAMABAD: Though the Pakistan Tehreek-e-Insaf (PTI) government has embarked on a cost-cutting drive, Pakistan Post – a state-owned postal service provider – has caused a loss of millions of rupees to the national exchequer by awarding contract for running the Centralised Software System at almost double the actual cost to a single bidder.
Earlier, a different company had run a similar project at a cost of Rs70 million per annum for seven years till 2018. Interestingly, the company was knocked out in the technical bid evaluation process.
Now, Pakistan Post has awarded the contract to a single bidder at a high cost of Rs130 million per annum for two years – 2019 and 2020.
Several attempts were made to seek comment of Pakistan Post on the matter. Queries were sent to Director IT Farrukh Basheer and Director Finance Services Muhammad Zaheer for their reply. However, they did not give any response.
Documents and reliable sources revealed that Pakistan Post had awarded a major IT project after receiving only one financial bid in an alleged attempt to favour a single bidder.
It rejected offers of several other IT firms, including that of the old service provider that had run the IT project for seven years. This will result in a loss of Rs100-120 million to the national exchequer over two years.
The single bidder was chosen despite several complaints from other bidders who offered to provide similar services at a much lower cost if they were provided a level playing field.
Moreover, the established IT players with decades of experience in running IT projects complained that the contract was awarded to a new and unknown entrant called AIMS without proper comparison of experience.
The financial bid of the qualified bidder included Rs3,327,201 per month for project maintenance and support centre and Rs1,001,741 per month for hosting server machines. However, both are excessively superfluous expenses, amounting to Rs52 million per year.
IT experts, who were familiar with the IT services provided by Pakistan Post, told The Express Tribune that the competitive bid, while keeping in view the industry standards in terms of profit, should not exceed Rs80 million in any case and it was higher by Rs50 million per year.
Other bidders have termed it a travesty of fair competition. According to sources, there was seemingly a deliberate attempt to reject the rest of the technical bids on flimsy grounds to avoid price comparison and allow the remaining one technically qualified bidder to demand the amount as it liked.
It was also in violation of the rules and regulations of Public Procurement Regulatory Authority (PPRA) and Competition Commission of Pakistan.
They were of the view that if the tender was floated again and was fairly evaluated, a maximum cost of close to Rs80 million would have to be borne, thereby saving the national exchequer close to Rs100 million over the two-year validity period of the contract.
These bidders pointed out that in spite of the complaints against the award of the contract, no inquiry or action had been initiated so far.
Published in The Express Tribune, October 23rd, 2019.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
