BLIND SPOTS IN

POCUREMENT

& CONTRACT

MANAGEMENT

Subhash Singhal

Chief General Manager (C&P)

GAIL (India) Limited

Email: ssinghal@gail.co.in

1.

PUBLIC

PROCUREMENT

Process by which public authorities, such as Government

Ministry, department & CPSEs, procure work, goods or

services.

Procedures and guidelines have been framed to uphold

the values of competition, transparency, fair play,

integrity and value for money while undertaking

procurement

Aims to achieve right balance between costs and

requirements concerning 5 R (s) of procurement

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ABOUT

5 R (s) OF PUBLIC PROCUREMENT

Right

quality

4

Right

quantity

Right

price

Right

time and

place

Right

source

BENEFITS OF PUBLIC PROCUREMENT

Fairness and

Transparency

Equal opportunity Wider Participation

Adequate

Competition

Highest standards

of ethics

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~INR 40,00,000 Crores Size of Public Procurement

~30% As a percentage of GDP

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General Finance Rules, 2017

Guidelines of Central

Vigilance Commission

Procedure/ Manuals issued by

Department of Expenditure

Circulars from Ministry &

Notifications (such as PPP-

2012, DieTY, PP-LC etc.)

POLICIES GUIDING PUBLIC PROCUREMENT

Company’s own procedure

Delegation of Power

Company Guidlines

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During Procurement Less circulation / publication of tenders

Lesser Bid validity

Craterisation by bidders

Error in bids

Price revision

Complaints against bidders

Stipulations in bid contrary to tender

requirements

Less transparency in off line

negotiations

Way-forward: use of ICT in procurement

In Contract Management Financial Hardships of contractor

Resignation by key personnel

Contractual disputes

Local issues like law & order situation

Competency of Engineer-in-Charge

(EIC)

Different interpretations of contractual

provisions

Non resolving issues.

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BLIND SPOTS IN POCUREMENT & CONTRACT ANAGEMENT

Some Blind Spots Can be

2.

USE OF ICT

Uploading of Tenders on GAIL’s and Govt. Website

E-Tendering

Reverse Auction

Bill Watch System

ERP to cover entire procurement cycle

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Use of ICT in Public Procurement

In GAIL, all the tenders are uploaded on GAIL’s tender website (http://www.gailtenders.in) and

Govt. website (http://eprocure.gov.in)

It ensures wider circulation and participation by

eligible bidders.

Any bidder who meets the Bid Evaluation Criteria

(BEC) can download the tender and can participate

in the bidding process.

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Up loading of tender on websites

“E-Tendering" is a process on a secure platform for sending and

receiving tenders by electronic means, rather than the old Hard set

based method and replicates the process of inserting the documents

into an envelope securely via the Internet.

This process increases automation in procurement system, leads to

reduction in paper work and documentation, and enhances

transparency as well as efficiency in the procurement process.

E-tendering was implemented in year 2007. Initially, E-Tendering

was made mandatory for tenders having an estimated value of more

than INR 50 lakhs. The threshold value of E-Tendering has been

further lowered to INR 15 Lakhs

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E-Tendering

Reverse Auction is a procurement tool to obtain competitive

price through multi bidding online negotiation among short-

listed bidders.

Through this process, the short-listed bidders get an opportunity

to reduce their prices online in a transparent and fair manner

based on the evaluation methodology stipulated in Tender

Document without the identity of the bidder(s) being disclosed

to other bidders or to officials of GAIL and/or its Consultants

(as the case may be).

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Reverse Auction

The entire process is designed to bring a complete transparency in

the process as under:

Less time is spent in arriving at final prices.

Minimizes human involvement.

System offers greater insights into the current market pricing.

Gives equal opportunity to all short listed suppliers to be most

competitive.

To help bidders to know their price / position dynamically vis-à-vis the

other suppliers and provide them an opportunity to react to it.

The Reverse Auction has been implemented since 2009 and various

Reverse Auctions have been conducted successfully.

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Reverse Auction

Bill Watch System is GAIL’s another step

towards automation and commitment towards its

Suppliers and Contractors.

BWS helps in tracking Suppliers and Contractors

bills and ensuring timely payment to them.

Suppliers and Contractors can also keep watch on

their bills.

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Bill Watch System

SAP was implemented in GAIL in 2005. SAP allows

all transactions on one platform and facilitate easy

monitoring.

It improves communication and creates a work force

that is easier to transfer between roles.

Now all the ordering and their execution are SAP

controlled and are regularly closed after execution in

system.

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ERP-SAP

3.

Other Initiatives

In order to eliminate the gaps in understanding on the common

lapses in tender process and contract execution, vendor coaching

programs are held

BENEFITS:-

The bidders shall be conversant with the bidding process of GAIL

Rejections due to non-intentional/ avoidable mistakes shall come

down

The bidders shall be aware of the important provisions of the tender

documents.

The process shall bring in transparency and increase stake-holder

engagement. 18

VENDOR COACHING PROGRAM

Pre-Tender meeting gives better understanding of technical

and financial qualification criteria, specifications / scope of

work and other terms and conditions of tender, feedback

from prospective bidders on the same, fair assessment of

bidders’ credentials, avoid technical and commercial queries

during the tender process and reduces lead time for ordering.

In GAIL, Pre-tender meeting are being conducted in most of

tender especially for first time/ complex /high value

requirements.

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PRE-TENDER MEETING

The responsibility for execution of Works / Services contracts

lies with Engineer-in-charges (EIC) nominated by site/ Project in

charge based on the contract value .

Successful execution of contract depend on competency of EIC.

To make Engineer-in-Charges (EICs) aware on various aspects

of contracts and its management so as to make them better

equipped to deal with different situations that may arise during

the execution of the contracts, EIC coaching program are

organized in GAIL.

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EIC COACHING

Similar to Health monitoring of plants/installations, a system of health

monitoring of contracts at fixed intervals and quarterly closure of

contracts were implemented in GAIL to ensure that the contracts are

managed and executed with quality, within the timelines, without any

cost over-run and with the satisfaction of all the stakeholders.

BENEFITS

Timely settlements of claims for extra/additional works, deviations,

amendments & issues/deviations etc.

Prompt resolution in case of disputes

Disputes/Issues do not pile up for resolution at closure

Good Stakeholder Management

Good Brand Image

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HEALTH MONITORING AND QUARTERLY CLOSURE OF

CONTRACTS

During execution of contracts at number of occasions, contractual

disputes arise between Vendors / Contractors and GAIL due to

lack of clarity in contracts, different interpretations etc.

These contractual disputes, if not settled amicably during currency

of contracts, will turn into much larger arbitrations & legal

disputes later on.

Therefore, Preventive Dispute Resolution Mechanism was

introduced in GAIL so that the disputes resulting into arbitrations /

court cases can be minimized.

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PRE-DISPUTE RESOLUTION MECHANISM

Bid Evaluation Criteria for various packages has been standardized

to have uniformity and expeditious finalisation of tenders.

Model ITB for various type of tenders has been finalised which

bring uniformity in the bidding documents all across GAIL.

A platform has been provided to interact with Policy Cell at

Corporate Office on procedural issues which brings consistency

across the organization.

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STANDARDISATION

THANKS!

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