E-procurement system on cards to keep tabs on contractors

  • Builders have to update the government on the projects they have bagged and the progress made, officials say

Mar 15, 2019-

Contractors will soon have to regularly share updates on the contracts they have in hand as part of the government’s bid to discourage those who are already  overwhelmed with work.

The Public Procurement Monitoring Office says it is introducing e-procurement system where contractors will have to update the government on the number of projects they are working on and the progress made, which will help the authorities examine the contractors’ capacity.

“We’ll start with a mechanism that will examine the contractors’ bid capacity. We are holding discussions on the formula for determining the bid capacity,” said Sunil Kumar Karna, joint-secretary at the Public Procurement Monitoring Office.

Currently, there is no system in place that checks the works of the contractors because the government entities don’t have the database of contractors that are handling a number of projects.

Government officials said contractors—at the time of participating in the bidding—do not mention about the contracts they are sitting on already. This usually plays to the benefit of big contractors who show large financial resources while bidding.

The procurement monitoring office said it is adopting the new measure as per the recommendation of the Commission for Investigation of Abuse of Authority.

The anti-graft body on September 20 last year issued a guideline called “Action Plan for Reforming the Public Procurement and Development Programmes -2018” for the government entities suggesting that the agencies must look into the capacity of the bidders—and the number of projects they are already working on—during technical evaluation.

“Those who don’t have the capacity to handle additional works because of their existing workload should be disqualified during technical evaluation,” said Karna.

The infamous Pappu Construction, founded by suspended lawmaker Hari Narayan Rauniar, had almost bagged the contract for constructing the Nepal Rastra Bank building at Baluwatar although several projects worth billion of rupees handled by the company were in dire straits.

Despite the poor track record on completion of the projects, it had passed the technical evaluation—and had stood first even in the financial evaluation—but it was denied the contract after the procurement monitoring office stepped in and blacklisted the company.

Government officials say they don’t have the actual data on how many contracts a contractor has grabbed and that they are forced to choose the bidders without examining their bid capacity. With an aim to examine the bid capacity of contractors, the Department of Roads, which awards a large number of contracts, said it has developed a software where the projects and the work progress of contractors are updated.

“Once all the details are updated, we will have detailed information about each contractor’s work in the road sector,” Rabindra Nath Shrestha, director general at the Road Department, told the Post.

According to the anti-graft agency, big contractors, already sitting on a large number of projects, are still bagging more contracts due to the government entities’ failure to examine their bid capacity.

Due to the “undeclared syndicate” of some big contractors, various projects are not completed on time, the watchdog says.

According to a study of the anti-graft commission titled “Study and Analysis on the Status of Contract Management in the Projects run by the Government Entities,” released on January 28, a total of 1,848 projects with a contract value of Rs118 billion were incomplete and were past their deadlines.

The study report also recommended setting down conditions whereby contracts are awarded only after vetting the contractors in terms of their financial capacity and human and technical resources.

The Federation of Contractors’ Association of Nepal has also demanded that the growing trend of contractors grabbing multiple contracts and not completing the works on time must end.

After the 20th annual general meeting of the association in November last year, the contractors in their declaration had formally sought an end to the practice.

This practice, according to the association, hurts small contractors because big contractors continue to get additional contracts. There are more than 12,500 contractors in the country.

In line with the anti-graft agency’s recommendations, the procurement monitoring office is also preparing to introduce standard bidding documents regarding the modalities—Engineering, Procurement and Construction (EPC) or Design, Build and Operate (DBO)—of contracts. Although contracts are being awarded based on the EPC and DBO in a small number, it is being done on ad-hoc basis due to the lack of standard bidding document, according to the procurement monitoring office.

“So we are preparing the document,” said Karna.

Currently, the Pokhara International Airport is being constructed under the EPC modality. The government had awarded the contract to a Chinese company—China CAMC Engineering Co Ltd—to develop the project under the EPC model.

“There are some road projects being built under the DBO model as well,” said Karna.

Published: 15-03-2019 11:49

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