Corporate Governance Issues in e-Governance Procurement
Asoke K. Laha
President & MD
Interra IT
Transparency in procurement of Information Technology services and products at government departments has been a matter of rising concern with not only the government but all citizen forums and stakeholders, including the ICT players in India today. There have been a lot of government agencies that monitor procurement processes like Central Vigilance Commission (CVC), Comptroller and Auditor General, and rules have been framed so that the public procurement process is not taken for a ride.
Even after so many watchdogs and rules and regulations from government bodies like Comptroller and Auditor General, Central Vigilance Commission and procurement manual of the Director General of Supplies and Disposals, rampant corruption is still going on like putting specific clauses beneficial to a particular bidder in the Request For Proposals, obtaining tenders through Public Sector Undertakings without open tender or limited tendering norms, putting clauses related to exceptionally high turnovers in the RFP and so on.
All these things are detrimental to open and healthy competition and naturally at the end of the day it is the system which suffers from rampant corruption. The fair players pay without their fault in terms of money as well as loss of reputation.
But, thankfully, the CVC has issued guidelines such as in procurement cases where technical specifications need to be reiterated more than once, it would be prudent to invite Expression of Interest (EOI) and proceed to finalize specifications based on technical discussions and presentations with the experienced manufacturers and suppliers in a transparent manner. As post-tender negotiations could often be a source of corruption, CVC directs that there should be no post-tender negotiations with L1, except in certain exceptional situations and tenders worth above Rs.25,00,000/- must be through invitation by public advertisement. Proper and transparent tendering process has to be followed by Public Sector Undertakings after they offload the work procured from other government agencies on a nomination basis and framing of pre-qualification criteria of RFP's in a transparent manner so as to encourage competition,
The Government of India has also started building e-Procurement applications for different departments and government organizations. Already, several states like Orissa and Karnataka are procuring goods and services through e-Procurement platforms. E-Procurement marketplace links government departments, agencies and local bodies with their vendors. e-Procurement initiatives reduce the time and cost of doing business for both vendors and government; realize better value for money spent through increased competition and the prevention of cartel formation; standardize the procurement processes across government departments/agencies; increase ebuying power through demand aggregation; provide a single-stop shop for all procurements; allow equal opportunity to all vendors; bring transparency and ultimately reduce corruption.
Another praiseworthy initiative is the Right to Information Act (RTI), whereby the authorities have to open up complete information about any public procurement process to any bidders.
Initiatives from CVC, DGS&D, CAG and e-Procurement platform and RTI have, therefore, helped in procurement of e-Governance services in a transparent manner. Now, anyone cannot misuse any loophole to take the public procurement process for a ride thereby preventing healthy and open competition and causing losses to the exchequer.
A point to note is that these reforms are not meant to suffocate the spirit of competition but rather to uphold and safeguard the fair play and healthy market dynamics. There are always, as Abraham Lincoln once remarked, hundred fair players against one black sheep and that is often the tragedy of corporate management and reputation. The government is not interested to police the bidders but help them form right avenues to play fairly and judiciously in the interest of the country's progress.
The ICT companies - both large and SMEs - are a party to these evolving measures of corporate governance.
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