The government is planning to adopt electronic auctions for all non-strategic procurements, abandoning the existing tendering system. The move, a direct fallout of the multiple procurement scandals related to the 2010 Commonwealth Games, is aimed at improving transparency and eliminating inefficiencies. All ministries and public sector undertakings will have to compulsorily follow the e-auction system.
Sources involved in preparing and finalising the proposal told FE that e-auctions leave no scope for favouritism, checking the possibility of corrupt practices. The move also promises huge savings for the government as e-auctions cut out several layers of inefficiencies in the tendering system.
On October 15, the government had appointed a committee headed by former comptroller & auditor general VK Shunglu to probe corruption charges around CWG 2010. Officials said that a formal note would be shortly sent to expand the committee’s terms of reference to enable it to examine how much savings would have been possible had e-auctions been adopted.
Once the proposal is cleared, the directorate general of supplies and disposal (DGS&D) would scrap the tendering process and shift to e-auctions. DGS&D is in charge of purchasing all items ranging from furniture to cars and computers for central government departments.
?All PSUs would also be asked to shift to the new method,? officials said. Only strategic purchases by defence and security-related organisations would be kept out of e-procurement.
In e-auctions, DGS&D would shortlist vendors for each product category, and a list would be displayed on its website. Each vendor would be given passwords and whenever any government department has to procure any item, the same would be listed on the website and auctioned on a given date. The lowest bidder would be awarded the contract. The PSUs can customise the process to suit their individual needs.
Explaining the scope for corruption in tendering, officials said the discretion to scrap a tender and order re-tendering is often misused. ?Officials interested in awarding contracts to parties of their choice scrap the tender and order re-tendering if their party’s bid is not the lowest. This way, they are able to advise their candidates on the bid value the next time the tender is floated,? sources said.
E-auctioning attracted government attention after the success of the 3G and BWA spectrum sale, which yielded revenues far above expectations. Similarly, Coal India turned around only after it switched to e-auctions for selling coal. As reported by FE earlier, the government planning e-auctions for other resources like ore, road contracts and FM radio spectrum.