By the end of this financial year, the country would have a whole new procurement law, both for the public sector undertakings and the government departments. However, its implementation from the next financial year would be in a phased manner, officials involved in formulating the law told FE.
The first stage of implementation would begin from a select group of public sector undertakings, where all procurement would move to the e-auction methodology. In the second stage, e-procurement would become mandatory for all the other PSUs and in the third phase it would cover government departments and ministries.
Later, even disposal by PSUs and government departments would be done via the e-auction methodology.
A committee headed by former corporate affairs secretary Vinod Dhall has prepared a report on the procurement law. The concept gained credence last year with several instances of corruption coming to light and the success of e-auction of 3G spectrum which netted government a revenue of over R1 lakh crore. It was felt that the e-auction methodology for buying and selling is the best way to bring in transparency and reduce corruption.
This is how the e-procurement for PSUs would work as explained by the officials: All routine purchases like office furniture, computer hardware and software to materials and components for which currently tenders are floated would move to the e-procurement system.
The companies would have to put up on their respective websites items of purchase with specifications. Vendors would have to get registered, given user IDs and passwords and the e-auction would take place in descending order.
This is so because the PSUs would be spending departments so the lowest bidder would win. In the 3G spectrum case since the government was the seller the auctions were on ascending basis, meaning that the highest bidder won. The e-auctions would be closed one meaning that while the lowest quoted price would be known to all the bidders they would not get to know who?s bidding how much.
Barring a few strategic purchases, a list of which would be drawn up later, all other items would move to the e-procurement category. For instance, a PSU like Steel Authority of India buys bulk of its met coke each year from overseas markets through a process of tenders. Next financial year onwards it would have to do the same through e-auctions. This would broad base the the list of sellers and thus reduce prices for the company.
Sources said that the PSUs would have to put up a calendar of their periodic purchases and the frequency of such auctions. Only strategic purchases by defence and security-related organisations would be kept out of e-procurement.
The same system would be applied to the government departments and the directorate general of supplies and disposal (DGS&D) would eventually switch to the same system. The DGS&D is in charge of purchasing all items ranging from furniture to cars and computers for Central government departments.
The current system of tenders for purchase has huge scope for corruption. 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.