Company with fraud record gets nod

A tender evaluation committee has recommended a UK-based company for supplying 15 million machine readable passport (MRP) booklets though it is aware of the bidder's past records of fraudulence and bad performance.
At the time of tender evaluation, the committee was informed that De La Rue had falsified results of a quality control test and supplied substandard currency paper in the neighbouring India, sources in the Department of Immigration and Passport (DIP) said. But it ignored the fact.
De La Rue had not mentioned this drawback in its proposal submitted to DIP, which was a violation of the tender document as well as the public procurement act (PPA) and the public procurement rule (PPR), the sources said. And that was a good enough cause to reject the company's bid.
According to the terms and condition of the tender document, a prospective bidder shall not have a “defective” supply record under any contract.
However, the UK-based company had its contract with India cancelled in 2010 for supplying substandard banknote paper.
Two investigations by the Indian authority and the company itself proved its guilt, which led to the company publicly acknowledging the fact, said reports published in Indian and British newspapers.
While submitting tenders, all bidders give an undertaking that, "We confirm, we do not have a record of poor performance such as abandoning the supply, not properly completing contracts, inordinate delays or financial failure."
As per procurement rules and regulations, a bidder has to declare its previous records of fraudulence and must not misrepresent any fact, a former director general of Central Procurement Technical Unit (CPTU) said, preferring not to be named.
"But De La Rue misrepresented the fact of what it had done in India," he said, adding there was no reason for considering a company that proclaimed nothing about its crimes in the tender submission and was later found to be guilty.
After conducting an internal investigation, the company publicly admitted that “some of the company's employees had deliberately falsified certain paper specification test certificates for a limited number of customers”.
The Indian also denied the company “security clearance” to participate in future tenders.
DIP Director (admin and accounts) Rafiqul Islam, who is the chairman of the seven-member tender evaluation committee, says otherwise.
According to him, no company should be deemed ineligible on the basis of internet documents or press reports in other countries.
"We can go for action against a company if there is a lawsuit against it for forgery and fraudulence," he said, referring to PPR.
However, the former CPTU boss ruled out this claim. A tender document is prepared in line with the related acts and rules, including PPA and PPR. So it is the main parameter for bids evaluation.
PPR (evaluation of tender) says tenders shall not be evaluated on any basis other than the criteria specified in the tender document and that a tender would be accepted only if it fulfils the mandatory requirements set in the tender document.
A company can be declared ineligible even if it fails to meet only one of the mandatory criteria of the tender document, said Amulya Kumar Debnath, director general of CPTU and chief of the implementation, monitoring and evaluation division.
In September last year, DIP invited an international tender to buy 15 million MRP booklets. The stock of 6.6 million booklets procured in 2010 will be exhausted by July. The new booklets will be better than the current ones for a new design and improved thickness of the cover as well as inside pages.
Seven companies bid for the task. Of them, two companies -- De La Rue and Polish Security Printing Works met all the physical criteria tested by Security Printing Corporation of Bangladesh and thus became eligible. De La Rue demanded $33 million while the other one $37 million for the job.
“I find no reason for the government to take the risk of appointing a firm that had failed to comply with all the criteria for sensitive currency paper in India,” said a DIP official, requesting anonymity.
The evaluation committee submitted its report with the recommendation to Director General of DIP Abdul Mabud. The report is supposed to be forwarded to the home ministry in a day or two.
When contacted, DIP DG Abdul Mabud said he knew nothing about the issue.