Iron ore procurement: violation of rules pointed out in PSM tenders
Public Procurement Regulatory Authority (PPRA) has directed Pakistan Steel Mills (PSM) that the requirement of 10 percent of the contract amount as performance guarantee from the successful bidder has to be clearly mentioned in the bidding documents and action taken accordingly while signing the contract with the successful bidder.
Deputy Director, PPRA, Muhammad Farooq in a letter sent to PSM on February 21 has clarified and invited the attention of PSM to Rule 39 of PPR - 2004, which prescribes the maximum limit. Adviser, Transparency International Pakistan, Syed Adil Gilani has also in a letter sent on February 23 to the Chief Executive Officer, PSM, Major General Muhammad Javed (Retd) pointed to the violation of PPR-2004 in tenders for the procurement of iron ore.
In continuation to TI-Pakistan letter dated February 22, on the subject of bid security and performance security, he informed Pakistan Steel that letter issued by PPRA on January 30, allowing Steel Mill, performance guarantee from bidders at the option of Pakistan Steel, has been superseded by PPRA letter dated February 21, 2013.
TI-Pakistan again informed Pakistan Steel that due to the following conditions the tender issued for long-term iron ore procurement is in violation of PPRA Rules.
1. Bid Bond and Performance Bond is from bank only, as against PPRA Rules which allows insurance bond from an insurance company having at least AA rating from Pacra/JCR.
2. The minimum Fe content for lump ore is 60 percent, in the tender notice no: BMD /7th gen/2013-18/12, whereas it is described as 58 percent in tender Document Price Adjustment against Deviation from Specifications.
3. Authority to Pakistan Steel to re-consider and review the offered price and other terms and conditions with any of the bidder or with all the bidders at Pakistan Steel Office, Bin Qasim, Karachi at any time during the validity of the offer.
4. Authority to Pakistan Steel to relax / waive or add any condition.
5. Authority to Pakistan Steel to reject any or all offers at its sole discretion.
Adil said: TI-Pakistan is of the view that the above five violations are not allowed under Rule No 10 specifications, Rule No 32, Discriminatory and difficult conditions, Rule No 40. Negotiation not allowed, and PPRA Regulations 2008, Regulation No 3. Bidding documents.- A procuring agency when engaged in procurement of works, shall use the standard form of bidding documents prescribed by the Pakistan Engineering Council constituted under the Pakistan Engineering Council Act, 1975 (V of 1976).
Unless the above quoted anomalies are corrected, procurement against this tender is liable to be deemed under Rule No 50, as mis-procurement.
TI-Pakistan was striving to have Rule of Law in Pakistan, which was the only way to eliminate corruption and have good governance in the country, he said.
Copies of the letter have been forwarded for the information of: Chairman, Public Accounts Committee, Islamabad; Registrar, Supreme Court of Pakistan, Islamabad; Chairman, NAB, Islamabad; Auditor General, Islamabad; Managing Director, PPRA, Islamabad - with a request to take action under section 5(2) (a) "monitor application of the laws, rules, regulations, policies and procedures in respect of, or relating to, procurement" and under section 5(2) (i) of the PPRA Ordinance 2002.
Share this post
