Implementation of IT-based solution: FBR grants licence to NRTC in controversial manner?

In an unprecedent and seemingly controversial move, the Federal Board of Revenue (FBR) has granted licence for implementation of IT-based solution for electronic monitoring and track and trace system for tobacco products to National Radio & Telecommunication Corporation (NRTC).

In this connection, the FBR issued a letter to the corporation here on Tuesday.

According to the FBR's letter, the Licensing Committee, constituted under Licensing Rules 2019 notified vide SRO.250(I)/2019 dated February 26, 2019 as amended vide SRO.918(I)/2019 dated August 7, 2019, submitted its recommendations vide letter No UO 1(I) Chief (IR-OPS) (T&T)/2019, dated October 2019.

The recommendations of the Licensing Committee were considered in the Board-in-Council meeting dated October 14, 2019 in which the Board unanimously decided that the Member (IR-Operations), FBR, may take further steps in light of the recommendations made by the Licensing Committee, in the light of the Licensing Rules 2019 (SRO No. 250(I)/2019, dated February 26, 2019) read with PPRA Rules 2004, said the FBR.

The perusal of the minutes of meeting dated October 14, 2019 issued by the Licensing Committee revealed that the M/s NRTC has offered price of Re 0.731 with unit of 1000 stamps. However, M/s NRTC claimed that this price is mistakenly declared, therefore, they filed the representation in Dispute Resolution/Grievance Redressal Committee for correction of unit price as Rs 731 per 1,000 stamps instead of Re 0.731 per 1,000 stamps which was accepted by the Dispute Resolution/Grievance Redressal Committee vide order dated October 28, 2019 on the basis of clarification provided by the Law and Justice Division, the FBR maintained.

Taking this into account, the Board has granted license to the said corporation at price of Rs 731 per 1,000 stamps for a period of five years to establish, maintain and operate the whole process/system of Trace and Trace System for tobacco products in Pakistan subject to the terms and conditions as stipulated in Licensing Rules 2019, Invitation for Licensing (IFL) and other relevant laws, FBR letter added.

Reliable sources said that in an unprecedented move, the FBR awarded the multimillion dollars Track and Trace System License to the said corporation going against the adverse position taken by its own Licensing Committee Evaluation Report against NRTC financial bid. The evaluation report of the FBR said, "The bidder has an offered price of Re 0.731 with the unit of 1,000 stamps. However, the bidder claimed that this price quoted is per one stamp and not per quoted 1,000 stamps. As per Annex-6 of IFL, the bidder was required to offer rate per 1,000 stamps and not per stamp. Therefore, the rate quoted in the bid is to be taken such i.e. 0.731 per 1,000 stamps. However, if contention of the bidder is accepted, the cost comes to Rs 731 per 1,000 stamps. Apparently, the bidder has violated annex-6 of the IFL and if the bidder does not agree to Rs 0.731 per 1000 stamps, the next lowest responsive bidder may be offered the license," the FBR evaluation report added.

Sources were of the view that under advice from the Law and Justice Division, the Grievance Redressal Committee accepted that NRTC committed a mistake and accepted their price as Rs 731 per 1,000 stamps. This move on the pretext of a bona fide clerical error, is in violation of procurement laws as the bidders must hold bidding instructions as sacrosanct and the intention behind bona fide or mala fide error cannot be determined arbitrarily by the Law and Justice Division on the mere acceptance of the bidder that it was inadvertent.

They added that the FBR in a rush to meet its commitments made with the IMF expedited the due process in awarding the contract and left several questions unanswered such as whether or not the licensee has evidential proof of capability, successful references and clearance from World Health Organisation and Federal Commission of Tobacco Control (FCTC) in order to avoid any commercial dependency or collusion with the tobacco manufacturers who have comprehensively addressed and identified track and trace providers suspected to be in collusion with the tobacco manufacturers.

Copyright Business Recorder, 2019