Tendering irregularities

Pakistan State Oil is embroiled in a controversy over an alleged tendering irregularity, with a complainant accusing the entity's tendering committee of having caused a loss worth $3 million to the national exchequer by awarding a contract to the highest bidder. PSO Chairman offered the assurance on Sunday that a committee consisting of senior officials is investigating the complaint from all aspects, including price difference, and that if the committee confirms financial loss the case will be referred to the agencies. Considering that a new board of governors, comprising dynamic persons drawn from the private sector, is now in place the exercise is expected to yield satisfactory results. Unfortunately, however, the present case is not an aberration. Irregularities in procurement and tendering procedures are galore. To quote one significant example, earlier this year a dispute arose over the award of a multibillion dollar LNG contract to a foreign company, and the complainant moved the apex court. The court gave relief to the complainant, ruling that the contract was in breach of the Public Procurement Regulatory Authority Ordinance, 2002, read with the Public Procurement Rules, 2004. There are countless cases in which a particular ministry or agency either did not take the trouble even to advertise a tender, or ignored the mandatory requirement to provide detailed pre-qualification criteria in tender notices. The criteria, of course, are meant to help potential bidders self evaluate eligibility, and also to ensure transparency. When they are not there, it makes that much easier for unscrupulous elements in various government departments/agencies to grant contracts to pre-selected candidates. It hardly needs saying that such unfair practices discourage competition. Consequently quality, more often than not, becomes a casualty, new investors hesitate to enter the field, and a debt-straddled economy is burdened with more debt. It may not be possible to eliminate the scourge completely, but it can certainly be curtailed to a large extent. As mentioned earlier, it is not due to lack of relevant rules and regulations or a regulatory authority but despite that irregularities are rampant in public sector procurement procedures. Clearly, the existing mechanism is not performing its role well enough. So first of all, it is imperative that the regulatory authority gets an overhaul to fulfil its assigned responsibilities effectively and efficiently. Secondly, in order to make sure that the concerned officials do not misuse their authority to grant undeserved favours, there is need to introduce some sort of a punitive/disciplinary action against those who are found to be errant. Fear of punishment might act as a deterrent. Third and most important, subordinate judiciary must be helped to rid itself of a corruption-prone malleability image so that it delivers justice in all sorts of disputes, including business-related ones. Copyright Business Recorder, 2011