The Bank of Punjab (BoP) published a Request for Proposal (RFP) under Punjab Procurement Regulatory Authority (PPRA) Rules in March 2014. After a transparent bidding process in which local vendors representing the two top most Core Banking Systems in the world participated (Oracle Corporation of USA and Temenos Corporation of Switzerland), the bid for Oracle solution through their partner, Techlogix Pakistan, was evaluated as the lowest bid.
It may be noted that five other banks in Pakistan have selected Oracle as their Core Banking solution (including Askari Bank, Bank AL Habib and NRSP Microfinance Bank) while six other banks in Pakistan have selected Temenos as their Core Banking solution (including Allied Bank, Bank AlFalah and Meezan Islamic Bank). As is clear, the two bids received in response to the RFP were both for world class solutions with an extended and successful track record in Pakistan and with a long history of vigorous competition with each other globally and in Pakistan.
BoP not only cancelled the RFP but called a meeting of other prospective bidders to understand their concerns due to which they did not participate in the bidding. This makes it clear that the Bank has consistently attempted to create an environment of competition amongst the bidders. At this meeting of prospective bidders, the Bank accepted three recommendations from the bidders: a) that bids be allowed in foreign currency since the Bank was requiring a turnkey solution, which included imported computer hardware, b) that the Bank pay a mobilisation advance so that such hardware could be easily imported and c) the bid money was reduced from 2% of the bid amount to 0.1% in order to create a level playing field for local/software vendors. These changes were made to increase the competition and in direct response to the requests from these prospective bidders.
Approach adopted in the third and fourth RFPs, was specifically recommended by the Board of Directors of BoP and the relevant Board Committee which included the Chairman Punjab IT Board and Secretary Finance, Government of Punjab. This requirement ensures that there are no hidden future costs that the Bank may have to incur if it opted to procure the Core Banking software alone (for example, escalating hardware costs).
The Chairman of PITB and the Secretary Finance in their capacity as members of the board of directors of BoP suggested that the bank float a turnkey RFP on the basis of Total Cost of Ownership. What is not noted is several relaxations were introduced in the most recent RFP. Most importantly, the Board of Directors (which specifically included IT and Finance experts) felt that only a Total Cost of Ownership based RFP would correctly reflect the true cost of acquisition of the Core Banking solution. The Bank was all the time conscious of making the process as transparent, fair and efficient as possible while seeking the best economic value for money in this transaction.
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