116 state bodies bypassed Public Procurement Act

- PRAHLAD RIJAL, Kathmandu

Apr 14, 2019-

As many as 116 state bodies under various ministries bypassed the Public Procurement Act while buying construction materials and other logistical equipment worth over Rs2 billion by avoiding the tender process last fiscal year, according to the Office of the Auditor General.

A report by the Office of the Auditor General made public on Friday for the fiscal year 2017/18 said that the practice of procuring goods and services multiple times from a single firm without inviting open bids suggests non-compliance of regulations.

As per the provisions of Public Procurement Act (2007), state bodies are not allowed to downsize required goods so as to limit the competition among only a handful of firms.

However, the report highlighted offices under the Ministry of Urban Development, Ministry of Irrigation, Ministry of Water Supply and Sanitation, Ministry of Physical Infrastructure, Ministry of Federal Affairs and General Administration and Ministry of Education, Science and Technology engaging in malpractices such as direct procurement.

The auditor general’s office has found that Building Construction Division Office Biratnagar, Rupandehi, Surkhet  and Building Technology Research and Training Centre, Hetauda  procured machinery and furniture worth Rs131.9 million for respective provincial ministries without calling for procurement bids.

“Twelve offices have sliced procurement requirements for renovation and road construction works in 722 portions, bought the goods and made direct payments amounting to Rs394.9 million,” the report says.

Time and again stakeholders have raised the need for transparency in the procurement process.

The Public Procurement Monitoring Office (PPMO) in its report last year had also acknowledged that the unlawful practice of “slicing and packaging” procurement requirements so as to limit the competition and manipulating goods specification in favour of specific brands has been growing. The same report concluded that no substantial progress has been made in the effective implementation of principles suggested by the authorities.

But Shreedhar Panthee, director at the Public Procurement Monitoring Office, said public procurement is a complex process with many technicalities, which government staffers are unaware of.

“On the other hand, some corrupt government officials bypass laws, despite stringent monitoring by the Public Procurement Monitoring Office,” Panthee told the Post. “Although the PPMO organises interactions, training and sample monitoring in many government offices every year, staffers are frequently found to be involved in slicing and packaging.”

According to Som Bahadur Thapa, former secretary of the Parliamentary Secretariat, who also served as a member of the Public Accounts Committee, government officials cannot use the Act being too complicated as an excuse for their inability to curb the malpractice.

“Moreover, if the Act is complicated, the government must announce that it faces difficulties implementing it and should call for an amendment,” he told the Post. “Firstly, executive bodies should take action against officials who bypass the procurement provisions to make payments or select firms guided by vested interests. And the Public Accounts Committee must also hold discussions and make the government enforce stronger regulations,” Thapa said.

Provisions in the Procurement Act allow the state bodies to carry out activities limited to public procurement consultations, awareness training, orientation and strengthening through non-governmental organisations. But six offices under the Ministry of Urban Development outsourced works related to drainage construction, road improvement, retaining wall and park construction to 326 non-government organisations and released payment amounting to Rs1.27 billion in the fiscal year 2017-18.

The report states that government officials have also outsourced works that could be executed by existing human resources at government offices and paid Rs3.41 billion to consultants.

Against this backdrop, the Office of the Auditor General has suggested that the government hold officials involved in handing over public construction projects to NGOs and releasing payments to them accountable.

Published: 14-04-2019 08:41

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