Transparency In Tendering System: Need for A Holistic
Approach
-- Abhishek Swami, ’99[1]
Its been over a month since I came across Shri Senani’s article titled Enhancing Accountability in Tendering System on Indian Railways. One expected a flurry of critical inputs on the issue raised by him, namely transparency in tendering system. However, in the past one month only one rather brief response enumerating certain procedural details has been posted. This gives rise to certain questions:
· Is the present tendering system ideal or conversely so hopeless that no suggestions on improving it are required?
· If no, then do we not need to be less indifferent to critically examining the issue?
· What is the nature of changes needed? Are these to be merely inward looking? Or is there a need to review the present system keeping in mind the emerging trends at the larger global level, which are bound to impact us in the medium term (within a decade)?
· What is the kind of ground work we need to do in order in order to make the whole process less archaic and more E-friendly?
The following article seeks to build on the issue raised by Shri Senani and also answer some of the questions raised above. It is important that the IRAS as a cadre not only be aware of the developments taking place on the issue of transparency in government procurement but that it also critically contributes to it, unless it wants to be forced to implement a policy it had very little role in formulating.
Field officers at the operational level must contribute to policy formulation since once formulated any guideline will have to be implemented by them and not those negotiating the agreement at international forums. Also prior awareness of larger trends can help shape present practices in light of coming events. It is thus a useful two way street wherein we can shape the future and also prepare to face what it has to offer.
Secondly, IT may be used as a means for bringing about greater transparency. In this context it would be highly useful to look at the experience of countries like Chile and Mexico, which have already to a large extent brought in the concept of electronic procurement.
(
I )
The principle issues relating to transparency
in the Working Group on Transparency In Government Procurement are the
following:[2]
As a cadre that is closely related to the procurement process in the railways I believe IRAS officers can contribute in a major way to these discussions.
The developed countries, in particular the USA and the
EU have been keen on extending the WTO rules to government procurement. In
pursuance of this goal they have already arrived at a plurilateral agreement
(an agreement which is not binding on all members of the WTO but extends only
to those who voluntarily accede to it) on government procurement. The agreement
extends WTO rules to government procurement. The agreement has been acceded by
most of the developed world and many are in the process of negotiating their accession.[3]
So far developing countries have refused to become a party to this agreement. However, the developed countries are vigorously pushing forth this agenda. In fact it was a major item on the agenda both at Singapore and Doha.
As a compromise formula it has
been decided that the issue of transparency would be addressed instead of that
of market access. The
First WTO Ministerial Conference in Singapore set up the Working Group on
Transparency in Government Procurement Practices in December 1996.[4]
The Working Group is a multilateral body that is it to include all WTO members,
thus India too is a member of it. The group, it is claimed, will not look
at preferential treatment for local suppliers, so long as the preferences are
not hidden.
The first phase
of the group’s work is to study transparency in government procurement
practices, taking into account national policies. The second phase is to
develop elements for inclusion in an agreement.
The meetings of the working group reveal that the agenda is to make the term transparency as broad as possible so to get in to negotiation stage issues, which are related to the larger theme of government procurement. Unfortunately amongst some sections of the government there still persists a belief that the justness of one’s cause can prevent the inevitable. The Uruguay round has shown how by ignoring the agenda of the West we ended up signing agreements without being adequately prepared for driving a hard bargain during the negotiation stage. The present article, for reasons of space does not go into how the issue of transparency is gradually threatening to include wide areas which India sought to avoid discussion in the first place. It would suffice to mention here that such a danger exists and one would not be wise to scoff at the issue of transparency as “inane niceties”.
( II )
I believe that it is still premature to
shift to too great reliance on IT. The access or comfort level of tenderers
with internet can not be taken for granted given the low internet penetration
levels in our country. However, a start can be made now since once the desired
level of IT spread is achieved the Railways should not be caught napping.
Again for constraints of space one will
not go in the potential difficulties which an entirely computer based tendering
system would entail. Yet one could point out the example of countries like
Chile which has already shifted to a e-procurement system to a large
extent. Under it companies doing business with the public sector do
not need to search through newspapers or the Web for information about bidding
opportunities. Instead, they only need to register in the areas in which they
do business (e.g., office furniture, construction services, IT consulting,
etc.). Whenever a public agency needs to purchase goods or contract a service,
it fills out a request in the electronic system, specifying the kind of
operation and including all the documentation and information associated with
the request. Automatically, the system sends an e-mail to all the private
companies registered in that selected area, minimizing response time and
providing an equal opportunity for all firms. The system also provides,
on-line, all the information related to procurement operations, including the
public organization's name, address, phone, e-mail, fax and position of the
public officer in charge of the operation. Finally, at the conclusion of the
bidding process, the e-system provides the results: who participated, the
proposals, the economic and technical scores, and, lastly, who won the bid or
obtained the contract. [5]
Such a system
in its entirety may not be possible in India given the differing conditions
prevailing here. However, models adopted in other countries can serve as useful
learning tools. For instance in Chile the mere rhetoric of Information
Technology was not used, instead concrete studies were conducted to demonstrate
the potential benefits of such a change. Efficiency gains were estimated at
1.38% of the total central government expenditure.
The need of the hour is to conduct
similar concrete studies of efficiency gains as opposed to transition costs and
streamline the existing tendering processes and standardise them to the extent
necessary for their electronic processing.
It is only if such mundane and unspectacular and back breaking ground
work is done that the dream of a IT based tendering system can be actualised.
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[1] I am thankful to Shri Sanjay Upreti, professor accounts management,Railway Staff College, Vadodara for his suggestions and critical inputs.
[2] The list is based on the checklist of items discussed in the first post Doha meeting of the WGTGP on 4th may, 2002
[3] The countries already a party to the agreement are: Austria, Belgium, Canada, Denmark, European Communities, Finland, France, Germany, Greece, Hong Kong China, Iceland, Ireland, Israel, Italy, Japan, Korea, Liechtenstein, Luxembourg, Netherlands, Netherlands with respect to Aruba, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, United States and the United Kingdom.
[4] The relevant article of the SINGAPORE MINISTERIAL DECLARATION adopted on 13 December 1996 states “21. We further agree to: establish a working group to conduct a study on transparency in government procurement practices, taking into account national policies, and, based on this study, to develop elements for inclusion in an appropriate agreement;”
[5] http://www1.worldbank.org/publicsector/egov/eprocurement_chile.htm