27-12-2012, 02:12 PM
CENTRAL VIGILANCE COMMISSION GOVERNMENT OF INDIA
1CENTRAL VIGILANCE.pdf (Size: 373.84 KB / Downloads: 310)
INTRODUCTION
The Chief Technical Examiner’s Organisation (CTEO) in the Central
Vigilance Commission is the technical wing of the Commission and it advises the
latter on all technical /contract matters. One of the important functions of the
CTEO is to conduct an independent technical examination of various works,
reported by the CVO’s in their quarterly progress reports. The preponderant
objective in such examinations is to detect malpractices in the award and execution
of works as also to contain the recklessness and financial imprudence which may
result in losses to the organisation. However, the role is not limited to detection of
malpractices and punishment of errant practices. It has also been our endeavour to
help improve the systems in these organisations so that a recurrence of
lapses/irregularities is prevented in the contracts and there is better technical and
financial control that result in efficiency and transparency outcomes. Keeping this
perspective in view, two booklets - one on Procurement Systems and other on Civil
Construction Works were issued by the Commission. In continuance of this effort
while also taking into account the persistent demand from officials of various
organisations, this booklet on lapses/irregularities often observed in the award and
execution of electrical, mechanical and allied works has been compiled, with
guidelines for improvement.
SCOPE
The award and execution of contracts is a very vast area and it is not possible
to discuss the whole gamut of issues involved with this activity in a small booklet.
However, an effort has been made to highlight some of the important areas, which
are more prone to recurrence of lapses/irregularities, in a large number of
organisations. The booklet has been divided into two parts - Part I deals with award
of Contracts and Part II with the execution of Contracts. The main emphasis is on
objectivity and transparency in award and execution of contracts. A dire need is
also felt to inculcate a culture and spirit of professionalism amongst officials
managing the contracts so as to ensure high standards of quality and timely
completion of works.
WORKS MANUAL
Ideally, the objective of any public contracting is to get the proposed work
executed as per bid specifications within a given time schedule and at the most
competitive prices. To achieve this objective, it is essential to have welldocumented
and customised policy guidelines in each organisation so that this vital
activity is executed in a well-coordinated manner with least time and cost overruns.
It is felt that the absence of a proper Works Manual in most organisations constitutes a significant weakness in the system as it not only leads to adhocism and
arbitrariness in decision making but also results in a lack of quality supervision in
the execution of works as benchmark standards are not available. This also
encourages the ‘interested officials’ to indulge in corrupt practices, due to lack of
accountability in the system. Surprisingly, some fairly well established
organisations have no Works Manual despite awarding contracts for many years.
Works executed here may be based on the whims of individuals or the
responsibility may even be completely abdicated to the consultants. In other
organisations, where the manual is available, it is found that the same has not been
updated for years. Such a situation is far from satisfactory and needs to be
corrected on an urgent basis.
NECESSITY AND JUSTIFICATION OF WORK
In the course of inspections by the CTEO, it has been noticed that at times,
proposals are initiated and works executed by the organisations without establishing
the need or justification for such works. In some organisations there is a frenzy of
activity at the end of the financial year in order to indiscriminately part funds (lest
they should lapse), in either frivolous activities or in 2nd and 3rd stage priority
proposals. In worst cases, the proposals are initiated in collusion with contractors to
buy and install equipments nearing obsolescence resulting in completely
infructuous expenditure.
APPOINTMENT OF CONSULTANTS
Some organisations appoint consultants due to lack of in-house expertise in
technical matters. While hiring consultants is justified for such organisations, of
late, it has been observed that even the engineering departments and some PSUs,
with large technical set-up have indulged in the practice of hiring consultants. It
has invariably been noticed that the appointment of consultants is done in an ad hoc
and non-transparent manner without inviting tenders and without collecting
adequate data about their performance, capability and experience. In some cases
the consultants were appointed after holding direct discussions with only one firm
without clearly establishing the job-content and consultation fee payable to them.
Often the scope of work entrusted to the consultant is either not defined properly or
the consultant is given a free hand to handle the case so that experiments with
impractical, fanciful and exotic ideas result in unwarranted costs. The organisations
display an over-dependence on consultants and invariably abdicate their
responsibility completely. The officials do not even oversee the working of the
consultants resulting in the latter exploiting the circumstances and at time, in
collusion with the contractors, give biased recommendations in favour of a
particular firm. It has also been noticed that the consultants recommend acceptance
of inferior items/equipments and also give undue benefit to the contractors like nonrecovery
of penalties for the delayed completion. Following illustrations are
relevant to highlight shortcomings in appointment and functioning of consultants.
ESTIMATES
In some cases, it has been observed that the estimated value put to tender is
at large variance with the actually accepted value of the contract. The reasons for
this can be attributed to either wrong assessment of quantities of items or the
sketchy estimates prepared in an unprofessional manner. Sometimes to arrive at the
estimated value for a particular item, the rates of lower capacity items are
extrapolated or a linear escalation is added to the last accepted rates for similar
items. The estimates thus prepared are found to be far from realistic. This results in
award of contracts at very high rates vis-à-vis the estimates. In one hydroelectric
project, against an estimated cost of about Rs.300 crores, the contract was awarded
at Rs.600 crores. To justify the rates various factors which were not tenable at all
were considered and the estimated cost escalated so as to bring it as close to the
quoted rates as possible. The award, despite a padding of the estimate was still at
31% above the justified amount. In some of the big value turnkey projects, it was
noticed that the techno-commercial feasibility reports are prepared by some external
agencies and the project award and implementation is done by different departments
- at time with a considerable time gap. In one such case, in the award of a contract
for an effluent treatment plant; the implementing agency, initially considered the
estimated cost in the feasibility report as correct and the bids were also invited
based on those estimates. However, the work was subsequently awarded at a rate
almost 100% more than the estimated cost and the vast difference was justified on
the plea that the estimate was deficient and unrealistic.