Procurement by the government and it's agencies - whether semi-autonomous or autonomous, is the source of many a scandal. The most notorious has been the famous Bofars issue which caused the downfall of the Congress Party in India.
Although it was an issue of many years ago, it still reverberates in our minds. Pakistan not to be left behind has its own stories to tell. The fact of the matter remains that procurement by the government and it's various agencies and corporations has its own problems- the foremost being acceptance of spurious and non-specified material.
All this is a source of great loss and the main reason for the public's mistrust of the government and it's various agencies. It is also a perception of the public that defective products can easily be passed over or sold to the government- sadly, the happy hunting grounds for purveyors of all things substandard.
Keeping the above in mind, some diligent officers of the government do come up with efforts- though mild and surely not destined to ruffle any feathers- and then succeed somewhat to correct the free-for-all.
As a consequence, we see various departments coming up with standards and specifications and inspection processes. Some of these organizations have also come down heavily on employees who were ever a party to the acceptance of below-mark goods.
All big organizations like the PIA, the PR, Wapda, the KESC, the PIDC, various defence organizations and a host of others have their own inspection systems and through these strive to ensure receipt of correct supplies.
But as supply of spurious and incorrect material continues unabated, one can easily conclude that the inspection systems in vogue are inadequate at the best and there is a need to come up with some other variation. It also is very important to understand the reasons for the present failure.
As this study is basically technical in nature, the angle of collision and corruption would be ignored- and an effort would be made to comprehend the issue keeping all other facets in view.
Similarly, the issue of leaving all purchase activity to a specialized organization- at least for the provincial governments and to the parent organizations in case of other public sector entities and set-ups, would be left for another study.
But the fact that the earlier practice of purchases by the industries department in case of the provincial departments has given way to an unwanted diversity instead of the needed uniformity needs to be understood before any real effort can be undertaken to correct the situation.
During those times the end using departments would concentrate on their core responsibilities and not worry about the purchase activity at all. It was a foregone conclusion that the needed supplies would be available on requirement.
Subsequently, due to purely management problems and lopsided and delayed allocation of funds, the end users or the departments needing the supplies ended up conducting the purchasing activity also.
As corrupt practices have thereafter made serious inroads into this activity, the level of purchases and contracting activity in a particular department or organization makes up it's importance or otherwise. And know nearly everybody makes purchases of one sort or the other. However, separate space is needed to go into more details.
Coming back to the subject, we need to understand as to what actually does the science of inspections contain as a distinct activity. According to experts, this science would first of all contain, as the most necessary ingredient, the understanding of the contracting procedures.
Secondly, would be an understanding of the manufacturing processes of the product in question and the various inhibiting factors to it. Thirdly, would be the insight into the manufacturing conditions of the regions/ areas or countries in case of international tenders, and the regulatory and registering authorities operating there.
All this is most important because specified products would need to be made in accordance with the standards laid out for each category and so on. As a fourth pre-requisite is the knowledge of various manufacturers of the area, region or the countries for possible out-sourcing and fifth is the understanding of the needs and operating conditions of the end-users.
The insight into various standards and specifications set-forth for the product under inspection would come at a later stage-but it would be of great importance. And along with it would be general understanding of the relevant science or engineering.
In short, only thorough professionals would be required to manage the inspection setups- a rarity in Pakistan and specifically in the public sector we have. In the absence of the basic understanding of HRM and HRD, the managers or whosoever doubles as such would simply post un-connected personal in the inspection setups and in the end contribute immensely to the continuing loss.
So first of the reasons of a lacklustre inspection is the wrong man as the inspector. The rot does not end at this point and thereafter is the pressure from within and without the organizations.
The pressure from within is the most difficult to ward off and the reason for the eventual acceptance of spurious goods/ supplies. This inside pressure, besides being an accessory to the acceptance of incorrect materials, results in the stoppage of corrective measures and also in the actual protection of such practices.
The third of the reason is the lack of post inspection scrutiny - not in the shape of more inspections as the same activity need not be taken up again under any other name. This would be the audit of both the normal commercial and the technical modes.
And even if all kinds of post- inspection activities are available, the pressure from within can always circumvent any chances of correction. As a fourth inhibiting factor is lack of understanding of the gravity of continuing losses due to the earlier incorrect inspection. This coupled with the strong apathy being displayed everywhere becomes the most important of the reasons for the continuing loss.
The proper level of HRM and HRD can surely improve upon the present level of inspection, but there is a need to come upon a solution which is more in line with the needs of the day and which also takes care of the assailing forces.
Here the concept of a separate inspecting agency comes to our mind and probably it is this very concept that made mega-departments like Wapda, the PR and to some extent the PIA to set up distinct inspection departments.
It was also in this vein that the then BB's government hired the Swiss company SGS to take up import assessments for levy of the right level of customs duty. It is the same SGS which in the end came to be prosecuted in the Swiss Courts for reportedly bribing it's way to the contract.
Besides many other commercial merits of the contract, it is a fact that customs assessment during that period jumped quantumly in favour of the GoP. As such no one can deny the usefulness of the independent inspector.
India has always been a step ahead of us and it has set up many inspecting agencies- but mostly in the public domain. On the face of it, all these are impartial and independent.
As regards the very important facets of compliance and integrity and the required level of professionalism in dealings, we see that the Indian entities are known to be quite above the board.
The organizations using their services are also satisfied by and large. Further insight reveals that there has been a marked improvement in the quality of technical procurement and the purchasing authorities are now conscious of their acts.
Besides this improvement, it is again seen and on record that the Indian public sector is adding up to its technical resource. The IMF/ WB edicts issued during the last two years too point towards this opinion and the strengthening of the concept of good governance in India.
In case Pakistan follows suit and sets up independent inspection agencies for its various sectors, it would have to keep many important issues in view. These can be summed up as the requirement of integrity of services, the integrity of financial and company records, the effort to ensure against conflict of interests, arrangements for fair and transparent procurement processes, procedures and practices; an open eye policy to ensure against improper giving of advantages to any one (the so-called domestic industry in our case), recognition of the benefits of a free market economy and of competition as the optimal way to allocate resources, the commitment to fully comply with the law, the efforts to abstain from insider trading, etc. and the maintenance of openness and transparency.
As such these eight specified areas remain the basic code of ethics for any inspecting agency in the offing. Additionally, it is very important to ensure against any possible watering down of these pre-requisites ever.
How can these basics take root specially when cronyism and nepotism are deeply entrenched in our society. Punitive action through a ruthless accountability process can, in a way, act as inhibiting to any possible transgressions but that may not be the right process and moreover it all can also eventually spoil with the process becoming a part of the scam in the end.
It is also seen that the accountability process is most slow to take effect in the public sector because of the concept of shared responsibility. It is thus seen that the whole cadre rises up in unison in case of an outside onslaught of accountability; which does not allow correction.
And thus in the end the purchasing agency, the inspecting set-up and the end-users all become accomplices. As such the right way has to follow some other path.
According to experts, this can be achieved through the setting up of independent inspection agencies in the private sector alone. Here individuals and groups can set up companies espousing the goals set forth for such entities.
This would be similar to the old business houses which operate on the basis of their reputation built over decades of impeccable operations. These private and independent agencies would then be under no pressure from within or without as their viability and integrity would solely depend upon the quality of their inspections and the eventual greater life of the inspected product.
And as these private agencies would be under an easier scrutiny of accountability procedures on one hand and under a much sharper eye of both the purchasing authority and the end-users on the other, correct inspection of the purchases can be easily ensured.
Besides the above, we also envisage a constant upgrading of the testing facilities available with these agencies, which would add on to their credibility and the ability to garner more contracts.
As these agencies are expected to offer their expertise and services to more than one client, the present paucity of testing equipment and facilities, because of a smaller and specific scale of operations, would also be overcome. Moreover, unnecessary duplication would also be done away with.
In fact, that is the only way in which proper procurement can ever be ensured. It all would then also lead to the necessary fusion between technical resource and finance houses- an amalgam which too is needed in case any country wishes to attract foreign investment at least in the near future.
Besides attracting investment, these independent inspecting agencies would also resolve the present lament of international bidders who consider the existing arrangements to be loaded against them.
