LAHORE: The Bank of Punjab’s Board of Directors is likely to award a vital contract of procuring core banking system to a foreign IT firm at higher rates in coming days, ignoring the lowest bidders allegedly in violation of the prescribed rules and regulations.

Since the core objective was to ‘facilitate’ a certain company, the bank sought tenders amid request for proposals (RFPs) from the interested parties for four times - in 2009, 2011, last year and finally in March, this year, Dawn has learnt reliably.

The situation even forced a local company, which claims to be a winner of the contract being a lowest bidder after evaluation in 2009 and 2011, to write to National Accountability Bureau (NAB) for a thorough probe.

On the other hand, the BoP management dispels the impression, terming the entire bidding process transparent. “The process adopted to award the contract was based on merit, allowing local and foreign IT firms to come and participate in it subject to their eligibility, competence and adequate professionalism,” BoP President Naeemuddin Khan told Dawn.

Firm with low bid wants NAB to probe core banking system project

According to documents, a majority of local IT firms boycotted the 2013 and 2014 bids after the bank management introduced ‘unnecessary’ and ‘discriminatory’ conditions intentionally to keep them out of the race, enabling its favourite company to win the contract.

In last year’s bid, there were no bidders, except one namely Techlogix (a local partner of an international IT firm).

The BoD cancelled this bid after it found not a single competitor. Finally, another company was brought allegedly by the administration in the 2014 bid to show it a competitor of the Techlogix.

The bank had floated the very first tender in September 2009, followed by the second one in July 2011. Interestingly, the bank issued the same tender for third time in January 2013 without cancelling the second tender in violation of the PPRA rules. However, the third tender also could not sustain long due to ‘discriminatory’ conditions and the bank issued the fourth one in March 2014. Those having boycotted the third and fourth tender respectively are carrying a ‘strong’ case.

According to them, the repeated cancellations of the same tender and not giving the notice thereof to bidders is a sheer violation of rules 4, 26(2), 34 & 35(4) of Punjab Procurement Rules, 2014.

“The bank has violated the basic principles of fairness, transparency and efficiency by including difficult and discriminatory conditions and delaying the process time and again to favour a particular bidder. The bank has failed to ensure a level playing-field and also discouraged the domestic suppliers against the foreign one, bidding under cover of a local firm,” deplores Lutfullah Khan, chairman of the Autosoft Dynamic (Private) Limited, one of the bidders that claims to be a winner of the first two bids being lowest one.

He says the bank management had ‘engineered’ terms and conditions to the tender documents to facilitate a particular international bidder at an exceptionally high price, almost three times higher than the local vendors.

The documents made available to Dawn reveal that the bank scrapped the very first tender due to non-compliance of PPRA rules and floated second tender in July 2011. Six bidders participated in the bidding and the bank shortlisted three bidders including AutoSoft Dynamics (Pvt) Ltd, Techlogix (Pvt) Limited and SunGard.

It further shortlisted AutoSoft as the lowest bidder with highest score on relevant terms and conditions during the bid evaluation process.

Meanwhile, the foreign firm (an India-based company having its registered office in Mumbai) approached the bank in contradiction of rule 2-1(p) of PPRA that states that influencing the procurement process is a corrupt and fraudulent practice and offers to freeze the exchange rate of US dollar subject to acceptance of its bid. Since the bank was lending an ear to the firm of its choice, it formally asked the AutoSoft’s BoD to submit the total cost of ownership (TCO) for 10 years, which was not part of the original tender.

The company’s TCO was also lower but the bank manoeuvred the TCO by selecting desired information from it. At this stage the bank inducted a member in its BoD from Punjab Informational Technology Board allegedly to fabricate a tender document to expel the local bidders with ‘biased’ and ‘difficult’ conditions for them. The bank held the award of tender in abeyance amidst approval procedure without annulling and notifying the cancellation to the AutoSoft.

The bank advertised third tender in violation of the PPRA rules on Jan 10, 2013. The local IT firms agitated strongly to the move of clubbing the hardware and software besides some other uncalled for terms and conditions in the tender. Considering the reservations and apprehensions of the interested bidders on the terms and conditions of bidding documents, the bank extended the deadline three times. But no one from among local IT firms turned up to submit a bid except the company in-question. Eventually, the bank had no option but to cancel the tender.

The Punjab Finance Department also intervened in the matter and held a meeting with local vendors to inquire about their grievances. However, all concerns raised in the meeting fell on deaf ears of competent authority (the secretary) and the bank floated tender for the fourth time in March 2014. The local IT firms boycotted the bidding process again and the bank extended the deadline twice and finally got only two bidders including the ‘controversial’ one.

“It is evident that conditions of the bidding documents were not only difficult but discriminatory. Several renowned local companies were interested, but due to ‘engineered’ terms and conditions no one except two, including the bank’s favourite firm submitted the bid despite the fact that the bid submission date was extended many times,” reads a letter written to NAB’s director general by one of the protesting companies.

It urges the bureau to initiate a comprehensive investigation. “The BoP should be forced to tender afresh in strict compliance with public procurement rules 2014 especially rule 34 and provide fair and equal opportunity to all the interested bidders,” the letter says.

Talking to Dawn, Bank President Naeemuddin termed the firm opposing the bidding process ineligible.

“They themselves are thieves. They didn’t participate in the bids despite the fact we extended bidding dates after they formally requested us to give some more time,” he said.

He claimed that since the entire bidding process was so transparent, an independent IT steering committee of experts, including the PITB chairman, was constituted to evaluate the bids.

This committee also prepared specifications related to the core banking system to be introduced in the bank. He said he and the committee kept aloof from the bidding process so that no one could complain in this regard.

“Since we have all proof to prove the complainants’ stance wrong and baseless and you can even see all that, we will get FIRs registered against such people defaming us unnecessarily and unlawfully,” the BoP chief added.

Published in Dawn, December 26th, 2014