Be it laying stormwater drains or carrying out patch work on roads or repair and renovation of civic infrastructure – all such activities by the civic body has to go through a tendering process to select eligible contractors to carry out the work.
In the past, the tendering process has come under the scanner due to allegations of corruption and favouritism to certain contractors. Anti-corruption activists, residents and contractors have called for greater transparency in the tendering process to ensure the contracts are awarded to those who are best equipped to carry out the work.
Here is a look at the various steps involved in the tendering process for civic work in Chennai and how it can be made more transparent and accessible.
Tendering process for civic work in Chennai
“During the budget allotment discussions, the local body will take into account the pending request for civic work in each ward. In addition to this, the residents would have already made several representations and the activists would have also given a list of demands in a particular area over some time. All these lists will be compiled by the local engineers of the civic body and presented to the council. The council will make a final list of work to be carried out and then the tender will be floated accordingly,” says Radhakrishnan of Arappor Iyakkam, an NGO working to combat corruption.
There are two types of tenders – open tender and limited tender.
“Limited tenders are where a set of pre-selected contractors are allowed to participate. These tenders are for specific work for a preferably low-value project. Open tenders see participation by multiple bidders for high-value projects,” says Prashanth Goutham of Arappor Iyakkam. “Open tenders ensure healthy competitions as multiple bidders take part in it.”
Step 1: Advertise in Tender Bulletin
Once the Greater Chennai Corporation council decides on the projects for which tenders must be floated, the tender has to be advertised in the Tender Bulletin of the GCC’s web portal. Tender Bulletin needs to be published once every week.
Details to be mentioned in the notice inviting tenders:
- The name and address of the procuring entity and the designation and address of the Tender Inviting Authority.
- Name of the scheme, project or programme for which the procurement is to be effected.
- The date up to which and places from where the tender documents can be obtained.
- The amount of Earnest Money Deposit (EMD) payable
- The last date and time for receipt of tenders
- The date, time and place for the opening of tenders received.
- Any other information the Tender Inviting Authority considers relevant.
Step 2: Publish in the Tamil Nadu Tenders web portal
After advertising the tender in the Tender Bulletin, the same has to be published in the Tamil Nadu government’s e-Tender web portal. The tenders uploaded here are listed as per the published date. Notably, the tenders cannot be published in the e-Tender web portal unless it is first published in the Tender Bulletin.
The following is an example of the tender details in the e-Tenders website for a community hall in Chennai corporation.
The details that have to be noted while reading through the tender website include the tender ID, open/closed tender, tender documents, tender notice, the Earnest Money Deposit (EMD) amount (which is usually 1% of the total tender value), important dates and Bill of Quantity ( BOQ).
The BOQ is an Excel file with the detailed estimates of the different aspects of the tender. It is also reused as a financial bid document by the contractors to fill in the details and upload to the corporation website.
Work above Rs 5 lakhs usually goes through the tender process in Chennai. Details of all tenders above Rs 50 crores need to be published in trade journals and tenders over Rs 50 lakhs need to be published in newspapers.
“The number of trade journals/ newspapers and the languages in which it has to be published depends on the value of the tenders,” says Prashanth.
Step 3: Acceptance of Applications
Applications are then accepted from the contractors from the bid publication date to the bid submission end date through the e-portal. This period gives the window for the contractors to participate in the tender.
Tenders need to be open for a minimum period of 15 days on the e-Tender website, while tenders with a value above Rs 2 crores need to be open for at least 30 days.
“It is not easy for the contractors to ascertain the cost estimate of the project. They have to do a detailed market study before bidding. To enable a transparent tendering process, sufficient time has to be given for them,” points out Prashanth.
“After the bid submission end date, even the file links of the tender documents will be removed from the websites. It will no more be available for public view,” he adds.
Step 4: Opening of bids
After closing the receipt of bids for the tender, the bids are opened on the announced date and the winner is awarded the contract. Later, the work order is issued by the Corporation to the contractor.
Contractors’ experience bidding on tenders for civic work
The contractors are classified into different grades based on various criteria like the years of experience, technical capacity (machinery and manpower), financial capacity, and values of projects executed so far (the higher the number of high-value projects taken up, the higher the grade) and the number of government projects completed.
Small contractors are eliminated by introducing last-minute clauses in tenders such as mandating contractors own high-end machinery or citing certain financial capacities.
“This enables only a particular vendor to be eligible even for participation in the tender. In other cases, when there is a delay in releasing the bill amounts, the small contractors who take up loans are made to suffer financially,” says a Chennai-based contractor who has been involved in work on stormwater drains in the city.
The contractor suggests that high value projects can be broken into several small packages for tendering. This will ensure faster execution of work and also benefit the small contractors in the process.
Another contractor who has worked with the civic body says that it takes at least three months for the GCC to release the amounts for a bill, making operations difficult.
“Besides, it takes years to get the amount for the final bill. For instance, if the tender value is Rs 1 crore and the pre-final bill has a value of Rs 95 lakhs, the last bill worth Rs 5 lakhs will be withheld citing a review of drawbacks. However, the contractors understand that the amount will not be credited and so they do not try to get it back in most cases,” he adds.
“The e-Tender process was made to ensure transparency. It is mandatory for the contractor to pay the EMD amount through online mode to take part in the bidding. However, the EMD amount of those contractors who lose the bids is not returned to them through online mode. Rather, they are made to visit the Corporation office in person to get back the amount. This paves way for corruption,” says Prashanth.
Greater transparency in tendering process necessary
Soon after the bidding date is closed, the tender details are removed from the GCC’s website. “There is no law that says those details have to be removed. Those details have to be made available for public knowledge,” says Prashanth, adding that the tender documents are being archived by Arappor Iyakkam in their web portal.
Radhakrishnan points out that while the details of opening and closing the tenders are made available online, other information like details of all the applicants, their technical capacity and eligibility, and the basis on which the tender was awarded to a particular contractor should also be made available to the public.
“There are provisions to upload such details on the website. However, the Corporation continues to maintain the status of the projects as ‘work in progress’ even for those projects that were completed months ago,” says Radhakrishnan.
“After the tender process was made online completely, transparency has been ensured to some extent. However, taking such tender process to the public knowledge is the need of the hour,” says Radhakrishnan.
“To achieve this, announcements on the works to be executed and the name and details of the contractor who has been awarded the contract has to be communicated to the residents,” says Radhakrishnan. “Such details should be discussed with the public during the Area Sabha meetings and public review on the undergoing civic works should also be taken into account.”
A transparent tender process will not only ensure an eligible contractor takes up civic work but also provides no room for corruption.
When more information on the process and the contractor entrusted with the work is made available to the general public, they will be able to better understand the scope of the civic work to be carried out. This in turn will aid them in monitoring the quality of work carried out and ensure that the contractors deliver on the commitment.