CAG finds 1,291 tenders awarded above lowest bid in West Bengal

This audit examined the compliance of the Government of West Bengal, specifically focusing on e-Procurement systems in the Finance, Public Works, and Public Health Engineering Departments, and the implementation of tourism facility upgradation schemes by the Tourism Department for the period ended 31 March 2023.

Who it concerns: Government of West Bengal (Finance Department, Public Works Department, Public Health Engineering Department, Tourism Department, and other departments listed in the report)

What the auditor found

• Absence of a Memorandum of Understanding (MoU) or Service Level Agreement (SLA) for the e-Procurement system, leading to unclear roles and inability to fix responsibility for delays.
• As of 31 March 2023, the Parliamentary Affairs Department, 18 Public Sector Undertakings (PSUs), and 68 Autonomous bodies had not registered with the e-Procurement portal.
• The 'Negotiation' sub-module was not implemented in the e-Procurement system, forcing offline processes and leaving no digital trail of negotiations.
• Instances of splitting works to avoid mandatory online tendering, creating risks of undue benefits to favored contractors.
• 139 tenders were issued by non-designated Tender Inviting Authorities (TIA) in four divisions, indicating control deficiencies.
• 67 instances of bid documents being uploaded using expired Digital Signature Certificates (DSCs) between 2018-19 and 2022-23.
• Minimum bid submission time was not enforced by the system in 4,012 out of 90,928 tenders published by PWD and PHED between 2018-19 and 2022-23.
• In 33,614 tenders, there was a discrepancy between the tender value recorded in the system and the total value of the related Bill of Quantities (BoQ).
• The two-bid system was not enforced by the system in 1,247 tenders with values exceeding ₹10 lakh.
• In 1,291 tenders, the awarded contract amount was higher than the lowest (L1) bid.
• The Tourism Department selected areas for development without conducting feasibility studies or having a sustainable operation and maintenance model.
• Recommendations include executing MoUs/SLAs, onboarding all departments/PSUs/autonomous bodies, implementing application controls for PAN verification, bid submission time, and two-bid systems, and mandating the use of the e-Procurement system for contract awards.

Also in the document

• CAG found that in 1,291 tenders, the government awarded contracts for amounts higher than the lowest bid received, indicating potential financial loss or irregularity.
• CAG noted that 4,012 tenders failed to enforce the minimum bid submission time, a systemic control failure in the e-Procurement system.
• CAG reported that 68 autonomous bodies and 18 PSUs were not registered on the mandatory e-Procurement portal as of March 2023.