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http://www.sunday-guardian.com/news/us-company-favoured-over-india-in-boat-deal
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.
.
The Ministry of Home Affairs (MHA) has flouted
all procurement rules to nominate a US boat
building company for the purpose of buying 150
coastal security boats. The global tender launched
for this Rs 500 cr deal kept out all Indian players
by introducing clauses that are difficult to be
fulfilled by them. Moreover, some of the
equipment requirements mentioned in the tender
are not needed by the Marine Police Organisation,
which will use the boats.
The Request for Proposal (that is the tender),
which is on the MHA website, shows (Page 103,
para 2.1.6) that the US Arneson's "surface piercing
drive" has been nominated for the deal. Further,
under "Routine Maintenance", the model
"Arneson Drive, model ASD 14" is mentioned on
page 67.
The Marine Police Organisation was formed post
the 26/11 terror attack. A fleet of around 280 boats
was sanctioned for it for the purpose of patrolling
and guarding India's vast coastline. The first order
of 120 boats went to the Defence Public Sector
Units (DPSUs) -- the Goa Shipyard Limited (GSL)
and the Kolkata-based Garden Reach Shipbuilders
Engineers (GRSE). These boats were delivered
two years ago and have been performing well.
Recently, the tender for another 150 boats was
floated globally. Indian as well as global
manufacturers participated in the bidding
process.
Sources say that the propulsion system
mentioned in the tender is not required by the
Marine Police Organisation as it will not be able to
exploit and maintain such complicated
equipment. Indian Navy is already facing a
number of problems because of this equipment
fitted on its Fast Attack Crafts. A regular fixed pitch
propeller system is best suited for the Marine
Police.
The speed requirement in the latest tender has
also been revised from the earlier tender's "high
speed" to a maximum of 25 knots. Sources said
that the system nominated by the MHA has a
cruising speed of 12 knots and a maximum speed
of 25 knots. India does not need such a high
speed boat when the job can be done by a boat
with a lower speed.
Another clause that keeps out Indian
manufacturers is the earnest money deposit
(EMD) clause in Para 2.11 of Schedule 1. It states
that the EMD requirement is Rs 7.5 cr. The annual
turnover requirement for the company that will
get the contract is Rs 50 cr in the last three years,
making it Rs 150 cr in the past three years. A
source told this newspaper, "Clearly no Indian
boat builder, who makes boats of this type, can
qualify. In addition, the requirement of having
built at least 25 boats in one year in the past three
years may even disqualify public sector yards like
GSL and GRSE, who have set up significant
infrastructure and built the previous series of
boast for the MHA (Phase-1 boats)."
All this amounts to a single vendor nomination,
which as per procurement procedures of security
equipment is not acceptable, and has in the past
resulted in retraction of tenders.
When The Sunday Guardian contacted MHA
officials, they said that the ministry had held a
pre-bid conference in November, in which it
sought the views of the manufacturers. These
views are under consideration and if needed the
RFP would be amended. The officials said that a
level playing field for Indian manufacturers would
be considered by introducing changes in the
tender before it expires. The last date for the RFP
is 16 January 2012. The MHA follows the
procurement manual Directorate General of
Supplies and Disposal (DGS&D), for all its
purchases. 15 boat manufacturers attended the
pre-bid conference in November.
According to sources, GRSE and GSL officials met
Home Minister P. Chidambaram recently to say
that since they had won the first contract and had
delivered the boats, they should be given the
second contract too.
The tender also combines the vessel order along
with annual maintenance contract (AMC). AMC
contracts are usually tendered out separately to
service providers suited best for such jobs.
.
.
.
The Ministry of Home Affairs (MHA) has flouted
all procurement rules to nominate a US boat
building company for the purpose of buying 150
coastal security boats. The global tender launched
for this Rs 500 cr deal kept out all Indian players
by introducing clauses that are difficult to be
fulfilled by them. Moreover, some of the
equipment requirements mentioned in the tender
are not needed by the Marine Police Organisation,
which will use the boats.
The Request for Proposal (that is the tender),
which is on the MHA website, shows (Page 103,
para 2.1.6) that the US Arneson's "surface piercing
drive" has been nominated for the deal. Further,
under "Routine Maintenance", the model
"Arneson Drive, model ASD 14" is mentioned on
page 67.
The Marine Police Organisation was formed post
the 26/11 terror attack. A fleet of around 280 boats
was sanctioned for it for the purpose of patrolling
and guarding India's vast coastline. The first order
of 120 boats went to the Defence Public Sector
Units (DPSUs) -- the Goa Shipyard Limited (GSL)
and the Kolkata-based Garden Reach Shipbuilders
Engineers (GRSE). These boats were delivered
two years ago and have been performing well.
Recently, the tender for another 150 boats was
floated globally. Indian as well as global
manufacturers participated in the bidding
process.
Sources say that the propulsion system
mentioned in the tender is not required by the
Marine Police Organisation as it will not be able to
exploit and maintain such complicated
equipment. Indian Navy is already facing a
number of problems because of this equipment
fitted on its Fast Attack Crafts. A regular fixed pitch
propeller system is best suited for the Marine
Police.
The speed requirement in the latest tender has
also been revised from the earlier tender's "high
speed" to a maximum of 25 knots. Sources said
that the system nominated by the MHA has a
cruising speed of 12 knots and a maximum speed
of 25 knots. India does not need such a high
speed boat when the job can be done by a boat
with a lower speed.
Another clause that keeps out Indian
manufacturers is the earnest money deposit
(EMD) clause in Para 2.11 of Schedule 1. It states
that the EMD requirement is Rs 7.5 cr. The annual
turnover requirement for the company that will
get the contract is Rs 50 cr in the last three years,
making it Rs 150 cr in the past three years. A
source told this newspaper, "Clearly no Indian
boat builder, who makes boats of this type, can
qualify. In addition, the requirement of having
built at least 25 boats in one year in the past three
years may even disqualify public sector yards like
GSL and GRSE, who have set up significant
infrastructure and built the previous series of
boast for the MHA (Phase-1 boats)."
All this amounts to a single vendor nomination,
which as per procurement procedures of security
equipment is not acceptable, and has in the past
resulted in retraction of tenders.
When The Sunday Guardian contacted MHA
officials, they said that the ministry had held a
pre-bid conference in November, in which it
sought the views of the manufacturers. These
views are under consideration and if needed the
RFP would be amended. The officials said that a
level playing field for Indian manufacturers would
be considered by introducing changes in the
tender before it expires. The last date for the RFP
is 16 January 2012. The MHA follows the
procurement manual Directorate General of
Supplies and Disposal (DGS&D), for all its
purchases. 15 boat manufacturers attended the
pre-bid conference in November.
According to sources, GRSE and GSL officials met
Home Minister P. Chidambaram recently to say
that since they had won the first contract and had
delivered the boats, they should be given the
second contract too.
The tender also combines the vessel order along
with annual maintenance contract (AMC). AMC
contracts are usually tendered out separately to
service providers suited best for such jobs.
