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PSUs losing out on best possible service providers: mjunction ltd

mjunction has bagged contracts for e-auction of telecom spectrum for the Department of Telecommunications, e-bidding of oil and gas blocks and more recently, contracts to deploy its e-procurement system at Ordnance Factory Board under the Ministry of Defence and also for all departments of the Government of Bihar – all through open bidding.

ET Bureau|
Nov 25, 2019, 03.58 PM IST
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The government and public sector units (PSUs) are losing out on the best possible service provider both technically as well as financially, due to the practice of awarding contracts on nomination basis, mjunction ltd, a 50:50 joint venture between Tata Steel and Steel Authority of India Limited, has said.

Vinaya Varma, mjunction MD & CEO said: “Competent and experienced organisations are losing out on a level-playing field in the absence of open tenders. I seek open tenders based on fair competition and equity.” While mjunction has won several government contracts for conduct of e-auction of national interest whenever there has been an open tender, it has lost out on that opportunity whenever the stipulation of calling for open tenders has been overlooked,” he added.

A landmark Supreme Court judgment of 2006 made issuing of open tenders mandatory for awarding of PSU and government contracts. However, at a time when the government is focused on transparency and efficiency, this judgment is being routinely flouted, mjunction said in an official statement, adding “even the Central Vigilance Commission (CVC) norms are being overlooked by some PSUs and contracts are being awarded on nomination basis.”

mjunction has bagged contracts for e-auction of telecom spectrum for the Department of Telecommunications, e-bidding of oil and gas blocks and more recently, contracts to deploy its e-procurement system at Ordnance Factory Board under the Ministry of Defence and also for all departments of the Government of Bihar – all through open bidding. The GFR (General Financial Rules) 2017 provides for procurement of non-consulting services by nomination only in exceptional situations. The CVC circular also provides for nomination basis in exceptional circumstances, the statement said. “However, it is being routinely exercised by ministries in the Government of India to award contracts on a nomination basis. This is going against all principles of equal opportunity, competition and fairness,” Varma remarked. He pointed out the practice of awarding contracts through nomination also violates The Competition Act, 2002, as it directly or indirectly results in eliminating or reducing competition.
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