Suppliers make a killing through high-procurement items

Offering certain items almost free of cost in order to bag government tenders, suppliers have been making a killing through other items supplied in huge volumes to government offices.

A study of a list of items provided by some suppliers to government ministries shows that suppliers provide less frequently used items almost free of cost but sell other items supplied in large quantities at exorbitant rates.

“Some items are offered for as low as Re 1 per piece,” a supplier said. “But the same supplier sells other items supplied in large quantities at prices significantly higher than the normal market price. This is how they earn a lot.”

For instance, the Ministry of Health and Population (MoHP) has bought diary at Re 1 per piece, but has bought 20 dozens of ordinary pens at Rs 210 per unit. The ministry bought HP laser 13A toner per unit at Re 1, at first from Marketing Lines and the same supplier sold the same item at Rs 9,500 per unit in December 2014.

Secretary at the Public Procurement Monitoring Office (PPMO) Tanka Mani Sharma claimed that the tricks employed by suppliers do not increase government expenses. “We are aware of these tricks but then the ministries are not allowed to exceed their budget for procurement of goods,” Sharma told Republica.

Asked about such practices, Secretary at the National Vigilance Center Ramesh Kumar Sharma, however, refused to accept that the suppliers provide goods at a loss. “I do not believe that suppliers provide goods for Re 1. After I read the newspaper today, I have decided to investigate the case,” Sharma said on Monday. Republica published a list of various goods that the Ministry of Home Affairs and Ministry of Health and Population procure at the rate of Re 1 per unit.

Suppliers believe that there are loopholes in the Public Procurement Act.

Navin Chaulagain, chairman of the suppliers association claimed that the suppliers take advantage of the generalized provision of the Act. However, Sharma ruled out the claim. “The prices of items taken individually may show vast disparities. But there is no big difference in the overall prices of goods procured,” he claimed.

Source: Republica