Lowest bidder denied Rs610m road project

ISLAMABAD: A road construction project from Muzaffarabad to Pir Chanasi (Azad Kashmir) worth Rs610 million has been dubiously awarded to a favorite contractor while the lowest bidder has been made to pay the price for quoting low rates for a government project.
AJK Council advertised the project of constructing 23 km road from Muzaffarabad to Pir Chanasi (a hilly resort) but the lowest bidder has not been awarded the contract, which has raised many eyebrows. The lowest bidder has already challenged the award of contract in the respective high court. As per the quoted rates, Sardar Ilyas Alam Construction Company quoted Rs532.157 million while the second lowest bidder, Progressive Construction Company, quoted Rs539.148 million but has been awarded the contract.
Transparency International has already condemned the trick played to award the contract to the favourite contractor, as Public Procurement Rules do not contain any such clause. In Khyber-Pakhtunkhwa the government in January 2014 issued a letter that the contractors who quote rates below 10% of the government’s quoted rate will have to submit an equal amount (the percent below the bench mark) as guarantee to the government which is returned at the end of completion of the work and satisfaction of the government. However, the lowest bidder (quoting below 10% rates) is not disqualified but is only asked to submit bank guarantee.
But in AJK Council’s case, the lowest bidder has been disqualified. The AJK Council had placed a clause in the tender that no contractor can file rates below 10% of the quoted rate and the lowest bidder quoted 11 % below the quoted rates, said the concerned official of AJK Council when contacted by The News. The superintendent engineer of AJK Council Nadeemuddin while explaining to The News mentioned that both in Khyber-Pakhtunkhwa government and AJK a rule is followed that no one can quote very low rates to win a tender because it affects the quality of the work and such practice also defies pooling among the contractors to win a project. “In the case at hand, the lowest bidder got disqualified for quoting below 10 % rates of the quoted rates while the company which has won the tender quoted the rates at 9.9 % below therefore it has been awarded the project”, he said adding the lowest bidder also did not quote rates of one item which means he was willing to do it for free and that must have been the reason for crossing the base price set by the AJK Council.
On the other hand, Syed Adil Gilani, consultant Transparency International while talking to The News said that KPK government initiated this practice which Transparency International opposed, as PPRA Rules do not allow such practices because quoting a low rate is in favour of the government. He said that Transparency had pointed it out to the KPK government who were willing to abolish such illegal practices. While a senior official of ministry of housing and works told this correspondent that setting a bench mark of not accepting any tender which quotes rates less than 10 % means the government wants to carry out work at higher costs which only benefits the contractor. “If any contractor quotes low rates and does not fulfill the required quality criterion he can be blacklisted but the government must not interfere in someone’s willingness to do a work for less money”. The senior official said that the lowest bidder cannot be disqualified for quoting low rates but the practice was that he had to submit the corresponding amount to the government as guarantee. The lowest bidder has gone to the court as well.