Vigilance Awareness-for tackling corruption

and deficit in governance

PRESENTATION
BY
M.P.JUNEJA
Former
ADDITIONAL MEMBER
RAILWAY BOARD
&
EX-CTE/CVC
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 CORRUPTION

• In layman’s language corruption is

defined as misuse of official power for
personal benefits.

• By TI (Transparency International)
Corruption is operationally defined as
the misuse of entrusted power for
private gain.

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 GOVERNANCE
• Exercise of political authority and use of
institutional resources to manage society’s
problems and affairs (WB).
• Use of power and authority by the govt. to
realize people’s aspirations.
• Laws, procedures & practices that determine
the co’s ability to take decisions in the interest
of stakeholders.
 Corruption and Governance
• Root cause of poor/deficit in governance lies
in corruption.
• Bane of the society
• One of the most corrupt – as per TI
• Poor governance in Govt. organizations affects
the productivity, efficiency and image of the
org.
 EFFECTS OF CORRUPTION:

Corruption affects everybody.

• Its effects are four-fold:
Political Economic
Social Environmental
POLITICAL :
In a democratic system, offices and institutions lose
their legitimacy, when misused for private advantage.
ECONOMIC :
Economically corruption leads to depletion of national
value.

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 EFFECTS OF CORRUPTION:
SOCIAL:
It also damages the social fabric of society. People lose
faith in the political system and its leadership.
ENVIRONMENTAL:
Environmental degradation is another effect of corrupt
system.

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Ethics and Moral Values

• Truthfulness
• Honesty
• Integrity
• Lack of these
corrupts and
corrodes the
society

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Secular and Spiritual

• Highly Religious but

one of the most
corrupt as per
Transparency
International

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 Contradictions

• Compassion vs
Brutality
• Sacred rivers polluted
• Corruption in religious
institutions
• Worship of Women vs
cruelty and neglect

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Reasons for Corruption

• Low risk High profit

activity
• Lack of
Transparency and
accountability
• Red –tapism
• Black money trap
• Patronage-system
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 VIGILANCE
• Watchfulness-Oxford
• Every officer is vig. Officer for his area of
jurisdiction.
• Not a police function.
• Friendly critic and part of the management.
• Punitive vs preventive vigilance.
 Preventive Vigilance
• Prevention is better than cure
• Check systems which breed corruption
• Delay in decision making
• Sensitive Post- identification
• Citizens Charter
• Black mailers vs Whistle blowers
• Role and extensive use of IT

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 Volumes and Challenges
• 25% of GDP -$400b
• Likely to increase manifold with 7-8%GDP
growth
• Need to de-mystify and simplify the
procurement procedures
• Total transparency,equity and fairness
• Maximise the use of IT

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 Main Objectives of PSUs
• To achieve planned targets /output with
optimum utilisation of available resources
• Resources- 3 M’s-Men, Materials, Money
• 3P’s-Productivity, Profit, Planned Growth
• Mismanagement of contracts- results in
leakage of revenue and affects image and
productivity/profitability

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Way -ahead

• Prompt and
Exemplary
Punishment
• Transparency
• E-governance
• Admn.Reforms
• Role-models

Contd.
 Contd.
• Recent initiatives to promote transparency
and accountability
• RTI Act 2005
• Integrity Pact
• Introduction of Lokpal bill.
• Expected reforms – electoral and judicial.
Fear vs greed

• No need to fear-
follow procedures
• Be firm and upright
in conduct
• Be content
• Be vigilant
• Don’t be a part of a
herd
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 MAJOR AREAS OF CORRUPTION:
• Over centralization of power, non transparency
in government functions and lack of
accountability are the major reasons of
corruption.
• Areas are:
i. Works Contract
ii. Supply Contracts
iii. Services to internal customers
iv. Services to external customers

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 ROLE OF CVC / CTE
• Organization
• Status
• Jurisdiction
• Inspections and
Follow-up
CVO’s to conduct CTE type inspections.
 CVC Guidelines-on contracts
• Use of IT- transparency
• Eligibility criterion
• Sufficient time
• No changes/amendments- post facto
• Negotiations-only with L1
• Non restrictive & non discriminatory bidding

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 GUIDELINES OF CVC TO CURB
CORRUPTION
• CVC guidelines for curbing corruption are
available in official site of CVC i.e.
www.cvc.nic.in
• One of the major circulars by CVC to curb
corruption is on banning negotiations with
firms other than L-1. Circular dated
18.11.1998.
CVC letters\181198 nego.pdf

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 PURCHASE

Two Categories:
 Govt. Purchase
 Non-Govt Purchase

Govt. Purchase is otherwise called public buying

or Public Procurement.

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 PUBLIC BUYING DEFINITION

Covers the procurement of

MATERIALS/WORKS/SERVICES by all
government ministries, departments, public
sector undertakings under the Central Govt. and
the States, Municipal Corporations and other
agencies using public fund.

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 CARDINAL PRINCIPLES
OF PUBLIC BUYING

TO PROCURE MATERIALS/ WORKS/ SERVICES OF THE

SPECIFIED QUALITY WITHIN THE SPECIFIED TIME AT THE
MOST COMPETITIVE PRICES IN A FAIR, JUST &
TRANSPARENT MANNER.

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 Principles of Public Buying.
(As per GFR-2005)
1. Efficiency, Economy,
Transparency, Fairness &
Equitability and Competition
in Procurement.
2. Clear and complete
specifications in the tenders
free of any ambiguity,
deficiency
3. Correct Quantity Estimations.
4. Well publicised tendering
and bidding procedures.
5. Well recorded deliberations
in decision making- No
arbitrariness .

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Contd.. 26
 DEFICIENCIES IN
PUBLIC BUYING
CAUSES
• NO MANUAL/ OUTDATED MANUAL

• LACK OF STANDARDISATION IN CONTRACT

CONDITIONS, SPECIFICATIONS etc.
• LACK OF KNOWLEDGE IN EXECUTIVES OF THE PUBLIC
PROCUREMENT PROCESS
• CASUAL APPROACH

• MALAFIDE INTENTIONS

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 PREVENTIVE MEASURSES
SUGGESTED
• GENERAL
1. GET THE MANUAL UPDATED SUITING TO THE
REQUIREMENT OF FAST TRACK PROJECTS, IF
REQUIRED (PREPARE FAST TRACK PROCEDURE).

2. ARRANGE ADEQUATE TRAINING TO TECHNICAL

STAFF TO SENSITISE THEM TO GOOD
CONSTRUCTION PRACTICES / CONTRACT
MANAGEMENT ETC.

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 PREVENTIVE MEASURES
IN THE ORGANISATION

• Proper manual.
• Uniform procedure through out organization
• Dedicated organization. i.e. manned by professionals of
fixed tenures so that accountability can be fixed.
• Transparent & open system.
• Smoother & faster decision.
• Training
• Rotation of sensitive posts.
• Extensive use of IT-E-procurement.
Contd..
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 PREVENTIVE MEASURES
• Examine the existing organisation
• Regular inspections & surprise visits
• Identify sensitive posts/points
• List of officers of doubtful integrity
• Blacklisting of unscruplous contractors
• Conduct rules, Complaint redressal
• Cut delays,simplify procedures
 PREVENTIVE MEASURES
IN PUBLIC BUYING
STAGES IN PUBLIC BUYING

1. PRE-TENDER STAGE
2. TENDER STAGE
3. TENDER FINALISATION STAGE
4. POST TENDER STAGE

Contd..
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 PREVENTIVE MEASURES
IN PUBLIC BUYING
1. PRE-TENDER STAGE
i.Estimation of requirements and financial sanction / Project
Formulation, Appointment of Consultants.
• Check on Excess/Inflated, Artificial generation of demand
ii. QUANTITY REVIEW / DPR, Estimates / Design etc.
 Annual provisioning of items having constant demand.
 Zero based budgeting.
 Associating user in quantity review.
 Clubbing of demands for non-standard items.

TODAY’s PROBLEMS ARE DUE TO

YESTERDAY’S SHORT-SIGHTED SOLUTIONS
Contd.. 32
 APPOINTMENT OF
CONSULTANT
 Transparent selection through tendering.
 Fair opportunity to all.
 Clear evaluation criteria.
 Consultant is just an expert adviser and should
not be the decision maker.
 Executive should not escape his responsibilities
taking the cover of consultant.

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 PREVENTIVE MEASURES
IN PUBLIC BUYING
2. TENDER STAGE
(i) TENDER DOCUMENT:-
 Unambiguous, complete & easily understandable.
 Prequalification Criteria
 Specification: Functional based.
 Neither too rigid nor too sketchy.
 Specification & size of general items should be standard .
(ii) INVITING & OPENING OF TENDERS:
 Best form of tendering like GT, AT, BT & sometimes LT.
 Non acceptance of late/delayed tenders.
 Opening in Public.
 Non acceptance of any change from firms during tender
opening
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 PREVENTIVE MEASURES
IN PUBLIC BUYING
3. TENDER FINALISATION STAGE
 Evaluation Procedure: To be transparent.
 Check for reasonableness of rate and other evaluation criteria
including Delivery period
 Proper distribution of quantity among firms in the zone of
consideration
 Recording convincing reasons for passing over cheaper offers
 Avoid single quotation against Limited tender
 Negotiations with L-1 that too as an exception to rule
 Non acceptance of major deviation with financial implications
after tender opening
 Non acceptance of corrections in the offer without attestation
by tender opening officials

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 PREVENTIVE MEASURES
IN PUBLIC BUYING
 TENDER FINALISATION STAGE Contd.
 Non acceptance of conditional discount.
 Finalization within validity.
 Contract to be issued as per the firm’s offer- so that it is legally
binding.
 Ensure agreement is signed and sealed properly in time.
4. POST TENDER STAGE
 Monitoring contract execution.
 Ideally no amendment after contract.
 Avoiding granting extention of DP in routine manner.
 Independent confirmation of BG by bank & monitoring its validity.
 Be vigilant for request for change in inspection clause, place of
delivery, payment conditions, etc.

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 PREVENTIVE MEASURES
IN PUBLIC BUYING
4. POST TENDER STAGE contd.

i. Ensure that payment made is commensurate

with the quantum of work done.
ii. Ensure recoveries as per the contract.
iii. Maintain proper record of hindrances.
iv. All the conditions of contract are satisfied.
v. Be vigilant about payment on PVC (Price
Variation Clause) account.
vi. If there is any performance guarantee clause
see that same is complied with.
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 Continued:
vii. Time and Cost over-runs to be avoided and
penal clauses enforced as per the contract.
viii. Watch deviations especially in abnormally high
rated and high value items.
ix. Carry out all mandatory tests and maintain
proper records.
x. Ensure compliance of conditions regarding
licenses ,insurance policies and deployment of
technical staff.
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