Sunday, July 26, 2009

CAG finds ordnance rot runs deep


Scams in defence purchases may not be new, but the scale that they have assumed and the audacity of tainted officials is something the government's official auditor CAG is particularly looking at as it has started reviewing all procurements made during the tenure of Sudipta Ghosh, former Ordnance Factory Board (OFB) chairman. In an examination of 18 contracts between 2003 and 2006, CAG had found that in 16 cases single bidders were left in the fray at the final stage during pre-qualification of bids after trials. And in the remaining six instances, there were only two bidders each, thus defeating the very concept of competitive bidding. The contracts pertained to acquisition of explosive detector, thermal imaging, binoculars for troops, air target imitators, combat diving equipment, remotely operated vehicles, helicopter-mounted surveillance system, payload for UAVs, oxygen masks and demining equipment among others. The former OFB chief was recently released on bail after remaining in custody for two months as the investigative agency, CBI, failed to file the chargesheet against him and other accused in the mandatory 60-day period. Ghosh was chairman of OFB from January 2007 to April 2009. He was arrested by the CBI that registered a case on May 18 in Kolkata alleging that he alongwith other co-accused accepted bribes from foreign firms in defence purchases. Prior to his appointment as the chairman, Ghosh was member of the OFB in charge of material management which primarily deals with procurements. A senior CAG official said the OFB did not follow any standard procedures in conducting market survey before going in for any capital acquisition for the defence services. “It had no system of evaluating vendors or any information on the past performance of prospective suppliers,” a CAG audit pointed out. For instance, in the purchase of helicopter-mounted surveillance system, the auditors found that the OFB chairman included a vendor in midst of a bidding process, when the vendor in question had not even been issued a request for proposal. It also found that this was done at a stage when other participants had already made their techno commercial offers.

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