A quasi-judicial probe panel found that Nepal Army had unlawfully awarded Kathmandu-based Muktinath Trade Concern a tender to supply Eicher generators worth Rs 97.8 million.
KATHMANDU, OCT 19: After a month-long quasi-judicial probe found Nepal Army to have violated standard procurement norms in awarding a contract for the supply of generators for its United Nations mission, the Supreme Court on Wednesday issued a stay order to the army to stop the procurement, which is worth Rs 97.8 million.
Responding to a writ petition filed by Elemec International, one of eight firms which participated in the bidding, a single bench of Justice Cholendra Shumsher Rana directed NA to halt the purchase deal until further notice.
Justice Rana further issued a show cause notice to NA, the main defendant in the case.
On August 2, NA had handpicked Kathmandu-based Muktinath Trade Concern to supply Eicher generators worth Rs 97.8 million, for use by its RDL 1 Infantry Battalion.
A week after NA awarded the deal, Jiwan Chand, proprietor of Elemec International, the lowest bidder among the eight firms, had filed a petition at the Public Procurement Monitoring Office (PPMO), demanding a review of the bidding process.
The exiting public procurement law allows an unsatisfied party to file a review petition within a week of the bidding. The petitioner will have to deposit 0.5 percent of the bid amount while filing the petition. The amount will not be returned if the petitioner loses the case.
In his petition, Chand accused NA of rejecting the application of rival bidders once it handpicked Muktinath Trade Concern. This is against the usual practice of awarding the tender to the lowest bidder. The rival bidders were provided the letter of intent (LoI) after expiry of the deadline for filing complaints, according to documents he submitted to PPMO. The LoI issued on July 16 was handed to the rival companies on July 25.
Documents also show that NA headquarters had attached a copy of the LoI to a supply firm named Saugat International that had not even participated in the bidding process. NA also did not even upload the tender notice on its website.
PPMO's review panel, which is a quasi-judicial body, concluded that NA had acted againsts the law in awarding the contract. In a statement issued on September 4, PPMO's review panel directed NA to immediately halt the purchase, saying the procurement agreement was against the spirit of good governance and public accountability.
"Since such kinds of unlawful activity are being repeated, the committee has also decided to write to the CoAS asking that the officials involved act as per the law," reads the statement.
Instead of suspending the procurement, NA paid no attention to the review panel order and expedited the procurement process, according to PPMO officials.
"We are receiving an increasing number of petitions against NA's procurement deals. Most of these petitions were filed after NA refused to take applications for internal review. NA headquarters should take this matter seriously," said a PPMO official.