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Tendering process: Learning the ropes

The past few years have been a learning experience for the industry and government departments in tendering and bidding for major mission mode projects in the country as they now mature towards floating RFPs

Riding the crest of high GDP growth, India announced several mission mode projects of national importance during the XI Five Year Plan (2007-2012) mandating the use of geospatial technology in some. After the initial euphoria, government departments, which spearheaded these projects, found themselves caught unawares. As several big-ticket projects mandated the use of geospatial technology for the first time in the country, there was no precedence in adapting to the technology. Survey of India (SoI), the official in-charge of surveying and mapping in the country, was wrest with the responsibility of implementing several projects. With exponential increase in demand for surveying and mapping activities, outsourcing became inevitable as SoI could no longer deliver all the tasks independently. An industry, which was content with delivering services to the rest of the world thus far, was suddenly flush with domestic projects.

One of the options exercised universally to execute a project is to get a price specification and go for the lowest priced vendor (L1). This is used in majority of cases in India but unfortunately is not the right fit for buying technology and technical services. As the procurement processes in the geospatial domain have not matured yet, several challenges arose in tendering and procurement. These included defining the objectives of the project clearly, establishing the technical and financial entitlement of vendors, defining the responsibility matrix and setting realistic timelines, to just name a few. It “felt almost like an exercise in conflict management,” says a government source.

The experience of Delhi State Spatial Data Infrastructure project (DSSDI, the first major project in the country, worth Rs 1.25 billion) has taught several lessons. Subsequent projects, like the Rs 1.25-billion Integrated Coastal Zone Management saw maturity at various levels. Procurement manuals were created as the project involved several procurements. Ambiguity regarding the responsibility matrix, technical requirements and type of tendering to opt for were resolved. Even at the start and during the project, quick decisions were enabled and the projects incorporated a lot of flexibility. However, the lessons learnt are not uniform across the projects and several challenges still abound.

Setting expectations
Often, the expectations of the users/vendees of projects are not enumerated with clarity in the Request for Proposal. Lack of precedents, limited understanding of technology and experience of utilising the same has posed a challenge. The classic case is the National Land Records Modernisation Programme (NLRMP). Some industry quarters believe that the government/stakeholders did not exactly know what the outcomes from the NLRMP programme should be. In some states, the objectives and the time period were not defined clearly, leading to confusion. There were instances where such ambiguity led to litigation.

“In about 90% of the projects, there are some loopholes and outcomes are not defined very well,” says Rajesh Alla, President & CEO, IIC Technologies. “The question is how far one can let that go on. It is often important to educate the government users. The onus is on the industry and it requires commitment from the industry,” he says.

However, having learnt from the initial mistakes, many projects subsequently ironed out such challenges. Enumerating how the Department of Land Resources (DoLR), the nodal agency for the NLRMP programme, resolved the issue, Charanjit Singh, Director, says, “We have created a committee of senior officers who understand this field to help us in enumerating the objectives right.” The department decided to divide the work because one vendor cannot deliver all the tasks. “We then studied all the RFPs, selected a few model RFPs and put them on the DoLR website for the benefit of all state governments,” he adds.

Another recommendation that has come forth is having a consultant who can guide the project team to the right technology specifications. The Association of Geospatial Industries (AGI) is ready to take on such a role.

Of pilots and slices
Several mission mode projects that stipulate the use of geospatial technology are large, and the tendering process cumbersome. Often, the buyers know what they want but sometimes RFPs are a mix and match. “RFPs mix a lot of things. No one comes to concurrence and no one bids for it,” says Pankaj Gupta, Head-GIS Data Collection, TUFS&MCS, Business Development, Trimble India. According to him, the best approach is to do one or two pilots before the major project, assess and vet the technology. “It is good to have an empanelled set of companies, come up with a limited RFP instead of an open RFP,” he recommends.

A few programmes in the country have already taken that route. In the case of NLRMP, some states have done pilots and moved on to floating RFPs for the larger part. “The programme is already in the fourth year. States have been successful in setting the practices. We have made very detailed guidelines for the implementation of the programme,” avers Singh. Almost all the projects currently underway in the country are massive in scale. For example, the ICZM covers 70,000 sq km of aerial flying. Since the government was of the opinion that no single vendor can deliver projects of this scale in stipulated time, they have been sliced. “This ensured that timelines are met and quality is not compromised,” says a Survey of India source.

Empanelled vendors
One recommendation put forth by the industry to streamline the tendering process is to have a list of empanelled vendors. For example, NRSC has a list of empanelled vendors and they have a set price for each of the tasks. Based on this, NRSC awards contracts. The R-APDRP project has taken a similar approach but it faced several challenges. Rajesh C Mathur, Vice Chairman, NIIT GIS says, “We started with the right approach of empanelling the vendors and making sure that only they are allowed to bid. However, there were many who should not have been empanelled and they started quoting crazy prices just to bag the deal. We need more stringent norms for companies to qualify for empanelment.”

A approach to save the projects from being bid by vendors with insufficient domain knowledge is to adopt weighted evaluation of bids. Of late, many projects are taking this route, giving weightage to technical competence, commercial aspects and based on these, arrive at the derived L1. “This way, a vendor may not be the cheapest, but value for money is ensured,” says Mathur. Voicing similar sentiments, Alla says, “There is no one medicine for the problem. Each scenario needs a different approach. Quality- based selection is very important; technical proficiency and price is another alternative.”

Unrealistic timelines
Many projects in India have unrealistic timelines. For example, a project stipulated mapping of the entire state in 15 months. Multi-crore projects like R-APDRP have been colossal failures because of such riders. This is because of the rigidity in terms of deliverables, pricing and as a result a few well known geospatial companies have almost gone bankrupt. “Projects need to have healthy clauses. Only then can the industry remain healthy and profitability maintained,” an industry insider says.

Partner for win-win situation
For mission-critical projects, only partnership process works and not L1, according to the spokesperson of a leading geospatial services company. In this, the buyer considers the vendor as a partner with an obligation to fulfil the objectives of the project in the long run and share the returns/benefits. “RFP should stand for Request for Partnership and not Request for Proposal. This ensures a win-win situation in the long run”, he adds.

Charanjit Singh agrees that state governments can’t accomplish the NLRMP project on their own. They have to go for either PPP mode or completely outsource the project. “Some revenue- sharing models need to be developed. For example, if a vendor computerises the existing land records, we need to evolve a revenue model where the vendor gets some money and some portion goes to the government. Such models can be worked out on a sustainable basis,” he adds.

Policy tangle
Though the tendering process is maturing, several projects still face constraints vis-a-vis policy related to security. For example, there is no timeframe in India in which clearances for aerial flying will be given. Until the policy is crystal clear, there is an environment of uncertainty around geospatial projects. If security is a concern, every project needs to be cleared in the first stage itself so that there is no air of uncertainty and the timelines can be clearly set, say both industry and users.

Learning from the experiences of tendering and bidding for major mission mode projects in the country in the past few years, the industry and the government departments are refining the tendering processes and are maturing in floating RFPs. However, a lot needs to be done to streamline the process and ensure that geospatial projects are completed in an environment of clarity and certainty, contributing to the confidence and belief of the government users on the credibility and efficacy of geospatial technology.

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