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90% procurements of BEL made through single vendors: CAG
Observing that 90% of the total procurement of Bharat Electronics Limited (BEL) was made through single vendors during the last three years, a CAG report has said that a thin vendor base was "impairing" its ability to obtain competitive rates.
Observing that 90% of the total procurement of Bharat Electronics Limited (BEL) was made through single vendors during the last three years, a CAG report has said that a thin vendor base was "impairing" its ability to obtain competitive rates.
The country's top auditor pointed out that the BEL has two overseas offices in New York and Singapore for importing materials directly to save money but they were being under-utilised as "meagre quantities" were imported through them.
"During the last three years, almost 90% of the total procurement of the company was made through single vendors and 10% through limited tenders. Open tenders were negligible," it said.
The CAG said that the vendor base of the company was unit-specific and not being shared while inviting quotations.
"This deprived the company from reaping benefits of competitive prices particularly when its vendor base was thin," it said. The report said there were delays in placement of purchase orders which resulted in considerable delays in inspections and consequent return of rejected materials.
Commenting on the cost reduction measures taken by the firm, the auditor remarked that "indigenisation, which was the main measure, was not very successful as is evident from the fact that value of purchase orders placed on foreign vendors increased from 48% in 2007-08 to 68% in 2009-10."
It said the Ministry has accepted all recommendations and the company has been advised to find solutions for the problems highlighted in the report.
