Systemic Improvement in Execution of Service Contract
7.0 Brief Introduction:
A CTE type examination was carried out by Vigilance Dept. for hiring of Forklifts for material handling in MDL yards and stores.
Requirement for hiring of Forklifts for material handling in MDL yards and stores was raised by SB-Stores, SB-Maintenance Dept. and from East Yard. As per requirement, parallel contract was proposed between two bidders in the ratio of 60:40.
Accordingly, POs were placed in the ratio of 60:40. During examination of execution part, the following lapses and irregularities were observed
(i) User Departments did not carry out proper study before raising their requirement. Which led to shortfalls in quantity.
(ii) TNC was not concluded on time with proper decision.
(iii) There was scope for modification in the indicated scope of work.
(iv) Executives concerned in the execution of the BRC had not studied the POs, thoroughly.
(v) Placed orders were not executed as per scope of work defined in contract.
(vi) Documents for hired forklifts were not verified by the Executives concerned.
(vii) Lack of co-ordination observed between user Dept. & assigned Nodal Dept.
(viii) Placed purchase order was not spread/shared properly with User Depts.
(ix) Irregularities observed during executing the contracts i.e. old forklifts used, contract not executed as per SoW, log sheets and summary sheets not prepared properly.
Based on the investigation the following systemic improvements were suggested and the same were implemented through a memorandum from the Functional Director concerned.
(i) The TNC shall expedite the scrutiny of bids received efficiently and promptly while giving equal opportunity to all the bidders.
(ii) During execution of a BRC, all executives concerned from the Commercial and User Depts. must read/understand the PO terms and conditions before certifying the service entry sheets/SAP entries and invoices.
(iii) Log sheet should be signed on the same day or latest by next day. Only one day’s work to be indicated on each log sheet. Combined log sheet of different dates should be avoided. Dealing executive from User Dept. should ensure the same while signing the log sheets.
(iv) User Dept. should maintain proper register for hired forklifts/vehicles indicating date, forklifts/vehicles no., In time, Out-time, operator’s details & details of offered forklifts as per PO/Contract. In case a vehicle is changed due to some reasons, supplier should submit the documents of replaced forklifts to OTS Dept, Nodal Dept & User Dept. for execution of such type of contract, there should be proper co-ordination amongst Commercial Dept., User Dept. and assigned Nodal Dept.
(v) Scope of work (SOW) shall have complete clarity without any ambiguous conditions. Clauses pertaining to acceptability of MOU/JV/Consortium bids, if any, shall have complete clarity with legally vetted format for MOU/JV bids.
(vi) Feasibility to paste/indicate details like Contract number, Contract period, year of manufacturing, owner’s details etc. on the hired forklifts should be considered along with valid MDL entry pass.
(vii) Feasibility to be checked to incorporate clause related to utilization of same forklifts by other sub-contractors based on the extra requirement of forklifts on urgent basis. Indenting Dept. should deliberate on the same, before preparing SoW for same requirement, in future contracts.
7.3 Impact and Benefits:
With the implementation of the above mentioned Systemic improvement, it is ensured that all possibilities for malpractices such as utilization of old forklifts/vehicles, utilization of same forklifts/vehicles by other sub-contractors may be avoided. In future contracts, SoW may be made clearer without any ambiguous conditions. On implanting these Systemic Improvements, PO terms and conditions may be read/understand by every Executives & sub-contractors involved while executing the contract in proper coordination with other Depts.