Pakistan. Failure to supply rice: Rs 4.2 million bid bond forfeited by TCP

01.09.2016

The Trading Corporation of Pakistan (TCP) has forfeited the bid bond amounting to some Rs 4.2 million of a rice exporting firm as it failed to supply the commodity. Sources told Business Recorder Wednesday that despite getting a contract award letter from the state-run grain trader for supply of 10,000 tons Long Grain White Rice (IRRI-6) for China, M/s Chappal failed to supply the commodity as per the prescribed terms and conditions. Besides forfeiting the bid bond, the state-run grain trader also initiated the process of blacklisting the firm from the suppliers' list," they added.

Following the directives of the federal government, on August 5, 2016, the TCP invited bids under the Public Procurement Rules 2004 on Cost Insurance and Freight (CIF) basis from domestic companies dealing in export of rice for the export of 10,000 tons of IRRI-6 rice to China as gift.

In response to the TCP's import tender, opened on August 10, 2016, some three companies submitted their offers and quoted price ranging from Rs 41,392 per ton to Rs 44,920 per ton for the supply of rice. M/s Chappal Traders was the lowest bidder, which offered to supply 10,000 tons of IRRI-6 rice at a price of Rs 41,392 per ton on CIF basis. After bid evaluation, the first lowest bid was declared responsive and accordingly, the TCP awarded the contract to M/s Chappal Traders for supply of 10,000 tons of IRRI-6 rice for China.

As per the tender's terms and conditions, the successful bidder was required to supply the entire quantity in 22 days. However, after getting the contract award letter, M/s Chappal Traders put forth some conditions for supply of rice.

Sources said the successful bidder on August 12, 2016 expressed inability to meet the timeline stipulated in Clause 15 of the tender documents, which required completion of shipment of 10,000 tons of Long Grain White Rice (IRRI-6) at the load port within 22 days from the date of issuance of the letter of award. In addition, M/s Chappal Traders communicated another condition for supply of partial cargo of 5,000 tons eight days after the last date of shipment (ie September 10, 2016 against the tender stipulation of September 2, 2016).

M/s Chappal Traders further asked the TCP for restrictions on procuring rice from other bidders at a price higher than the price quoted by it, which defeats the objective of procuring the complete cargo of 10,000 tons by September 2, 2016. According to sources, M/s Chappal Traders also failed to meet the timeline and secondly it defeated the very objective of procuring 10,000 tons of rice by the state-run grain trader. Due to these reasons, the TCP was forced to cancel the first rice tender for China and accordingly, procurement was made through the second tender opened on August 16, 2016.

As M/s Chappal Traders failed to supply the commodity, the TCP forfeited some Rs 4.2 million bid bond submitted at the time of tender submission. The state-run grain trader also issued show cause notice to blacklist the company under Rules 19 of the Public Procurement Rules 2004.

Source said a delegation of Rice Exporters Association of Pakistan (REAP) also met the TCP Chairman Rizwan Ahmed to resolve the matter, however the chairman refused to give any favour.

Meanwhile, while responding to the TCP's show-cause notice for blacklisting, M/s Chappal Traders said that it never expressed inability and instead indicated that the delivery will be within 22 working days, as there would be holidays for Eid festival....the TCP had already accepted our conditional bid. "After pressure and negotiations, we came forward and offered supply of 5,000 tons before September 10, 2016 to sort out the issue. Regarding the restriction not to buy at higher rate from other bidders, it was only a request," the firm maintained.


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