OK 
19 bids have been received against UIDAI’s tender invitation to engage and Application Software Development, Maintenance & Support Agency (ASDMSA) via.
TCS, Infosys, Wipro, HCL and IBM are few among the participants in the competition.
Now before I set to dissect the exercise, let’s take a look at the following sequence-of-events in the tendering process adopted by UIDAI to spend a cool Rs. 190,000 lac in 2010-11 alone. Yeah, you got it right we are discussing the tendering process here.
Progress:
The fate of UID decided with agreeable competition in roughly 24 working days! Or not quite.
The Philosophy:
Anyone, who is in Business today easily understands the rigid & often biased process of Tenders (Bid invitations). The process was developed centuries ago during the era of World Wars when concepts like mass production, supply-chain, competitive bidding took birth etc.
For UID too, the same process was applied. Of course there must have been some work from UIDAI Technical team prior to the dates of tender mentioned above, but those are background processes whose sanctity one could only guess or make out from the nature of competition which one usually sees in similar Government/Corporation tenders.
Information Technology did not exist during World War.
Applying such an old philosophy, in a modern day situation and that too for a Technology driven project where technology itself is advancing at a break-neck pace is nothing less than – (IMHO) – making a fool of oneself. Time and again Government & big organizations have failed to keep up with quality & technology in such an environment. Read this & this if you are not convinced.
In midst of tenders, the checks & balances in the British borne system of Indian Governance (through Vigilance & Technical examiners) are post-facto methodologies and do not help in prevention nor recovery of the lost tax-payer’s money. And the situation is no different from that in some of the most advanced states around the world. Take California, for example. In a recent post on BusinessWeek Prof. Vivek Wadhwa explains how billions of dollars are being wasted with pathetic services and infrastructure because of legacy systems.
He writes “I wrote about California’s IT challenges and encouraged Silicon Valley entrepreneurs to come to the rescue. I cited an example of one system for which the state has budgeted $50 million over several years, which I believed could be rebuilt for less than $5 million in less than a year. I received several credible offers.”
Now is the situation India worse or better than this?
Game the UID project.
Coming back to our subject, in case of UID project too the assumptions of the tendering process make the overall situation look terribly flawed. Seriously. 19 bids may seem enough competition to believe that everything is going fine. But a simple mathematical evaluation & a close look at social tree of industry today can show us that it’s very easy to ‘game the tendering process‘ or at least ‘fool oneself‘.
In case of projects where Government (or technical evaluators) is not very clear about Technical scope of work, they normally adopt a two-bid system and/or hire a Consultant as a stand by. To draft the scope then, the Government offices rely more on “Competing Agencies ” and more often than not almost completely depend upon them. Thus comes in the perfect loophole in the system.
For UID also the situation was no different.
The technical scope is not easy to define and the one which was drafted in hurry and contribution from “competitors” might be manifest with several opportunities for the bliss-mongers. Even in a completely non-ideal situation where the UID work is distributed equally among all the 19 bidders (A Few Good Men, that is) the profit-per-party in work would amount to Rs. 190,000 lac/19 parties = Cool Rs. 10,000 lacs! Amazing figures, to play with right?
Understanding the Social Tree of IT Industry.
IT industry is a big social network. Let us have a close look at the format of human connections and relations here. People in IT industry think alike, work alike and are mostly well connected. Not that there is corruption everywhere (for I fully believe in integrity of these big competing organizations) but is there any “competition” in true sense in this tendering process at all?
It is quite often seen that man-power of TCSes, Wipros and Infys are poached, exchanged and sometimes joked around as well. In such a situation there is very remote chance that marketing wings of the competing agencies are not closely knitted (or aware of information). Now this does not mean that a cartel is place, but if one guy makes a mistake in preparation of Technical scope, the other guy being a participatory member will not correct it unless the opportunity affects his chances of winning the business. Thus making a unoptimized situation.
Here are some flaws in ASDMSA tender that we highlighted earlier, for example.
Predicting the Next
Well I leave this question open for now. Is there a replacement for tendering process? Any strategy which could alleviate us – the tax-payers – over the incumbent mess of tenders. Is there any buyer for this question in the first place?
Anyone around the world if the situation applies.
190000 /19 = 10000 and not 1000
Fixed the typo. Thanks. Arvind
Arvind,
I didn’t quite get the rant of the article. If the issue is with the tendering process, world over it’s pretty much the same (Govt, private) and across industries and domains and there is no point even discussing or picking on it.
if you think that UID project is too technology driven for the big IT companies to handle, ur mistaken.
Help us understand if there is any other way even to go about UID implementation. coming up with some possible solutions for the govt. to partner with apart from this IT biggies would be helpful.
I feel that the fact that we are able to track it through the entire bidding process with utmost transparency for a govt. project of this scale and magnitude in itself is something to laud about in India
Even in your previous post when you picked on ‘Private Cloud’, I was not sure if you literally meant you didn’t get it or it was sarcastic remark.
Mmmm, what is a ‘private cloud’? I really do not understand. Please care to explain.
For this “…if you think that UID project is too technology driven for the big IT companies to handle..”: I would recommend you to re-read the article. I never mentioned this at all.
For this “…to track it through the entire bidding process with utmost transparency for a govt. project of this scale and magnitude in itself is something to laud about in India.”: I agree, n say thanks to internet even though the level of transparency has to increase.
Overall:
Honestly, it is easy to term an article like this a rant. Anything that questions legacy or age-old practices like bidding an all are bound to rake up initial rejections.
Simply speaking we are “living a lie” when we depend on construct of competitiveness in the old systems. I hope you will understand my point of view.
And my reason to write such a piece: “Expenditures and viability are not really well defined in the UID project”. For example what is ‘private cloud’ type of term doing in such a high value tender?
I am happy about the initiative though, but strongly believe that bidding process in such an environment is a completely flawed approach.
Cheers,
Arvind
Hi Venkat,
There are some aspects of your comments above I would like to reply to.
Firstly I think these are not rants – I think there will be criticism (constructive and otherwise) for a highly visible project such as UID and you should be open to learning from them. I have been at Microsoft which has a history of pooh poohing criticism in their heady mixture of geekiness and self importance and I think its a lesson in psychology how NOT to approach a different point of view than yours.
Now to the specifics –
You said “if you think that UID project is too technology driven for the big IT companies to handle, ur mistaken” – I think ff they cant handle it – no one else can. However the uber-point was the mish-mash that seems to emerge here. Different IT companies (all intelligent people I am sure) are running in different directions with different parts of the project. Arvind (and I) see that to some extent – hence brought it up.
Process of bidding – I differ with some of Arvind’s thought here – I absolutely love the transparency that you have here. But I am not sure if the process itself is the best way to go. Let me give an example – in early 20th century – if you asked someone to send a message from Washington to New York – he wouldve advised to send it by a wagon (no brainer – easiest to implement solution). How can changes like Telephone come in if we always seek to put old wine in new bottles? Why cant we have innovative newer solutions (let me help you with a few examples) which take out bidding companies from their comfort levels. As an example – for biometric cards I would ask the interested companies to run pilots inside one of their campuses for each employee and present their costs and their challenges – according to a high level checklist – we dont want to compare apples and oranges. Also EVERY company wants to be associated here – why should UID negotiate from a position of equality when it can from a position of strength?
Thirdly – Private cloud is a neologism that doesnt quite capture the essence of the capabilities. Hence there is a possibility of misunderstanding (As Arvind and I did to some extent). Also the fact that implementations of “private clouds” are few and far between makes it open to interpretation – my only point here is a stricter definition for the end result than “clouding” it with a generic term – sorry about the pun.
Lastly – I think most of us here at PI have a desire to do things better (be it startups or government). Which is why we do speak out whenever we see non-optimal processes being used and improvements being possible. This IMHO is a much better way of doing things than the typical “yes men” and sycophancy projects (like this one) are capable of descending into. I hope they dont
But then “What is man that thou art mindful of him” – David – The Holy Book
Well, I believe the tendering system is flawed. Otherwise, you would not hear of stories, movies and convictions around it. Everyone who has been part of the process knows of many ways to game the system and circumvent it.
For e.g. its widely believed that if the RFP is made in a certain way, the tendering is but a formality and the bidders are pre-decided.
The other problem inherent in IT tenders is the lowest price bidder winning. This puts no incentive on the winner to put the best resources on the job. Just look at the crap NIC, TCS and HCL dole out in the government projects.
If you need more proof, I am happy to take you personally to such projects.
What is the solution, you ask? Well, we need to modify (and not replace) the tendering process. The tendering process has to differentiate between knowledge work and labour work. The RFP must be made in an open and transparent manner as well and not be a cut and paste from a $200/hour E&Y or IBM consultant. The bidding must allow innovation and cost to be factored in.
Tarun
Tendering system is definitely a flawed approach. How can E&Y Pwc or for that matter any consultant ever know or understand what this type of project will require technically? These people are fed with whatever infy, tcs and such companies feed them with. and prepare the scope of work.
Consultants are least competent to understand about mass technology, it is just that they absorb the risk/blame away from the authorities. Good way to earn money in India.
Tenders system is anti-innovation in many ways.
And modern day governments should discard it.
Very subtle issue raised here.
Good to see such points being raised here.
I agree! It is indeed anti innovative!
I agree with the premise of the article. Tendering projects like 3G & MNP and several more indicate that we not only fail in execution in terms of time & quality but also cost of project goes invariably high.
Ideal way for UID project would be to open the scope of development to everyone in India or world to develop registration & verification processes for UID.
Whoever makes the most competitive application(s) as per choice of the people and is adopted in a few years. I mean this is one of the ways probably.
That’s true that the technical scope is not easy to define and the one which was drafted in hurry and contribution from competitors might be manifest with several opportunities for the bliss-mongers. Nice blog.