Confidential

VIGILANCE DEPARTMENT
Abhimanyu Das, CTE Inspection
Chief Manager- CGD Project February 6, 2023

Sub: Vigilance observations on CTE Pattern inspection of Composite Works for

Construction of Mother Station under composite AR of CGD Network
Development under Tender No. : 21000114-HD-10157 in Jind-Sonipat GA having
AR No: 60190039.

Please refer meeting done in your office and site visit in 1st Week of January 2023 and
subsequent submission of documents for the CTE Pattern Inspection of the ongoing project
of development mother station at Nahar and SV2006. Basis site inspection and subsequent
document verification, following are the Vigilance observations, which requires necessary
action at your end:

1. As per the document collected during the inspection, M/s Tractebel Engineers Pvt Ltd
engaged as consultant for doing the tendering as well as supervision of the job. At,
Tractebel office, the same officer has handled the estimation as well as tendering job.
Name of two officers are :
 Mr. Abhishek Kumar Singh
 Mr. Varun Gupta
As per procurement manual chapter IV of Procurement Procedure in Para A2, only the
total estimated value will be given in the PR. The detailed breakdown, wherever
applicable, of estimated value (Breakdown by individual items) will be sent in a sealed
envelope along with the second copy of the PR (without estimate) for consideration at
the time of opening of tender by the procurement officer.

Here, tractebel is doing the estimation, procurement as well as supervision of the work.
Same person is involved in Estimation as well as tendering job i.e. job of user department
as well as procurement authority are being handled by the same EPMC Employee.
Confidentiality of breakdown cost of individual item is not being ensured from individual
purchase authority.

Please confirm whether this is in line with procurement policy of the HPCL. Necessary
compliance to be confirmed to Vigilance.

2. In the tender document, there are only 09 Sections/Para available under Pre-contract
Integrity Pact. As per the procurement manual, there are total 13 Sections/Para available.
Some of the important clause like “Fall Clause” removed from the tender document.

Reason for alteration in such important pre-tender document requirement to be

confirmed to Vigilance.

Page |1
3. Estimation of quantity not done properly and due to this, if we will compare the actual
outgo of executed quantity of MRR up to 27th Jan 2023, the L1 supplier is losing his
position as lowest limited vendor and outgo will be minimum for L3 supplier. Total cost
paid to selected vendor is 7.34 Cr as per quoted price, however for same quantity, outgo
for L3 would be 7.13 Crs only. Details calculation attached as Annexure 1.

Explanation for such huge variation bill of quantity to be asked from the consultant and
action taken to be confirmed to vigilance.

4. Project is almost 90 % completion phase, however, out of total 422 line items in the
tender, for 257 line items nil quantity used/executed as on 27th Jan 2023. This shows that
unnecessary items projected for job execution. Further, when we are not sure about the
quantity of job being used then we are generally floating SOR type tender in which only
one option being provided to contractor to quote the price in +- of percentage of LPR
Cost. This would have been eliminate the chances of losing the LLV as stated in point no.
- 3 above.

Reason for such huge deviation in estimation along with not following the SOR route
of tender to be confirmed to Vigilance.

5. Due to wrong projection and high PR Value, higher financial value for BQC of successfully
completed the similar work during the last 7 years. Hence, less no of vendors participated
in the tender process due to higher financial criteria.

SBU to do the check for all the PR made by the engaged consultant and submit the
details report of completed work value with respect to purchase order vale to vigilance
for further analysis.

6. Rate Estimation check on random basis:

 CCTV Camera and allied services: As per specification as available in the tender
and specification as available in the documents submitted by the contactor during
the actual supply, the same camera is available in the market at much lower price.
The same is true for other allied items also. As per document provided estimation
of the same done as per last tender done. However, in the same analysis, one
vendor has quoted substantially lower rate than other vendor has but the same
ignored in spite of very high difference. Rate quoted by the selected vendor is
even much higher from the rate as quoted by same vendor for other GA. Rate
Quoted by all vendors in current tender tabulated below:

Page |2
 Actual
HPCL Executed
Total
Line Desc Unit Quantity KNY L2 L3
Cost
Rate as on
27.01.23
CCTV1/3"D/NCOLTRUPOEIPNETCAM 93404.08 1120849 9 965613 1062000 159300
CCTV NVR WITH 2TB 366263.7 732527.5 1.8 724210 106200 159300
CCTV32" CLIENT WS 127252.4 254504.8 1.8 168981 159300 212400
EREC INSTALL. COMM. CCTV SYS C 137070 274140 1.8 241403 2124 10620
21.23 15.69 5.44
Lacs Lacs Lacs

Due to this extra outgo of more than 15.0 Lacs observed. Reason for such huge
deviation along with Rates quote from two vendors (as provided in approved
vendor list in the tender) to be provided to vigilance for further assessment of
the correctness of the estimated rate.

 Gas Detection System:

Rate analysis of this package done basis last awarded tender. The estimates
should not be based solely on previously awarded contracts, though they would
certainly be one of the factors for arriving at accurate estimates. Further, this is
one of the specialized item and extremely critical for the safety of the location.
Hence, why quotation from the vendors directly involved in supply of Safety
Equipment not asked for deriving the rates?

Rates quote from two vendors (as provided in approved vendor list in the
tender) to be provided to vigilance for further assessment of the correctness of
the estimated rate.

7. Rationalization of rates post tendering: Post price bid opening, reverse auction done but
none of the vendor participated in the reverse auction. Then, rationalization of rates
done with L1 vendor in which vendor offered a discount of 1.23% on all the items.
Analysis of lowest bidder quote vis – a- vis PR rates of some of the items reproduced
below:

Page |3
 KNY Rate
% with
Min.
KNY KNY Rate respect to
LPR Unit Offered
Line No Line Desc Offered % w.r.t Lowest
Rate Rate in
Rate LPR Rate rate
tender
quoted in
tender
SPLY &
LAYG OF
125 535 2360 354 441% 667%
WATER
PROOFING
SPLY AND
118 FIXG OF AL 1352 5900 1534 436% 385%
GLAZING
MAKING
109 OF SOAK 27064 118000 30680 436% 385%
PIT
SPLY AND
FIXG OF
48 303 1180 826 389% 143%
COIL
FENCING
SPLY&FIXG
CHAIN
78 828 2360 944 285% 250%
LINK
FENCING
PAINTING
40 111 295 177 265% 167%
OF WALL
SPLY &
FILLING OF
420 229 531 147.5 232% 360%
LOCAL
EARTH
ERECTION
OF
202 106200 236000 47200 222% 500%
COMPRES
SOR
LOAD
114 TESTING 55827 118000 62540 211% 189%
OF PILE
GDSMICR
OPROSIL2I
361 404969 767000 466100 189% 165%
NCLDPSM
OD
SPLY&ERE
CT OF
45 320 590 118 184% 500%
FOUNDATI
ON BOLT

Page |4
 CENTERIN
G AND
17 297 531 472 179% 113%
SHUTTERI
NG
SPLY AND
113 INSTLN OF 2058 3540 2478 172% 143%
RCC PILES
HANDLG&
203 ERECTN 35400 59000 41300 167% 143%
CASSCADE
SUPP INST
TEST
347 68440 112100 68440 164% 164%
COMM 1.5
TN AC
SPLY AND
144 PLACING 2913 4720 1416 162% 333%
OF COVER
GDSSIL2IP
65HYDRO
363 469469 708000 619500 151% 114%
CABONDE
TOPT
LAYG OF
STONE
73 800 1180 590 147% 200%
AGGREGA
TE
PAINTING
OF
38 242 354 324.5 146% 109%
EXTERIOR
WALL
SUPP&ERE
204 CTN LCV 414180 590000 88500 142% 667%
POST
EXCAVATI
ON OF
3 190 265.5 236 140% 113%
EARTH
WORK
SPLY &
LAYG OF
31 305 413 354 135% 117%
CEMENT
PLASTER
SUPP INST
TEST
335 88500 118000 85550 133% 138%
COMM 2
TON SPLI
SUPPLY:
192 6088 7670 1770 126% 433%
STN PIPE

Page |5
 SEAMLESS
12"
SUPPLY:
STN PIPE
193 2069 2566.5 1180 124% 218%
SEAMLESS
4"
SPLY&APP
LY WHITE
39 120 147.5 118 123% 125%
CEMENT
PUTTY
FDS WITH
WALL
370 220454 268225.8 76700 122% 350%
MONT
DCAB

Abnormal variation observed in offered rate by selected vendor from LPR Rate as well as
lowest offered rate in the tender. This indicates that either rate analysis of these items
had not being carried out properly before floating the tender or vendor had quoted
higher price for these items.

Above observation overlooked while doing the rationalization of rates post-tender

process and tender finalized more than 20 % of PR rate for above-mentioned line items.

In Rationalization process, In case of Works Contracts, if party, lowest on overall basis

has quoted substantially higher rates for some items as compared to cost estimate in
procurement requisition/rates quoted by other parties for those items, the selected
party may be asked to match its rates with PR estimates/rates quoted by other parties.
However, during the negotiation of this tender, this exercise not done properly and
hence, tender placed with abnormal rates for some of the line items. This is also one of
the reason for losing of L1 Position by the selected vendor on the basis of actual executed
quantity as on 27th Jan 2023.

Reasons for not following the due procedure while doing the rationalization process
along with user remarks covering rate analysis of items may please be forwarded to
Vigilance.

8. Analysis of Purchase Order Placed on same party for different GA analyzed and found
that abnormally high rates quoted for this PO with respect to similar job. Details of the
same attached as annexure. Analysis of the some of the items tabulated below:

Page |6
Item 20002318- 20002319- 21000403- 21000781- Minimum PO Quote
OQ-10157 OQ-10157 OQ-10157 OQ-10157 Quote w.r.t. to
dated dated dated dated min quote
02.01.21 02.01.21 09.06.21 28.07.21
SPLY AND
FIXG OF
URINAL 3965 4546 5708 11852 3965 299%
GDSMICR
OPROSIL2I
NCLDPSM
OD 317216 363696 515278 642005 317216 202%
GDSSIL2IP
65HYDRO
CABONDE
TOPT 313251 359150 356731 592620 313251 189%
GDSSIL2IP
65HYDRO
CABONDE
TPGD 118956 136386 198184 168386 118956 142%
GDSSIL2IP
65BEACON
S 19826 22731 17440 28064 17440 161%
GDSSIL2CA
LIBRATION
.KIT 11896 13639 19026 16838 11896 142%
GDSSIL2IP
65JUNCBO
X 7930 9092 7531 11225 7531 149%
GDSSIL2O
PGDALIGN
KITWTHAC
CS. 79304 90924 77688 112257 77688 144%
GDSSIL2IP
65HOOTE
RS 19826 22731 19818 28064 19818 142%
CCTV NVR
WITH 2TB 237912 272772 277457 336771 237912 142%
CCTV1/3"
D/NCOLTR
UPOEIPNE
TCAM 63443 72739 68175 89806 63443 142%
GDS
SIL2IP65P
ORTGASDE
TAPIRP500 118956 136386 150620 168385 118956 142%
CCTV32"
CLIENT WS 55513 63647 59455 78579 55513 142%

Page |7
CCTV
WORK
STAT
FURNI
WITH REV. 11896 13639 12684 16838 11896 142%
SPLY AND
LAYG OF
RCC 5551 6365 7610 7408 5551 133%
TMTB
REINFORC
EMENT
UPTO
PLINTH 62 72 65 77 62 125%
TMTB
RINFORCE
MENT
ABOVEPLI
NTH 63 73 65 79 63 125%
SPLY &
FILLING OF
LOCAL
EARTH 397 455 388 444 388 115%

SBU should analyze the reasons behind the abnormal quote against this PO. The same
vendor with respect to similar job has quoted much lower rate for another geographical
area. Time-period is also almost same i.e. Jan21 to July 21. Some of the rates are
abnormally high with respect to purchased order finalized in even in June 21 also i.e.
almost during same time. Why this aspect not considered while doing the rationalization
of rates while finalization of the tender. Same vendor is supplying the material as on date
also to different GA on different rates.

Analysis finding as sought above to be confirmed to Vigilance along with reasons for
why price difference should not be recovered from the contractor as per the standard
Fall Clause of integrity pact of the tender.

9. Time extension for completion of contract:

Contractual delivery/ completion date (CDD) for this contract is 28.02.2022. As on date
total 05 no’s of time extension had already been given to contractor up to 31.03.2023.
However, as per tender terms and condition, Grant of any extension of time shall be by
means of issuance of a Change Order. Only one Change Order for extension of delivery
period until 15/07/2022 has been made in the JDE.

Reasons for the deviations noted above may kindly be intimated to Vigilance along
with corrective actions.

Page |8
10. Review of Design, Drawing, Specification, STC and Measurement:

 Done the comparing of Dispenser Canopy design of having size 13 M X 9 M with

specification as available with the HPCL Retail SBU Purchase Order and found that
quantity of steel being used in the canopy is almost double of similar size canopy
being fabricated at different retail outlet. Further 10 years guarantee being
extended for the canopy structure as per the PO terms of retail outlet. No such
guarantee being offered in current canopy structure.

Reason for using such heavy structure design to be confirmed to Vigilance.

Necessary compliance in all future structure to be ensured.

 The weight of structural steel for payment shall be determined from the
fabrication drawings and respective bill of materials prepared by the Contractor
but while reviewing the construction drawing, bill of quantity (BOQ) not observed
in the drawing and ground measurement used for doing the payment.

Reason for not following the tender terms and condition to be confirmed to
Vigilance along with corrective action of comparing the billed quantity with the
BOQ.

 As per GTS of DG Set, some of the spares to be supplied (Page: 940) but as per
dispatch documents no spares supplied while doing the delivery. Similarly, for
Steel Distribution board, quoted price is inclusive of 2 years (Page: 924) spares as
specified in the tender documents. For GDS Panel-The panel shall be provided
with 20% installed spares (minimum one number) for items like monitors/
controllers card, relays cards, isolator/barriers etc. Panel shall have spare space
(20%) for future expansion. However, no spares/ additional space observed in the
panel.

Compliance of above terms, condition to be ensured, and necessary

confirmation to be provided to Vigilance along with reason for observed
deviation. Similar check for all other items to be done and necessary action if
required to taken and the same to be confirmed along with corrective action.

 As per STC (Page: 165), Contractor shall mobilize Construction Manager/ Section
In-charge, QA/QC Engineer, Planning Engineer/ and Safety Officer who will be the
permanent employees of the Contractor and shall be available for the entire
duration of job. However, as per documents provided/site visit, only two
manpower engaged towards Section In-Charge and QA/QC Engineer.

Reason for not engaging the required manpower along with applicable recovery
from the date of LOI to be ensured and confirmed along with ATR to Vigilance.

 As per tender terms and condition, the rate quoted for the earth fill shall be
inclusive of the cost of clearing and stripping, consolidation, including watering,

Page |9
 testing etc. of the exposed ground. However, payment also made for Clearing the
jungle.

Justification for such payment along with applicable recovery to be confirmed

to Vigilance.

 Payment for item earthwork in filling shall be paid for compacted net volume of
filling after deductions of foundations, culverts, drains etc. However, as per the
release RA Bills, no such deductions made and excess payment made under item
supply and filling of local earth.

Justification for such payment along with applicable recovery to be confirmed

to Vigilance.

 Deviation from approved vendor observed in two important high value items-
GDS System and CCTV. As per tender terms, although vendor can also go for
alternate brands after submitting the requisite documents for approval, as per
deviation format available in tender, cost benefit analysis must be done before
approving the alternate brand.

As per the document provided, no cost benefit analysis done by the consultant
before approving such deviation. Reason for not doing the same along with
necessary cost benefit analysis to be confirmed to vigilance.

11. Testing of Materials in outside/in-house testing facility: As per GTS - STANDARD FIELD
QUALITY PLAN, user/consultant has to ensure the required testing of material and
finished goods. However, details of requirement vs actual testing details not submitted
as on date. The same to be submitted to Vigilance as per following format:

Material Qty. used Periodicity No of test No. of Test Remarks

required conducted

Reasons for not conducting the tests as stipulated in the tender to be furnished along
with deduction towards test charges (not conducted) which are required to be borne
by the contractor.

12. Payments/ RA bills:

 While reviewing the RA Bills, it observed that during initial period, bills for
reinforcement were release basis invoice quantity. However, as per the tender,
this should be done basis BBS.

 Payment for all the sanitary items were released upon the supply of material and
no fitting done as on the date of site inspection.

P a g e | 10
 Final coat of Painting Job was
pending at the time of site inspection, however,
bills for the same already released.

Some of the quantity of different line items also paid against this P0 which are
not specific to intended site for which tender had been floated.

Necessary clarification with respect to above deviation along with corrective

measure/ deductions to be confirmed to
Vigilance.
13. Deployment of Manpower by Consultant: Please refer the following clause related to
absenteeism of Manpower of consultant purchase order:
All deployed manpower
by CONSULTANT shall take prior consent of leave in advance
EIC. In case of absence/ without from
any prior consent of leave from the ElC,
2500/-per day per person shall be imposed over and above the penalty @ Rs.
pro-rata basis. It is also to be noted that prior consent leave deduction
for absence on
of by manpower deployed by
consultant should not get exceeded
In case
cumulatively by more than 45 days in a year per
person. if it exceeds, penalty of Rs. 2500/- per day per person shall be imposed for
over and above of 45 days.

Compliance details of above stated clause along with certified

sheet and deductions details to be copy of attendance
confirmed for all the contract
by the consultant from date of LOI of subject employee as provided
i.e.job 28.08.2021.

Thanks for your support during the audit and

providing the required documents as well as
arranging the sitevisits as per the requirement. Request you to kindly submit the ATR by
20.02.2022.2023

Aceden Cuman
Akhilesh Kumar
Chief Mgr. Vigilance- North Zone

Pape 11