Sunday, March 15, 2009

The missing "quality control" in government works

I will argue in this post that our engineering procedures and rules put more emphasis on tendering processes, while under-playing the importance of outcomes. It is a classic example of how bureaucracy misses the woods for the trees, and arises from an obsession with procedure over outcomes. And the result is predictable - poor quality work with abnormally high execution delays!

Have you often wondered why our street roads or drains or water supply lines are of such poor quality? Why is it that government works suffer from massive time over runs? Why is it that we end up under-utilizing the allocations under various Government infrastructure programs? Why are we not able to spend the huge allocations and sanctions made under the various infrastructure programs?

The ultimate objective in any infrastructure work is to ensure that the work gets completed in time and with the best possible quality. All the procedures and bureaucratic formalities are ostensibly tailored to meet this specific objective. The entire bidding and developer selection process, work execution, and bill payment process is standardized in the form of specific guidelines, so as to eliminate the role of discretion and the attendant problems of flawed judgements, corruption and nepotism.

The fundamental premise is that once a qualified contractor is entrusted with the work, most of the problems gets solved. Add in a standardized procedure for work execution and bill payment, and the remaining problems get sorted out. Or so, it is claimed. This approach fails to account for the role of sub-contracting, now so rampantly commonplace, and the entrenched and widespread collusion between contractors and engineers. It monitors the form and procedures, while completely ignoring the importance of quality.

It is now widely acknowledged that atleast in the major departments, tendering procedures are generally followed, and corruption is confined mostly to compromising on the quality of the work. But unfortunately our systems pay lip service to this dimension.

Our infrastructure contracting market is characterized by its limited depth and breadth and this situation is not likely to change much in the foreseeable future. This, coupled with the already massive and rapidly expanding number of infrastructure works, makes infrastructure contracting a seller's market. This is most commonly manifested in the numerous cases of single tenders and repeated re-tenders due to non-response in tenders for infrastructure works. In fact, one of the commonest and largest sources of time over-runs is over delays in tendering out the work.

Let me illustrate this with this example. Each department has its detailed tendering guidelines, with technical and financial qualification norms, and Standard Schedule of Rates (SSR). These rules and SSR rates are more or less same for all the engineering departments in a state, and are cast in stone, in so far as they are renowned for their inflexibility. The main purpose of such rigid standardization of guidelines is to check corrupt practices and bring transparency to the procurement process. But this has many casualties, some of which have been documented here, here and here.

In urban infrastructure contracting - water and sewerage, major open outflow drains, city roads, and housing - many cities have had similar experience of repeated tenders evoking no response from contractors. To give one example, recently the Vijayawada Municipal Corporation (VMC) had 17 single tenders for storm water and sewerage works, worth Rs 200 Cr (or $50 million), from out of 19 tenders. The other two elicited just two responses. In this context, the whole process of bidder selection takes on an all-together different role.

The seller's market apart, the contractors across departments get over the bureaucracy surrounding the bidder selection process through the remarkably versatile practice called informal sub-contracting. Most states and departments do not permit sub-contracting and this is clearly specified in their tender schedules and work agreements. And whenever sub-contracting is permitted, the procedural rigidities make it a minefield for any meaningful regulation. In the final analysis, it may not be incorrect to say that more than three-fourths of all urban infrastructure works in the country are sub-contracted out almost completely.

In contrast to the iron-clad bureaucracy and procedural rigour insisted in the developer selection process, the process of monitoring the progress and quality of work is sorely neglected. None of the numerous regular engineering departments in any State - PWD/Roads & Buildings, Panchayat Raj, Water Supply, Public Health/Municipal etc - in the entire country has adopted the concept of a comprehensive third party quality control, except in a few project works were the funding agencies insist of them. Further, the internal quality wings in each of these departments are invariably the most neglected or under-staffed wings - non-focal positions which are given to engineers as punishment postings!

Similarly, none of these departments have adopted any of the professional work monitoring systems - softwares, project monitoring consultancies etc, that are essential to independently monitor the progress of execution of works. In the absence of such systems, the supervising engineers are handicapped by being unable to effectively and systematically monitor the progress of execution of works. They continue to rely on the regular system of reviewing (or as is more common - not reviewing!) numerous proformas that contain dubious and most often old information that are periodically furnished by their sub-ordinates.

It is commonplace for major works to get un-necessarily delayed due to important critical activities not getting resolved in time due to it not being brought to the notice of the competent authorities at the appropriate time. In any case, once works are tendered out, the regular engineering departments pay limited attention to monitoring timelines and ensuring completion within the schedule period. Extensions of Time (EoT), with no justifiable or valid reasons, are a normal practice in the execution of engineering works.

The absence of any independent quality and work progress monitoring system suits the contractors who are now left with the freedom to execute the works at their pace and based on their quality preferences. The engineers too are happy, since the absence of independent monitoring virtually eliminates the possibility of complaints on work quality and pressures on expediting the progress of works. The work itself is not subjected to even a fraction of the scrutiny done during the tender finalization process. It is as though, the objective is fullfilled once the tenders are finalized!

No comments: