05 August 2011

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Read Complete CAG Report on XIX Common wealth Games 2010 Part Two

Read Complete CAG Report on XIX Common wealth Games 2010 Part Two

Audit Report on the XIX Commonwealth Games 2010
This Audit Report for the year ending March 2011 has been prepared for
submission to the President under Article 151 of the Constitution.

The Comptroller and Auditor General (CAG) report on Commonwealth Games has been tabled in Parliament.

Event Knowledge Services (EKS) was awarded five consultancy contracts
relating to venue appraisal/ briefs, project monitoring, games planning and
workforce (awarded to an EKS consortium) during 2005-08.

Three of these contracts were awarded on nomination basis, facilitated by strong patronage from the CGF (with which EKS had a close link).

Tendering conditions for the other two contracts were tailored to suit EKS. We are also unable to verify the need for this multiplicity of contracts, and the possible overlap between the deliverables from different contracts.

Planning and scoping for venue overlays was critically delayed by the OC
and completed only in June 2009, after which the responsibility for procurement of
overlays items was transferred from the venue owners to the OC.

The procurement process followed for award of venue overlays contracts was highly irregular. OC inexplicably shifted from an item-wise basis (followed internationally) to a venue-cluster approach, based on geographical locations. This cluster-based approach,
along with tailored eligibility criteria, was used to discourage competition by
restricting the number of vendors.

These criteria were then selectively and inconsistently applied to remove competitors, leaving a field of just four “technically qualified” consortiums – ESAJV-D-Art-Indo, Pico-Deepali, Nussli and GL-Meroform.
The commercial bids of all four vendors were the lowest exactly for those clusters, which were their first and second preferences.
Such coincidence points to collusion and the possibility of cartels among the vendors.

The overlays contracts were signed at exorbitant rates, causing huge
financial loss to the OC (and the GoI).

The main ceremonial events of CWG-2010 were the Queen's Baton Relay (QBR), and the opening and closing ceremonies

CAG found numerous irregularities in the appointment of contractors/ vendors for various ceremonies.

Regarding the QBR Launch Ceremony on 29 October 2009, we found an inexplicable reduction in the scope of work for JMW (the event management agency for the QBR Launch) in October 2009 (with an increase in cost).

On the other hand, the OC made highly suspect payments of £ 386,237 to two little known entities – AM Films UK Ltd and AM Car and Van Hire Ltd – for diverse and unconnected services for the QBR Launch ceremony. The assignment of work
and payments therefor were highly questionable; associated approvals and clearances were obtained and payments made with uncommon haste.

Large amounts were also paid in cash, perhaps to avoid leaving a transaction trail. The
role of Shri TS Darbari and Shri Sanjay Mahindroo, who were unrelated to OC's
Ceremony Functional Area, in the QBR Launch Ceremony is also questionable.

CAG found that planning for the opening and closing ceremonies was
inordinately delayed. Further, a multiplicity of agencies was engaged – Shri Bharat
Bala as Creative Director/ Creative Consultant, Spectak Productions (Shri Ric
Birch) as International Consultant, Wizcraft as the Event Management Firm and 17
other consultants.

We also found that Spectak Productions and Wizcraft had tied up with other experts well in advance of the award of the contracts. The engagement of the additional consultants (for at least Rs. 6.12 crore) at OC's cost amounted to a clear financial benefit to Wizcraft

There were also major irregularities in procurement of accessories/ special
items. The consultant for the band stand, Mr. Mark Fisher, got his full fee of US$
514,000, even though the idea of the band stand was abandoned. Mr. Fisher then
presented a design for an aerostat, which was accepted.
The fact that Spectak Productions and the aerostat vendor were part of the same group was concealed.

There were also serious irregularities in the technical evaluation and award of the
lighting/ searchlight contract, as well as in the award of the contract for video

Contracts for Rs. 16.49 crore for art direction and props for the opening and
closing ceremonies were irregularly awarded to Blue Lotus Productions, without
even having an approved list of props which were actually required.
Huge quantities of props remained unutilized. Some props were not even received.
Many of these props were exorbitantly priced.

OC was responsible for providing catering services at the Games Village
and venues for athletes and team officials, CGF/ CGA officials, VIPs, technical
officials and media persons, volunteers, workforce, contractors and spectators.
We found inexplicable delays in planning for catering services, as well as in the
execution of various catering-related activities

There were numerous irregularities in the award of the Games Village
catering contract. The process of award took 14 months, with two rounds of
tendering, both on single financial bids.

The cancellation of the first tender by the Chairman, OC was not only against the recommendations of OC officials, but was also done after opening the single financial bid on the Chairman's verbal orders.

This decision to re-tender weakened the OC's negotiating position vis-a-vis the
vendors and resulted in frantic activity upto June 2010 for conclusion of four
separate contracts/ agreements.

The process for award of venue catering contracts was also flawed, with
unusual delays.

This witnessed one round of cancellation of tenders and floating
of three new RFPs as late as July 2010, with compromises on transparency, quality
and economy (due to insufficient competition).

Consequently, there were numerous complaints about the venue catering services, resulting in emergency arrangements during the Games Time.

Successful organisation of the Games required several integrated technical
solutions, including a Timing, Scoring and Results (TSR) system, a Games
Management System (GMS), and a Games Time Website.

We found that planning for TSR was badly delayed and initiated only in
January 2009.

There were clear and repeated interventions at different stages to
steer the TSR contract towards Swiss Timing Omega and eliminate MSL, Spain.

Restrictive experience criteria for “end-to end service” were specified and altered,
and used to irregularly disqualify MSL, Spain.

Swiss Timing Omega and MSL Spain had jointly provided TSR solutions for Melbourne CWG-2006, Doha Asian Games-2006 and Beijing Olympics 2008, and were, thus, equally qualified / unqualified as to the “end-to-end service requirement”.

OC was left with a single financial bidder, effectively eliminating any opportunity for competitive pricing of TSR.

This facilitated award of the TSR contract to Swiss Timing Omega at an
exorbitant cost of Rs. 135.27 crore (compared to just Rs.39.84 crore equivalent at
Melbourne CWG-2006 from the same vendor).

There were also several deficiencies in the performance of TSR - in particular, the Commentary Information System (CIS) and the Games Information System (provided as Value-in-Kind sponsorship by Swiss Timing Omega).

The award of the Games Management System was also flawed. Restrictive
RFP conditions resulted in disqualification of three out of four bidders, with MSL,
Spain being eliminated through a biased evaluation.

Gold Medal Systems was finally awarded the GMS contract on a single financial bid at a total cost of Rs. 25.29 crore (compared to just Rs. 4.15 crore equivalent at Melbourne-CWG from the same vendor).

OC failed to consider the need for a Games Time website till June 2010. The award of the contract to HT-Hungama was flawed and irregular, with award procedures appearing to lack transparency. In addition to adverse media reports about the website's performance, the CGF President also confirmed serious problems with the website.

Suggested Reading –
Read Complete CAG Report on XIX Common wealth Games 2010 Part One

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