A Tender Issue

Already fighting with their backs against the wall, Indian PC manufacturers

are faced with the threat of losing out on one of their most lucrative segments–the

government. Ironically, Indian PC manufacturers have found that they are not

even eligible for Government contracts. After all, what could be more

discriminating than a tender asking ‘only MNC brands to apply’! There’s a

bias against Indian PC brands across the market with a marked preference for MNC

brands. But Indian PC manufacturers are as competent and their service levels

comparable to MNC vendors. As Raj Saraf, MD, Zenith Computers challenges,

"Look at the components of PCs bearing MNC as well as Indian brand names.

If you look inside, there will not be any difference. We all buy from the same

place be it Taiwan or anywhere else."

In fact, way back in 1998, a committee under the aegis of MAIT was formed to

look into the issue of PSU purchases. Saraf was heading the committee but

nothing came of it. Today, Saraf says he is a disillusioned man and is not

looking at the government sector at all. (Market feedback however indicates that

Zenith has considerable presence in the Maharashtra government.)

Raj Saraf, MD, Zenith Computers “Look at the components of PCs bearing both MNC and Indian brand names. If you look inside, there will hardly be any difference”

Domestic vendors are dissatisfied with the way MAIT handled the issue

alleging that it has not done enough for the cause. Responding to the

allegation, Vinnie Mehta, Executive Director MAIT says, "It is not an easy

problem. There is no government stipulation, which says that brands cannot be

mentioned in tenders. The problem gets compounded since there is no central

government agency for procurement. Each department makes the purchase on its own

so it’s a educating the officials concerned on the competence of Indian PC

brands is no mean task." Mehta explains that whenever there are tenders

framed wrongly, MAIT addresses the situation on a case to case basis.

"There have been many cases where we have been successful in getting the

tenders rectified and ensured participation in the tendering process."

Meanwhile, MAIT has roped in chief vigilance commissioner N Vittal to add muscle

to the cause. Vittal agrees that this blatant preference for MNC brands is not

good but adds that there is no government guideline regarding specification of

brands.

Vinnie Mehta, executive director, MAIT “It’s not an easy issue to resolve. There’s no government stipulation which mandates that brands cannot be mentioned in tenders”

The response from various departments of the government on the issue of

procurement is that brands are mentioned in order to keep the flock of small

assemblers away from the bidding process. And since price is the determining

factor in tenders, small assemblers could very well walk off with orders.

Officials clarify that the credibility of Indian PC manufacturers is not suspect

and some Indian brands are certainly respectable. Vendors have offered a

solution to this. They have suggested that the government register vendors in

order to prevent small assemblers from bidding. Two of the biggest Indian

vendors in the government segment, HCL and Wipro, are said to be on the list of

most government departments.

Vendors like IBM and Compaq have tied up with various state governments to

implement e-governance solutions. Research firm Gartner had predicted that

government spending would help the sector recover to a large extent. It is no

wonder then that domestic vendors are gunning for the government. Players

traditionally focused in other market segments like the home and the small

businesses have now turned their eyes to this segment. Says Manish Agrawal,

Director (Operations), of Vintron Informatics Ltd, "We have no presence in

the government sector but are looking at that market now and specifying brands

is a matter of concern to us."

And Agrawal puts it quite succinctly. "Specifying brands is actually

ludicrous since it negates the concept of bidding for a tender. It is better to

place an order with a vendor directly."

Balaka Baruah Agarwal/CNS