The country's biggest IT services vendor, TCS, is up in arms against a Rs 1200-crore ESIC (Employees State Insurance Corporation) ord
er bagged by rival Wipro. According to a business daily, the Mumbai-based company has complained to the government about how the contract, which is the biggest software purchase involving the exchequer, was awarded to Wipro.
ESIC, a Union government agency that provides health insurance to over 10 million workers in the country, had invited bids for its Panchdeep project, designed to streamline registration filings and payouts at its 144 hospitals and 50 regional centres.
ESIC called for two tenders for the project within a span of three months after the first round was rejected by it. TCS was among the three bidders to the contract, where Wipro was selected winner by ESIC on the basis of the lowest bid, in the second round of the tender process earlier this month.
The first tender was floated in October last year and financial bids were opened in November. TCS, which reportedly offered to execute the project for Rs 1,677 crore, was the lowest bidder compared with a Rs 1,890 crore quote by Wipro and a Rs 2,100 crore bid made by Infosys Technologies Ltd.
However, ESIC decided to cancel that tender round because, as per a corporation official, who according to the publication did not want to be identified, the bids of Wipro and Infosys were found to be defective and the agency did not want to go with the lone bidder left, TCS, even though the Tata firm was the lowest bidder in the round.
But a senior TCS executive insists that that his company was verbally told that the bid was rejected because it did not include service tax (of 12.36% on certain components of its offer). Later, when the company asked for a clarification, ESIC wrote back that all bids would have to include service tax, the executive added.
TCS then complained to the labour ministry saying that it believed its bid then was within the terms of the tender.
Earlier this month, when the second round tender bids were opened, Wipro emerged the lowest bidder with a quote of Rs 1,181 crore (37% less than its previous bid), TCS quoted Rs 1,530 crore (8.77% lower than its earlier bid) and Infosys Rs 1,791 crore (14.71% less).
The Wipro offer, according to TCS official too did not include service tax and should not have been considered going by the reasons for the rejection of the TCS bid in November.
This has, however, been denied by ESIC’s director general who the daily quotes as saying that in the second round, the bidders have included a wide range of taxes, which included service, custom, excise, sales, VAT (value added tax, octroi and any other leviable charges under the contract.
As they say, these are tough times where every penny counts, and so does every order
ESIC, a Union government agency that provides health insurance to over 10 million workers in the country, had invited bids for its Panchdeep project, designed to streamline registration filings and payouts at its 144 hospitals and 50 regional centres.
ESIC called for two tenders for the project within a span of three months after the first round was rejected by it. TCS was among the three bidders to the contract, where Wipro was selected winner by ESIC on the basis of the lowest bid, in the second round of the tender process earlier this month.
The first tender was floated in October last year and financial bids were opened in November. TCS, which reportedly offered to execute the project for Rs 1,677 crore, was the lowest bidder compared with a Rs 1,890 crore quote by Wipro and a Rs 2,100 crore bid made by Infosys Technologies Ltd.
However, ESIC decided to cancel that tender round because, as per a corporation official, who according to the publication did not want to be identified, the bids of Wipro and Infosys were found to be defective and the agency did not want to go with the lone bidder left, TCS, even though the Tata firm was the lowest bidder in the round.
But a senior TCS executive insists that that his company was verbally told that the bid was rejected because it did not include service tax (of 12.36% on certain components of its offer). Later, when the company asked for a clarification, ESIC wrote back that all bids would have to include service tax, the executive added.
TCS then complained to the labour ministry saying that it believed its bid then was within the terms of the tender.
Earlier this month, when the second round tender bids were opened, Wipro emerged the lowest bidder with a quote of Rs 1,181 crore (37% less than its previous bid), TCS quoted Rs 1,530 crore (8.77% lower than its earlier bid) and Infosys Rs 1,791 crore (14.71% less).
The Wipro offer, according to TCS official too did not include service tax and should not have been considered going by the reasons for the rejection of the TCS bid in November.
This has, however, been denied by ESIC’s director general who the daily quotes as saying that in the second round, the bidders have included a wide range of taxes, which included service, custom, excise, sales, VAT (value added tax, octroi and any other leviable charges under the contract.
As they say, these are tough times where every penny counts, and so does every order
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