French company IDEMIA was awarded a government contract for the National Identity Management Information System without having to submit its performance security bond in full.

The government, late Wednesday night, had signed a $16 million (approximately Rs1.73 billion) contract to upgrade and manage the national identity card project with IDEMIA, without calling for a competitive bidding process, contravening the existing public procurement laws.

Despite IDEMIA failing to submit a security bond for the full term of the contract, it was presented with the contract and given until July 24 to submit the bond in full, according to documents obtained by the Post. According to public procurement laws, IDEMIA should have submitted the security bond in full, for the entire term of the contract, upon signing the contract.

However, after instructions from Home Secretary Prem Kumar Rai, the Department of National ID and Civil Registration signed the contract with IDEMIA, according to the minutes of Wednesday’s meeting, a copy of which was also obtained by the Post.

The agreement was signed on behalf of the government by Dipak Kaphle, director-general of the Department of National ID and Civil Registration, and Shiva Nath Poudel, under-secretary at the Home Ministry, among others. For IDEMIA, Tim Ferris, senior vice president for Asia-Pacific, had signed the contract on June 30 and assigned Wee Liang Tan, IDEMIA regional program director for Asia-Pacific and other officials to seal the deal on Wednesday.

IDEMIA furnished a security deposit valid till August 1, 2022, but the full term of the project is valid up to August 1, 2023.

“After IDEMIA furnished the performance securities for 24 months, we told them to furnish a new security bond valid for 36 months,” said Shiva Raj Joshi, director of the Department of National ID and Civil Registration. “We have given them until July 24 to submit the full bond.”

But according to Article 21 of the Public Procurement Act-2007, bidder awarded contracts must submit the security amount in full along with the bid.

The minutes of the meeting states, “The consultant has submitted the amendment of the full performance securities for both currencies so that the performance securities shall be valid till 01 August, 2022 and the performance security for personalization upgradation [EUR 16,397.27] shall be valid for 01 August, 2023. The consultant shall submit the amended performance securities as mentioned above within 24 July, 2019.”

Home Ministry officials also say that the government’s rationale for providing IDEMIA with the contract without bidding—that the new project is simply a continuation of the pilot project for which IDEMIA was responsible—is faulty. The previous project was a pilot project to produce 110,000 national identity cards but this is an entirely new project, officials closely monitoring the tender process told the Post. The new project will install all software, hardware and other personalisation works for the national identity management system in all 77 districts.

When asked why the government had breached several provisions in the Public Procurement Act, Joshi, the director, said that they had signed the contract as per the Cabinet’s decision.

A public notice issued by the department does not mention the cost of the contract or the duration of its validity.