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Army Probe On Low Quality Food Scam

Losses running into millions

by Sujith Mangala De Silva

The bidding document

Sri Lanka Army Special Investigations Unit has initiated an investigation regarding the allegations levelled against the main food supplier of the Army for providing low quality food items unsuitable for human consumption contrary to the standard rations menu.

According to reports the total loss incurred by the government due to the continued supply of low quality food items for the army at a higher price for several years, amounts to millions of rupees.

Under the agreement entered into by the Sri Lanka Army with all its food suppliers, the standard rations menu for the year 2016 should strictly consist of SLS 946;1991 standard vegetable oil. At present only the Sunflower seed oil has been offered such a certificate of standard. However, instead of providing the standard Sunflower seed oil, since January 2016 to December 2016, the accused supplier has supplied the Army with a substandard Palm Oil (SLS 720; 2001) and Palm Kernel Oil (SLS 862; 1989), reports say.

In 2016, the Army has ordered 389,263 litres of Sunflower Seed Oil from this company to meets its consumption demand. Although one litre of Sunflower Seed Oil costs Rs. 450 in the open market, the accused company has presented quotations claiming that they could provide it for Rs. 205. But in reality, they have provided a substitute under the lower price. The suspicions have arisen when the officials had wondered how this company could provide an expensive food item for a low cost. Accordingly the Special Investigations Squad has initiated an investigation on the matter.

According to the standard tender procedure, the bidders cannot place bids with impossibly cheaper amounts. These restrictions have been imposed to prevent suppliers from providing low quality food unsuitable for human consumption sugarcoated with y low prices.

Meanwhile under the 2014-2015 contract year, the Army had entered into a contract with a supplier to provide chicken for their rations. In the contract, the substitution that had been agreed upon by the parties in case of a shortage of chicken is mutton. Accordingly, if in case a supplier provides mutton instead of chicken, he should be compensated for the prices of chicken. However, since April 2015 to October 2015, the supplier company has violated this above agreement by providing prawns as a substitute for chicken. Under ‘Special conditions No. 2’ of the Tender document, if in case the supplier provides a food item that is of higher value than the primary item, he should be compensated only under the charges for the primary food item. Hence, by law, the supplier, despite providing prawns, should be paid with the rates of chicken. However, violating these conditions, the said company has been able to clear the bills for a higher rate by providing expensive prawns instead of chicken, resulting in a monthly loss of Rs. 37,000,000 to the state.

Although the approved price of a kilo of chicken is Rs. 298-310, the company has been able to acquire compensation by providing prawns at a rate of Rs. 360 per kg. Hence it has been problematic as to how this company was able to provide substandard food items to the Army by violating the agreed ration menus. Doubts have been cast as to who had allowed this company to provide an expensive substitute without the approval of the Technical Evaluation Committee of the tender board and how it was able to obtain high compensation.

According to some officers in the Army, this million rupee scam has to be investigated to find out the culprits so that the government could claim damages from the company for the losses.

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