CAG's CWG Audit Report - Chapter - 13 (2011)

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The Sport Functional Area was responsible for organisation of sporting events,maintenance of results records, and presentation ceremonies; it was also assigned theresponsibility of purchase of sporting equipment.There were several deficiencies in the procurement of sports equipment, such as notfollowing global tendering procedures and purchases on single tender basis. We alsofound purchase of a boxing ring with older specifications, half the badminton shuttlecockscrossing the shelf life even before the events, and huge quantities of procured equipmentlying unused in stores, raising doubts on the reasonableness of the assessment ofrequirements (in particular, trampoline sets procured for an event not scheduled in theGames).The procedures followed for hiring Shri Greg Bowman and his company, Great Big Events(GBE)I for a multiplicity of contracts relating to sports presentation ceremonies werequestionable. One contract wasl in effect, de-activated in September 20101 and re-awarded at exorbitant rates to GBE. We also noticed fraudulent payments to GBEfor falseclaims of personnel assignments (when they did not even visit lndia], which were certifiedby OC officials.Audio video equipment for sports presentations were hired at exorbitant rates I through ahighly flawed process. Our enquiries revealed that the quoted prices for purchase of thesame equipment was about half the hiring cost.

13.1 OverviewDuring the Games, 272 events in 17sporting disciples were to be organized. TheSports Functional Area was responsible fororganisation of each event including itsregulations and conduct; maintenance ofthe timing, scoring and results records; thepresentation ceremonies andannouncements.

13.2 Procurement of SportsEquipment

13.2.1 OverviewAfter venue owners indicated their lack ofexpertise in procurement of sportingequipment, MYASassigned the overallresponsibility for procuring sportsequipment for both competition andtraining venues in October 2009 to DC andreleased a budget of Rs. 25 crores in May2010, in addition to GC's existing sanctionedbudget of Rs. 5.42 crores.

Performance Audit Report on XIX Commonwealth Games (CWG-2010) 205


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We do not find sufficient evidence thatrequirement assessment for sportsequipment was done with due diligence.Although OC stated that after initial listingof items, comments were invited from thenational sports federations, we found thatmost federations did not make anycomments. Thus, the procurements - boththe items and brands, as well as quantities -were effectively decided by the OC, whichapparently had no expertise in this area.OC awarded 93 contracts for procurementof sports equipments between February2010 to September 2010 for a total amountof Rs27.22 crore. We found severaldeficiencies in the procurement: Global tendering procedure was not

followed at all; Performance guarantee was notobtained from the successful bidders in

any case;

In 5 cases, supply orders of Rs3.95 crorewere issued even before approval of thecompetent authority(EMC);

In 19 cases, purchases worth Rs.3.17crore were made on single tender basis.Interestingly, in 14 such cases, the singletenderer was the same agency i.e.Swatantra Stores, Patiala'. In caseswhere only one tender was received/found eligible, the option of re-tendering was not exercised by OC,despite reasonable time being available.

While processing the award forpurchase of boxing equipment, OCirregularly shifted from item wiseprocessing of bids to processing theprocurement as a single package aftertechnical qualifications of the biddershad been evaluated and commercial

Which is essentially a sports equipment store and notmanufacturer

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bids opened. Consequently, thepurchase order was placed to a partywho was not the L1 bidder for all items.

Selected instances of irregularities inprocurement are detailed below:

13.2.2 Purchase of Athletic EquipmentOut of the five IAAF2approved companieswho bid for this work, three did not submitthe usage certificates" from theinternational federation as required in theRFQand the only qualified bid of DIMASports was opened in March 2010. After aninexplicable delay of 3 months, the supplyorder was issued in June 2010 to the firm ata cost of Rs.2.78 crore. In July 2010 DIMA

International Association of Athletic FederationsUsage certificate is given by the InternationalFederation for the usage of any equipment in anyprevious international event.

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expressed their inability to deliver the itemsin time due to vacations in Europe. OCmaintained that the delays were on accountof their waiting for other bidders to give therequired usage certificates. We, however,noticed that in August 2010, after cancellingthe earlier supply order, OC divided theorder and procured the equipment athigher rates from UCSInc(USA) and NordicSports AB(Sweden) which resulted inadditional expenditure of Rs.0.95 crore.Surprisingly, both the companies neversubmitted any usage certificate.

13.2.3 Purchase of Boxing Equipment

The International Boxing Federationchanged its boxing ring specifications inJanuary 2010 from 7.5 m x 7.5 m to 7.8 m x7.8 m for all AlBA approved events". OC,however, ordered 2 competition boxing

The new specifications were notified 2 years in advance;existing rings with old specifications were consideredvalid only till December 2010.



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rings for Rs.0.18 crore in February and June2010 with the old specification.Significantly, the evaluation committeedealing with the purchase of boxing ringsdid not have any member from the nationalboxing federation, or sportspersonsassociated with boxing. OC stated thatthough their specifications were incorrect,in one case the supplier changed it to newspecification. The other boxing ring ishowever, unfit for use in AlBA-approvedevents.

13.2.4 Purchase of shuttlecocksOf the 2000 dozen shuttlecocks purchasedfor badminton events, 1000 dozenshuttlecocks had crossed the shelf lifes evenbefore the events were held. Significantly,1392 dozen shuttlecocks (i.e. 68 per cent ofthe procurement, including the ones whichhad crossed the shelf life) valuing Rs0.16crore remained unutilised.Further, while OC placed an order withSunrise & Company for providing 300 dozenof Speed-l, 400 dozen of Speed-2 & 300dozen of Speed-3 i.e. total 1000 dozen

Yonex shuttle cocks, the vendor supplied1000 dozen of shuttle cocks of only twospeeds ie. speed 1 & 2. OC accepted thesupply, though it was at variance with thesupply order.13.2.5 Delayed supply of equipment for

test events and trainingImported sporting equipment forgymnastics and aquatics worth Rs.4.56crore and Rs.1.08 crore respectively wasrequired to be delivered before the testevents scheduled in July-August 2010, butwas delivered only in August-September2010. This led to cancellation of test eventsin the disciplines of synchronised swimmingand high board diving. Also, in the absenceof the new equipment, some equipmenthad to be transported from Pune andRanch!".Four training boxing rings (Rs 0.35 crore)ordered for the practice session of theIndian team scheduled from 23 Septemberto 3 October 2010, were received only on29 September 2010 and could be installedjust one day before the events began.

as prescribed under the standards of the IBFOut of the equipment procured for CYG-2008,Pune and National Games 2011, Ranchi



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13.3 Procured equipment lyingunused

We found huge quantities of sportsequipment lying unused at various locationseven after the Games had concluded,raising doubts on the reasonableness of theassessment of requirements. Someinstances are given below: Sports equipment worth Rs1.35 crore

(Details in Annex 14.1), was lyingunpacked in the ITPO store as ofNovember 2010;

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Out of 17 venues, equipment usagerecords of only 7 venues were received.In these venues, sports equipmentworth Rs0.93 crore (Details in Annex14.2) was lying fully unused.

10 trampoline sets procured for aquaticsat a cost of Rs0.34 crore were keptunused at the ITPO store.

2 trampoline sets procured forgymnastics at a cost of Rs0.11 crorewere procured wastefully, as there wasno trampoline event scheduled in theGames. These were lying packed in theIG Stadium store throughout the Games.

Non-use of trampoline during CWG 2010

16 storage trolleys, which were neitherin the list approved by MYAS norrequested by the Sporting Federation,were procured at a cost of Rs.0.25 croreas part of aquatic equipment, but werenever made available at the Dr. SPMAquatics Complex, the aquatics venue.Eight of these trolleys were kept at theGames Village and the rest remained inthe store.

Use of trampoline duringBeijing Olympic 2008

13.4 Sports PresentationCeremonies

13.4.1 OverviewSports presentation is the showcasing of asport for venue spectators and broadcastaudiences. This is the ceremony where themedal winners are presented with medalsin recognition of their achievement andtheir countries are honoured by raising theirnational flags and playing the nationalanthem of the gold medal winners.



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DC incurred a total expenditure of Rs. 13.62crare for sports presentation:

DC awarded several contracts to Shri GregBowman and his company, Great Big Events(GBE), as summarised below.

Rs 0.19 crare on hiring of sportspresentation managers and announcers;and Rs5.68 crare on Shri Greg Bowman/

Great Big Events (GBE); Rs1.00 crare for miscellaneous expenseson GBEconsultants. Rs 6.75 crare on hiring of audio video

equipment;

Table 13.1 - Contracts awarded to Shri Greg Bowman and Great Big EventsVendor Work Contract Amount Actually Paid(Rs. in Crore)

October Greg Bowman Sports presentation USD 17,200 per 0.772009 consultant monthJanuary Great Big Events Sports presentation USD502,000 1.472010 core teamJuly 2010 Great Big Events Supply of Bidding

sports presentation cancelledmanagers (17) andvictory ceremonyproducers (3)

September Great Big Events Sports presentation USD850,000 3.442010 workshop & BasicMusic/Video Pack

Service Agreement



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We found that these contracts wereawarded and managed by OC in completedisregard of the norms of propriety andwithout safeguarding its financial interests.13.4.2 Hiring of Greg Bowman and Great

Big EventsIn October 2009, OC hired Shri GregBowman as consultant for sportspresentation on nomination basis. He wasoverall in-charge for the delivery of thesports presentation programme across allcompetition Venues.Shri Bowman was also responsible forselecting the Sports Presentation Team.Accordingly, he hired his own company,Great Big Events (GBE) on nomination basisin January 2010 for a period of 10 months ata cost of USD502000 (Rs. 2.26 crore) forassisting the consultant (Shri Bowman) andfor the creation, deployment and delivery ofthe Sports Presentation programmes for theGames.In July 2010, OC advertised for the "supplyof sports presentation manager (17) andvictory ceremony producers (3)." The twotenders received were from Great BigEvents and Fun and Games Limited, whichwas submitted by Shri Radley Foxon, an

Chapter 13 - Sports

employee of GBE. Shri Greg Bowman didnot inform OC of this interconnection andadvised OC to accept the bid of GBE.Thisbid was however cancelled as both bidswere found to be unsealed.Seven months into the January 2010contract and after receiving payments of Rs1.47 crore (65 per cent), GBE sent a noticeof termination in August 2010 to OC. OC didnot terminate this contract, but initiated anEOIfor a new contract for "supply of sportpresentation managers and victoryceremony producer", although the contractwas awarded for a different scope of work'.The entire process of bidding wasmiraculously completed within 16 days asfollows:

Table 13.2 - Award ojsecond contract to GBE

1 September2010

Issue of EOI(in newspaper)

7 September Last date of2010 receiving EOI7 September Opening of single bid2010 from GBE12 September Negotiations with GBE2010

13 September Approval of Fast Track2010 Committee16 September New contract signed2010 between OC and GBE

After hurried negotiations and approvals ofthe Fast Track Committee on 13 September2010, on 16 September 2010 OC once againentered into an agreement with GBEat a

Sports Presentat ion Workshop and Basic Music/VideoPack Service Agreement



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total fee of US$ 850000 for 29 days. Thecost of this contract was absolutelyunjustified as it essentially amounted to anenormous upward revision of rates, afterpaying Rs 1.47 crore under the earliercontract.Further, till August 2010, despiteprogressing 70 percent on timeline andrelease of 65 percent of the amountcontracted earlier, GBE had neither assistedin the recruitment of sports personnel nortrained them before the test events as wasrequired under the January 2010 contract.We find that, GC's negotiations for the re-hiring of GBEwere highly questionable, as,besides the exorbitant rates, the scope ofwork included items already done under theinitial contract by GBEor by OC on theirown e.g. Conducting interviews for Indian

announcers - 42 of the 55 announcersfinally selected were engaged prior tosigning of the second contract.

Hiring of presentation personnel - 30sports presentation personnel werealready engaged directly by 0C.

OC also failed to utilise the services of GBEas per the contract. In early September2010, OC was processing the award oftender for hiring of audio/video equipmentand even before GBEcould finalise thevenue wise requirements, tendering wasalready done. It would appear that the OCofficials handling the award of the contractallowed unwarranted expansion of scope ofwork to justify payments of substantialsums of Government money.

Fraudulent payment toGreat Big Events (GBE)As per the January 2010 contract, GBEwas to assign 9 personnel for contractrelated activities. While three of themwere to stay in India for the entireduration of 10 months, the other six hadto stay for specified number of days. Feeswere accordingly prescribed on monthlyand daily basis for these two categories.We ascertained that the three GBEexecutives required to stay in India didnot do so for the entire stipulated periodas one executive did not even visit Indiaand was paid @ 7500 USDper month for7 months. OC officials actively colludedby duly certifying their payment invoicesand work, despite their absence fromIndia. Shri ASV Prasad, JOG(Sports) evencertified" the presence of one executiveMs. Kate Campbell", who never visitedIndia.The entire claim for the periods that theexecutives were not available in Indiacould be termed as fraudulent. However,even on a proportionate basis, suchfraudulent payments amounted toRs40.13 lakh (USD89186).

While OC indicated that they would makedeductions from the remaining 10 percentpayment, the balance with OC would notcover the excess payment.

The attendance sheet for the month of May and June2010 was authenticated by DOG (Sports) andcountersigned by JOG (Sports) stating that KateCampbell was presentfull time in India.Incidentally, we found a draft agreement signed by GregBowmen (for GBE) where in place of Kate Campbell, thename of Ms. Kavita Santa kay (who was an employee ofDC til l 2 weeks after this contract was signed with GBE)is mentioned.



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GBE's performance under the contractentered in September 2010 was alsodeficient: Against a commitment to conduct atleast six training workshops with sports

presentation managers/ assistants andannouncer, GBEconducted only fourworkshops.

GBEwas to provide audio systems,audio production systems, videoproduction equipment andcommunication equipment at allvenues, including nine Instant Replaymachines at cost of USD 2595310.Whilethe advance payment to GBEwasincreased to 50 percent on this pretext,there was no evidence that theyprovided these equipments. Instead, OChired these equipments separately at acost of Rs6.75 crore.

13.4.3 Exorbitant Hiring of Audio videoEquipment for Sports presentation:

Despite hiring expensive consultants forsports presentation, OC realised itsrequirement for renting of audio and videoequipment only on 4 September 2010,when a tender was floated. The contractwas awarded to Modern Stage Pvt. Ltd at acost of Rs6.75 crore. We found the awardprocess to be flawed: The newspaper advertisement only gave

notice of a detailed advertisement onthe OC's website which was notavailable till 9 September 2010. Thewebsite advertisement was availableonly for one day (10 September 2010)and the technical bid was opened on 11

10 For this, f reight charges @ USD 15000 were also paid tothem.

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September 2010. Interestingly, thenewspaper advertisement did not evenmention whether the equipments are tobe hired or purchased.

OC added a restrictive clause ofexperience of CWG, Asian, Olympics orWorld Mega Sports Competition, thusensuring even less competition.

Only two responses were received; afternegotiations, the contract was awardedat a total cost of Rs6.75 crore.

Further, the vendor raised an additional billfor Rs1.28 crore, on account of a claim ofsupplying additional equipment (afterkeeping GBE informed); OC had noknowledge of this additional supply.

To evaluate the reasonableness of thehire charges, we invited quotations forpurchase of the audio, videoequipments hired by the OCfrom theModern Stage Pvt. Ltd. In response, twoquotations were received. The quotedprice for purchase was around Rs. 3.5crore, as opposed the hire charges of Rs6.75 crore paid by OC. Clearly, the hiringprocess was non-transparent and thecharges exorbitant.



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CAG's CWG Audit Report - Chapter - 13 (2011)

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