The document critiques the practice of allowing government officials to conduct pre-shipment inspections (PSI) at suppliers' expense, arguing that these officials lack the necessary expertise and responsibility for the quality of inspected goods. It highlights numerous violations of Bangladesh's import policy, pointing out that PSI should be conducted by internationally recognized surveyors rather than unqualified officials. Furthermore, the practice is portrayed as a misuse of public funds, potentially leading to poor procurement outcomes.

1. PSI of govt purchase contrary to import policy
https://businesspostbd.com/post/25628
M S Siddiqui
28 Aug 2021 00:23:24 | Update: 28 Aug 2021 00:23:24
Different Ministries very often let their officials of different purchasing
authorities including few officials of the ministry to go abroad for pre-
shipment inspection (PSI) at the “expenses of suppliers” with the condition
that these inspection period as official duty and they will submit a report after
return about the inspection before shipment.
The government officials are not technical experts on specification and quality of
all goods and services but they inspect the consignments before shipment. They
don’t undertake the liability of supply of poor quality materials. This is an
opportunity of government officials to go abroad but without apparently any
liability.
In an inspection, supply of poor quality equipment has been surfaced with the
intervention of Trade Union Leaders. General Secretary of BIWTC Sramik Union
sent letters to shipping minister, shipping ministry’s parliamentary standing
committee Chairman, shipping secretary and BIWTC Chairman on November 23,
2020 demanding punishment against corrupt officials involved in procuring non-
functional fog lights. The authority became active upon such disclosure.
This dispute of supply of interior quality equipment of BIWTC went to court
against confiscation of security money of the supplier. It appears that government
is not holding the team of inspectors consisting of officials of ministry for the
supply of poor quality equipment. In this occasion, one official from the
Corporation and three officials from the shipping ministry went to USA for
inspection.

2. There is no provision in the Public Procurement Rule 2008 about PSI by officials
of purchasing authority or relevant ministry. As per Import policy order of
Bangladesh government, pre-shipment Inspection of goods for import in the public
sector for the value of a single item authorized for import is Tk 50 lac or above.
The importing department shall arrange Pre-shipment Inspection. The PSI shall be
entrusted to internationally reputed surveyors only.
In a few situation public sector agencies may however, be allowed to clear goods
on production of a certificate from their Administrative Ministry to the effect that
pre-shipment inspection requirement has been waived by that Ministry in respect
of the imported goods or that no pre-shipment in respect of a particular
consignment was considered necessary. Therefore, no such arrangement of
inspection by government or departmental officials but only by internationally
reputed surveyor as this is a technical job and need expert knowledge.
The purchasing authority insert a clause of PSI in the tender document to read as
“to ensure quality, quantity, packing, marking, and loading, etc, as per purchase
order, inspection of the imported goods shall be arranged at suppliers cost prior to
shipment through inspection officials. Such a rule of tender is contrary to the
Import Policy order of the government.
According to procurement policy, the purchaser shall have the right to test the
goods to confirm their conformity to the contract specifications. The technical
specifications of the materials shall specify what tests the purchaser requires and
where they are to be conducted. The supplier shall at its own expense and at no
cost to the purchaser, carry out all such tests of the goods and related services as
are specified in the Contract. The purchaser may reject any goods or any part
thereof that fail to pass any test and/or inspection or do not conform to the
specifications. The supplier shall either rectify or replace such rejected goods or
parts thereof or make alterations necessary to meet the specifications at no cost to
the purchaser, and shall repeat the test and/or inspection, at no cost to the
purchaser, upon giving a reasonable advance notice.
As of global practice, the standard pre-shipment practice to inspect and keep mark
of inspection and usually put the material/equipment into the containers and lock
and seal the container. During the unloading of the consignment from the same
inspectors will present at the port to open the seal and lock. There is no such policy
or guideline of PSI of government procurement in Bangladesh.

3. In case of Bangladesh, the high officials do not remain present during loading of
consignment in the container and not personally put seal on the lock. They never
go to the place of opening of the container either at the port or at the site of the
project. The PSI is meaningless without presence of inspectors or their
representative during loading and unloading of the consignment from the
container. The visiting high officials only give a report to the ministry. The process
has many loopholes for manipulations.
There is an argument that the visit cost nothing to the government but while the
suppliers offer free trips these are not free as any such expenses are included in the
cost of products as contingency expenses by the suppliers usually for corrupt
countries.
The procurement process has rule for determination of specification of the
products, scrutiny of technical offer and PSI of the products. The preparation of
specification and evaluation of technical documents for international procurements
vested to the experts but the PSI in other country is reserve for the non-technical
high officials. The procurement rule also allowed outsourcing of external export to
support the procurement.
On the other hand, the PSI needs very specialised knowledge and there are many
reputed local, regional and multinational companies. They usually don’t travel to
other countries to avoid the cost. The surveyor(s) inspect the consignment before
shipment and their representative(s) in the destination country present personally
during opening of the container to confirm the intact seal and lock to ensure the
delivery of inspected materials. The inspecting company also liable for quality and
quantity of the consignment.
In case of Bangladesh government purchase, inspectors are not responsible for the
wrong delivery of the consignment due to lack of proper inspection. The
purchasing authority usually shift the responsibility on the supplier despite having
inspection report of high government officials.
The inspection by government official is against the Import Policy Order as well as
it is expensive for the nation and not serving the real purpose. The inspectors are
not liable for any incidence of wrong delivery. According to a research article on
purchase of LGED - “In many cases, project officials and ministry officials enjoy
the foreign trips in the name of PSI which is simply misuse of public fund”. The
best value for money is not always achieved in case of procuring goods in the
public sector organizations.

4. The writer is a legal economist