India Post rejects bids of HCL Comnet, Wipro, Dimension Data and UTL for Cisco's IT upgradation equipment

 NEW DELHI: India's postal department has rejected the bids of four companies - HCL Comnet, Wipro, Dimension Data and UTL - to build an IT network that connects 30,000 post offices across the country, citing the 'obsolete equipment' being provided by Cisco, the technology partner for these bidders.

After the disqualifications, the department has shortlisted HP, IBM, TCS and Sify for its Rs 1,300-crore project aimed at modernisation of the IT infrastructure of post offices, two officials with direct knowledge of the development told ET. All these companies have opted for a combination of Juniper and HP to be their technological and hardware partners for the project. Cisco is the world's largest company in networking equipment, such as routers, and customer premise equipment.
               The contract will be awarded after the financial bids of these companies are examined. But the project could run into a hurdle as Cisco has approached the Communication & IT ministry against the rejection of bids of companies partnering with it. It is also learnt that Cisco has besieged the postal department not to open the financial bids of the shortlisted companies until its concerns are addressed.

Cisco denied to comment on a detailed questionnaire sent by ET. "As you would expect, several Cisco Partners participated in the RFP process. Any questions relating to that should be directed to the Department of Post," a Cisco India spokesperson said.

Department of Post officials who evaluated the bids said companies partnering with Cisco were rejected for three primary reasons. "As per Cisco's own public announcement in November 2010, a significant majority of the routers and switches it plans to supply its partners for this project, has reached their end-of-life. The manufacturing of these products would stop by 2012-end, the period when we will be awarding the contract. Besides, the software updates for these products will also end within two more years," a top official said.

This official also added that awarding the project to any company using Cisco hardware would compromise a key requirement of the project being scalable in the future due to obsolete equipment. Cisco did not reply to the allegations despite repeated attempts to reach them. Another official in the postal department explained that all bidders partnering Cisco had submitted an undertaking from the IT hardware major that it would support these products for seven years.

Currently Cisco equipment is installed in postal networks across 1318 locations. The successful bidder for the IT project is mandated to buy back this Cisco equipment and replace it with new equipment as per the tender document.
"While Cisco offered product support for seven years, it would have resulted in a major scam if the winner of the project is required to buy back existing Cisco equipment in 1318 locations and then install similar hardware in another 21,000 post offices," another postal department official added.

The IT networks contract is the second of the eight major projects that is being undertaken by India Post as part of its IT modernization initiative. Recently, Infosys had pipped Tata Consultancy Services (TCS) to bag India Post's 'rural information and communications technology (ICT) system integrator (SI)' contract, worth about Rs 100 crore. IT Consulting major Accenture is advising India Post on its new enterprise IT architecture. The consulting firm is also reengineering processes in India Post in one of the largest technology projects in the country. The project was rolled in 2009, but it has seen very slow momentum on the ground since then.

India Post which has the largest postal network in the world with about 5 lakh employees, had a negative cash flow of Rs 9,576 crore, last year.

Source : http://economictimes.indiatimes.com