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					SNEA(I)/CMD/19/5-09                      Dated 4th May,09.


Sh. Kuldeep Goyal,
Corporate office,
New Delhi - 110001

Subject: Awarding of multi crore contracts regarding implementation of “ERP” project in
BSNL to M/s SAP through another system integrator( SI ), black listed Software
Company involved in false billing at Gujarat Circle— Old wine in new bottles.

Respected Sir,

With reference to the aforementioned issue, we want to apprise your good self of following facts
necessitating your immediate kind intervention and a thorough probe into the circumstances
which led and prompted BSNL Management to award contract for implementation of
prestigious project for implementation of “ERP” in BSNL to aforesaid software company M/s
SAP, on which already penalty of about 4.5 crores has been imposed for wrong annual
technical support charges for software provided by M/s SAP by IT unit of Gujarat Circle for
breach of contract and violation of contractual commitments regarding false billing of “ERP”
pilot project in Gujarat Circle of BSNL.

A) Gujarat Unit of our Association raised issues regarding false billing by “SISL” for
implementation of ERP Pilot project in Gujarat Circle. M/s “SAP” was software provider to
“SISL” for the said pilot project. Significant and crucial issues consistently focused by the
Gujarat Unit of our Association were finally vindicated in their entirety when the Vigilance Unit
of Gujarat Circle in coordination with BSNLCO after thorough investigation observed
irregularities of a serious nature on the part of M/s “SAP” in the matter of billing and
ultimately imposed a penalty of Rs 4.5 crores on “SISL” vide letter no
( IT/ERP/SW/Complt/Part IV/3 dated 25th October 2008 (Copy of the same is attached
H/W ).

B) After detecting violations of a serious nature and imposing a fine of Rs 4.5 crores for total
false billing in respect of “ERP” pilot project in Gujarat, it is intriguing to know that BSNL
Management has decided to award the contract to the same soft provider i.e SAP for “ERP”
project in BSNL across the Country. What is incomprehensible and baffling is under what
circumstances has IT wing of BSNL overlooked and ignored crucial and startling fact of
imposition of penalty of Rs 4.5 crores on “SISL” for serious violations in matter of billing
regarding pilot “ERP” project in Gujarat while finalizing tender for Rs 300 crores for
implementation of “ERP” on Country wide basis in BSNL and awarding the contract to
same software provider. In the instant case, M/s “SAP”, which was software provider to
“SISL” with regard to pilot project in Gujarat, continues to be the software provider to
another SI with respect to implementation of “ERP” project in BSNL on an all India basis.
The only difference between “ERP” pilot project of Gujarat and “ERP” project in BSNL
across the Country is change of system integrator. Established fact of imposing a
penalty of Rs 4.5 crores on M/s SAP by IT wing of Gujarat Circle for levying unnecessary
billing charges for providing Annual Technical Support of software in violation of agreed
terms of contract in respect of ERP pilot project Gujarat should have been the exclusive
reason for IT wing of BSNL to disqualify any Company whose software provider is M/s

2) Generally ERP solutions from multinationals like SAP and other software providers are hired
keeping in mind the requirements of the organization as a whole. In BSNL, good number of
software packages like HR, MIS, Sanchar soft, Inventory Management, etc. are already in
existence and running quite smoothly. Besides, highly innovative and prestigious CDR project
has just reached its optimum stage of implementation on an all India basis. Thus purchase of
complete package of “SAP”, regardless of our actual needs, and ignoring our existing
operational software, will surely result in huge and unwarranted financial burden on BSNL. On
the contrary, we very strongly feel that, instead of purchasing complete software, we should
consider purchasing on “Ala- crate” basis by excluding all such software packages which are
either working successfully at the moment or are innovatively being developed by IT Pune wing
and are in the process of implementation.

 (3) The entire justification for introducing “ERP” pilot project in Gujarat was to ensure that
paperless activity was brought into existence in Gujarat Circle. Introduction of paperless activity
would have led to saving of considerable time and infrastructure, eventually resulting in
considerable saving. That was the entire objective behind introducing “ERP” pilot project in
Gujarat. But the ground reality today is that, despite six years of the pilot project being launched
in Gujarat, still “PAPER LESS” working has not been achieved in Gujarat Circle. In case, we
have not been able to achieve the desired goal in pilot project for six long years, and when it
has been clearly established that M/s SAP deliberately went in for exorbitant false billing, for
which a penalty of Rs 4.5 cores has been already imposed on it, we are unable to understand
as to why IT wing of BSNL is in favour of going ahead with the same blacklisted software
provider i.e M/s SAP for introducing “ERP” on an all India basis. This crucial fact cannot be

Thus keeping critical and glaring aforesaid facts into consideration, we seek your kind personal
intervention on such an important matter by getting the whole issue thoroughly investigated. We
are quite confident that your good self will fully understand the seriousness and gravity of the
situation and appreciate our concern with regard to protecting the resources of our beloved
Company from being squandered away. We also look forward to receiving important inputs from
us, particularly Gujarat Unit of our Association, during the course of investigations so as to fully
corroborate the facts mentioned by us vis-à-vis the irregularities of M/s SAP in levying exorbitant
billing charges in violation of agreed terms while implementing pilot “ERP” project in Gujarat. The
matter, we are sure, shall receive your kind priority.

With kind regards,

Sincerely yours,

( G.L.Jogi )

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All members of BSNL/board

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