How Govt Signed ‘Real Time’ Contract?
The Government of the Islamic Republic of Afghanistan on 28th Feb 2019 awarded an $11 Million project to an American company named Bustos Group LLC (www.thebustosgroup.com) led by Mr. Joshua Bustos in presence of H.E Dr. Ashraf Ghani, President of the Islamic Republic of Afghanistan, the Minister of Communications and IT and a number of other high level government officials to develop and implement the Real Time Data Management Systems (RTDMS) which is a system that will connect with the billing systems of all telecom companies and reconcile the 10% Telecom service fees collected from the GSM subscribers and ensure a transparency in the collection of the taxes and properly report the revenues from this tax to the government. The interesting part is that they got their US business license a day after the contract award (https://www.nvsilverflume.gov/businessSearch, search for The Bustos Group) in the state of Nevada, United States.
While this is a highly technical project which requires special expertise in implementation, however, the company awarded lack the necessary skills and experience to execute this project. Bustos Group LLC, claiming to be a US-based company does not seem to have a track record of implementing any IT or Telecom projects in the US or any other countries it claims. The CEO of the company is the ex-CEO of Safi Airways, a national airline that no more operates in Afghanistan. Sources say the company went out of business during the time Mr. Bustos was working for it.
RTDMS is a long overdue project planned to be implemented three and a half years after it was first envisioned in 2015 when the Minister of Finance proposed the introduction of telecom services fee in the cabinet meeting in order to boost the national revenues. Since then the question of guaranteeing the transparency of collecting this tax remained unanswered. The Ministry of Finance, Ministry of Communications and IT and the Telecom Regulatory Authority failed to put in place an automated system which should meet the global standards of revenue assurance and fraud detection of Telecom revenues. In 2018, NPA released an expression of interest and only four companies submitted their interest and were shortlisted for the RFP round and were invited to bid for the project:
1. Arraxxee SAS Paris (lead) In association with Paradigm Capital and My ICT (Sub-Consultant), a local IT company (a France-based company)
2. Vanrise Solutions S.A.L Lebanon (a Lebanon-based company)
3. PT Astra Graphia Information Technology (AGIT) (an Indonesia-based company)
4. Prologix LLC (lead) in association with Subex (a UAE-based company)
Sources say that the National Procurement Authority (NP) evaluated technical proposal of the abovementioned companies but before evaluating their financial proposals, the tender was canceled for unknown reasons. Vanrise Solutions and Subex Services are both companies with past experience in Telecom and revenue management. It is said that the price proposal for these two companies was in the range of $7 to $8 million and the budget allocated for the project was between $6 to $8 million. Comparing these companies with Bustos Group LLC, one cannot come up with any logical reason on why the contract was awarded at $11 million to a company who was not even in the list and was single sourced. This raises many questions that need to be asked.
In a Facebook statement, the Ministry of Communications and IT released a statement trying to justify their decision on awarding the contract to the Bustos Group LLC after public outcry about lack of transparency in the contract award. The only justification that is worth considering is the $18 million price given by other companies for the development of this system compared to the $11 million value contracted to Bustos Group LLC. This is an utter lie as the financial proposals of the companies who bid were never opened. Furthermore, a copy of Bustos Group’s past experience was posted in the same Facebook statement which included a task carried out by the company for USAID Promote Project in 2015 which is the year when PROMOTE project was not even started yet and Bustos Group LLC never existed.
We believe there is a complete lack of transparency on the award of this contract and having worked on large scale IT projects in the country for the past 14 years, I see this contract value a complete rip-off of the government’s treasury and public funds and as a citizen of this country and the President of Afghanistan’s IT Companies Association (AITCA), I have concerns over this.
Now let us look at the capabilities of the company who was awarded the project.
1. Bustos Group LLC registered in the state of Nevada, US a day after the contract award is not an IT company and as mentioned in their website, they specialize in Aviation sector while having zero experience in even a single simple IT project implementation. Having this company as a prime contractor for this project means there is certainly a favor done to the company. The company’s Facebook page which seemed to be created to post this contract award notice only and when social media users noticed that, they removed their Facebook page and created a new one, still empty! The company’s website was nothing more than a website template installed with dummy information and since yesterday, the company’s website is not accessible as well.
2. It is said that LATRO Services who is in the business of SIM card fraud detection is the sub-contractor for this project is expected to do all the job. They are currently working with GSM operators in Afghanistan such as Roshan, AWCC and others in the area of SIM fraud detection or more simply SIM Box detections in Afghanistan. Why wasn’t this contract directly awarded to LATRO Services who will be doing the job?
As per the RFP and the Procurement laws of Afghanistan, the experience of two or more than two companies are counted as single experience only if they apply as a registered joint venture and even in that arrangement the lead in the JV should fulfill 60% of the criteria set in the RFP. While in the case of sub-consult, their experience carries zero weightage. However, in the case of Bustos/Sub-Consult LATRO, MCIT has based all their justification on LATRO experience which is completely against procurement laws of the country. If that was the case for LATRO to perform the services, why was The Bustos Group LLC brought into this?
What made the government select a prime contractor to carry out such an important project with no IT and telecom experience, in a single source procurement is a big question in the sector that has raised a lot of eyebrows!
The public demands H.E President Ghani to immediately suspend the project and carry out an investigation into the award of the project and ensure proper justifications are given for the contract award. This also raises the question on the procurement entities such as NPA and involved ministries such as Ministry of Communications & IT, Ministry of Economy and Ministry of Finance on how recklessly this project was awarded without a due diligence process.
We trust President Ghani and fully believe that he will ensure all culprits behind this deal are identified and suspended from their jobs and introduced to the law enforcement agencies for mismanagement of public funds and possible corruption, some maybe senior government officials close to the president.
While writing this report, I have been advised by a number of friends that my article will upset a lot of high-level government officials involved that could potentially harm me and my business, however, the harm that the corruption in this project will do to my country is much higher than the harm that I may suffer as a result of this. Furthermore, my strong belief that H.E President Ghani is an honest and clean person who believes in the fight against corruption gives me the strength to stand up and raise my voice.