Nepal’s biometric passport contract awarded to Veridos, Mühlbauer

Nepal’s biometric passport system has a new primary supplier. German firms Mühlbauer and Veridos have successfully outbid incumbent identity provider Idemia Smart Identity in what The Himalayan Times calls “a surprising upset” – and the decision has elicited a formal complaint from the French firm.

Idemia has provided Nepal with biometric passports for 15 years, and was expected to hold on to the contract thanks to “structural obstacles allegedly designed to favor the incumbent.” Five companies submitted bids for the biometric passport contract, which, per the country’s procurement law, is awarded to the lowest bidder.

A breakdown of the numbers released by the Department of Passports (DOP) shows Mühlbauer and Veridos undercutting Idemia across two packages.

The first, for enrollment systems and IT infrastructure, saw Mühlbauer submit a bid of $11.6 million, against a $17.5 million bid from Idemia. Per the Times, the disparity remained “even after applying a controversial cross-discount clause widely viewed by procurement observers as tailored to benefit Idemia.”

The second package, for the provision of 6.4 million biometric passport booklets, including personalisation, quality control, and packaging, saw Veridos post the lowest compliant bid at $43.95 million, against a bid of $ 50.16 million from Idemia (discounted to $43.76 million for the dual-package bid).

Mühlbauer also submitted a proposal at $46.44 million – but it was disqualified for an administrative failure to submit an offer letter.

The combined cost for Nepal comes to $55.11 million – still $1.7 million lower than Idemia’s cross-discounted package total of $56.80 million.

One of the largest cost differences was in booklet pricing. In a previous variation order that did not have a competitive bidding process, Idemia charged the government $10.13. The new tender price was higher, at $10.57 – or, with discounts, $8.87 per booklet.

Veridas quotes a price of $6.88. Combined with the Muehlbauer cost, the total is $8.61 per booklet, still lower than Idemia’s discounted rate.

‘Critical administrative and technical noncompliance’ led to dismissal: Idemia

Idemia has responded by launching a complaint with the DOP. The Kathmandu Post quotes an email from the firm, which says it is “convinced that the intention to award these contracts to the selected companies is unrightfully due to critical administrative and technical non-compliance.”

It reportedly claims that winning bidders failed to submit a list of technical items required by the tender documents.

But it goes beyond document filing: rival bidders say the evaluation process was swayed by pressure on the committee to prioritize certain companies. And Idemia suggests that the nefarious exploitation of currency exchange rates may have been used to tank its bid: “Idemia Smart Identity emphasises that depending on the exchange rate used to convert the financial bids into Nepalese rupees (NPR), the Government of Nepal could achieve significant cost savings by selecting Idemia Smart Identity’s bid.”

However, Idemia has itself faced similar accusations. A recent piece in the Nepal News accuses the DOP of breaching public procurement laws by “unlawfully intending to award a multi-billion-rupee e-passport tender to French firm Idemia by manipulating tender criteria, ignoring technical disqualifications, and bypassing mandatory procedural safeguards.”

Meanwhile, Foreign Minister Arzoo Rana Deuba and Foreign Secretary Amrit Rai have received praise for their “insistence on transparency and strict adherence to competitive bidding standards.”

The story of corruption in Nepal’s biometric passport system goes back to 2020, when an initial launch was paused after it was discovered that a minister negotiated himself a Rs 700 million (about US$9.3 million) fee as part of the deal. Eventually, both Idemia and Mühlbauer competed for the contract, which ultimately went to Idemia.

The DOP evaluation committee says it will now consider Idemia’s complaint and change course if needed.

Article Topics

biometric passport  |  biometrics  |  government purchasing  |  IDEMIA  |  Idemia Smart Identity  |  identity document  |  Mühlbauer  |  Nepal  |  travel documents  |  Veridos