No single vendor may get over Rs 30-cr UID contract

UIDAI has split the overall project into small ones and handed them over to multiple vendors to speed up work.

Global and Indian IT vendors, waiting for big-ticket contracts out of the government’s ambitious unique identification (UID) programme called ‘Adhaar’, may be disappointed. The UID Authority of India (UIDAI) has split the overall project into small ones and handed them over to multiple vendors to speed up work. As a result, no single IT contract is likely to cross Rs 30 crore, except the managed services provider (MSP), tender for which will be floated soon.

“In order to adhere to time lines, UIDAI has unbundled many components of the project. If we had designed it in a few big-ticket portfolios, like MSP and others, the project would have taken more time for rollout,” Nandan Nilekani, UIDAI chairman, told Business Standard. He said the real challenge going forward would be to integrate all these components from multiple vendors and develop a scalable model.

The former Infosys CEO and MD, who has been entrusted with the execution of this ambitious project, is seen using his business acumen developed over the years as a seasoned CIO to procure IT services cost-effectively and at the same time deploy the “best-of-the-breed” solutions.

“It is true UIDAI is looking for best-of-the-breed service providers. In principle, we desire to build a system to prevent vendor lock-in and this is likely to bring down the cost of procurement for IT systems and software,” said Nilekani.

Most contracts announced recently are not very big from their value point of view, though these projects have seen participation of global and Indian big names like IBM, Accenture, HP, Capgemini, TCS, Infosys, Wipro, HCL and MindTree.

The first UID contract to become a consulting partner for UIDAI, for example, was of the size of Rs 7.05 crore, which was bagged by consultancy firm Ernst & Young. The project for the development of the core software application was Rs 19 crore. It was bagged by Bangalore-based IT services provider MindTree, outbidding Accenture.

This, however, has not deterred vendors from bidding for the contracts as most of them consider it a reference point for future government contracts.

“As a project of this magnitude was never executed in India before, the UID authority is playing it safe by identifying the best-in-the-breed service providers in each category. This is the reason we may not see big deal sizes. For most companies, participating in the bid and bagging a single UID contract is like getting a certificate to participate in future government contracts,” said the Indian head of a global IT and consulting firm.

He added that this was the reason why MindTree, which emerged as the lowest commercial bidder (L1) for the core software application development contract, quoted Rs 19 crore against Accenture, the second highest bidder (L2), which quoted Rs 90 crore. “This will help UIDAI to procure IT services at the best prices available in the market,” he said.

MindTree would soon come out with the “Release 1” of the software application development. The subsequent version would be out around the same time when UIDAI brings on board an MSP.