The CAG reported that Omfed disregarded tender rules.

Debadurllav Harichandan, who is the state Public Prosecutor in Bhubaneswar, recently uncovered some alarming information about the Odisha State Co-operative Milk Producers' Federation Limited. According to a report from the Comptroller and Auditor General, the state-owned dairy farm has been making some serious mistakes in its procurement of polythene films. These mistakes have resulted in losses of Rs 3.38 crores, all because the farm decided to ignore the recommendations of its technical committee.

The report, which was released on July 1, 2015, revealed that the Purchase Committee of Omfed had floated a tender for three-layer polythene rolls. The tender specified that the films should have a thickness of 48-52 microns and must be supplied between August 1, 2015 and July 31, 2016. However, on the day before the tender was floated, the marketing wing of Omfed proposed using black and white polythene films instead. This proposal was accepted, and a corrigendum was issued on July 2, 2015.

Despite this change, the Purchase Committee still decided to go with the marketing wing's recommendations and approved the proposal on July 7, 2015. They also formed a technical committee to determine the specifications for the polythene films to be used in their milk packaging machines. However, instead of following through with the tender, the managing director of Omfed surprisingly cancelled it.

In place of the tender, the Purchase Committee decided to procure the films on a pilot basis and invited suppliers in October 2015. However, they did not specify the required thickness for the films, which led to two firms - Indu Packaging and IDMC Ltd - placing their offers. Indu Packaging offered to supply films with a thickness of 50-55 microns for Rs 160.13 per kg, while IMDC Ltd offered films with a thickness of 60-65 microns for Rs 219.34 per kg. After reviewing both offers, a high-level committee of Omfed found that Indu Packaging's offer was more economical.

Despite this, the order was placed with IDMC Ltd to procure 42 MT of polythene rolls on October 3, 2015. From October 2015 to March 2016, the dairy farm procured a total of 640.79 MT of polythene rolls, with 571.88 MT being supplied by IDMC at a cost of Rs 219.34 per kg. The remaining 68.91 MT was procured from Indu Packaging and two other suppliers at a lower cost of Rs 160.13 per kg. In total, the order was billed at Rs 14.38 crore.

But the purchases did not stop there. Omfed continued to place orders for the procurement of 3,509.50 MT of polythene rolls between July 2016 and June 2021. However, this time, they paid a higher price of Rs 230.13 per kg, compared to the initial price of Rs 131.99 to Rs 161.95 per kg.

When questioned about these decisions, the Fisheries and Animal Resources Development department, which runs Omfed, claimed that they had placed bulk orders with IDMC Ltd because their films had white pigments and a black inner lining. This, they argued, provided protection against UV rays from the sun. However, the CAG did not find this response convincing, as other polythene rolls could have provided the same protection.

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