AP Procurement Policy for e-Governance – Orders

The Government of AP has an ambitious plan of implementing e-Governance and establishing environment conducive for development of IT industry in the State over the next 5 years. To this end, GoAP has published a Blueprint, has notified an IT Policy and is in the process of developing an Enterprise Architecture for e-Governance. The Vision of the Government is

“To develop Andhra Pradesh as a knowledge society of global repute, with a focus on enhancing the quality of life of its citizens, through high-quality education and healthcare, increased productivity in agriculture and allied activities, creation of requisite employment potential by promoting electronics and IT industries, and above all, by providing good governance.”

The number of projects in the e-Governance sector is going to be large, which requires appropriate implementation and procurement models. Under these circumstances, it is quite expedient to formulate a policy to meet the implementation needs of e-Governance. The ‘Procurement Policy for e-Governance’ attempts to achieve these objectives.

2 Objectives of the Policy

The objectives of the Procurement Policy are:

a. To enhance efficiency, effectiveness and transparency in procurement decisions relating to e-Governance.

b. To enable Government departments and agencies to entrust works relating to design, development and implementation of e-Governance projects on an outcome basis, balancing cost-effectiveness and transparency.

G.O 12 AP Procurement Policy for e-Governance

3 Different methods of Procurement

3.1 Various methods of procurement suitable for e-Governance projects

The following methods of procurement are prescribed for compliance by all the Departments, in relation to the implementation of e-Governance projects or in undertaking any IT-related activities. These methods are described in the succeeding sub-sections. A matrix showing the procurement methods Vs items to be procured is in the Annexure-1.

a. Rate Contracts (RC)

b. Limited Tenders – through Empanelment of Vendors
c. Swiss Challenge
d. Promotion of Innovative products & Solutions
e. PPP Methods
f. Open competitive Bid
g. Special Provisions for Procurement

3.2 Rate Contracts

A Rate Contract (RC) is a procurement strategy aimed at standardizing procurement prices for commonly procured goods and services. The prices are fixed for a defined period. The following provisions apply in regard to administration of RCs

a. AP Technology Services Ltd (APTS) is nominated as the Nodal Agency for establishing RCs relating to IT Products subject to provisions of this policy.

b. APTS shall finalize the Rate Contracts by following Open Competitive Bidding (OCB) through issuing an RFP, clearly delineating the specifications for all the products for which RC is to be established.

c. Upon completion of the bid process, APTS shall issue a notification to the successful vendors for the goods or services for which they are selected as per the tender process.

d. A rate contract shall be effective for a period of 6 months.

e. The rate contract shall be reviewed every month (i) for updating of rates discovered for the items on the RC list, in OCB procurements undertaken in the previous month and (ii) for addition of new products, following a monthly tender process.

f. APTS shall publish on its web-site, the details of RCs established once every 6 months, and update the list every month, as may required in pursuance of (e) above.

g. All departments, Corporations and Societies of the Government shall procure their individual requirements of IT products from the vendors listed in the latest and current RC published by APTS. They may adopt the other methods of procurement specified in this policy, if their requirement cannot be met by the items listed in the RC or where the items required by them are not covered by the RC. However, they

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should inform APTS of the same, to enable the latter to initiate a process for bringing such items into the RC in the next RC period.

h. The Departments, Corporations and Societies of the Government shall place order directly on the vendors listed in the RC notified by APTS, in respect of the items for which such vendors have been selected. The prices listed in the RC shall be strictly followed, along with the terms and conditions for RCs specified on the website of APTS.

i. When multiple products providing the same functionality are required to be included in the rate contract, they may be ranked as per specified criteria, to act as guidance to the departments to make the right choice.

3.3 Limited Tenders- through Empanelment of Vendors/Service Providers

Limited tender is a procedure where tenders are called from the vendors, who are pre-qualified for specified categories of IT products and services. The following provisions apply in regard to administration of the scheme of Empanelment

a. AP Technology Services Ltd (APTS) is nominated as the Nodal Agency for empanelling of vendors of IT Products and services subject to provisions of this policy.

b. APTS shall undertake the empanelment by issuing Open notification clearly specifying categories of products and services for which empanelment is being sought, the specifications for all the products, the service levels for services as applicable and the criteria for pre-qualification of vendors for each category of products and services.

c. Upon completion of the pre-qualification process, APTS shall issue a notification to the successful vendors for the goods or services for which they are empanelled as per the notice for empanelment.

d. The panel of vendors so prepared, shall be effective for a period of one year.

e. On receipt of an indent from a Department, Corporation and Society of the Government, APTS shall, within a period of 1 week, invite limited tenders from all the vendors empanelled for the category of product or service for which such indent has been received. Thereupon, APTS shall select the vendor based on a two-stage bidding process.

f. The Departments, Corporations and Societies of the Government may choose the empanelment procedure wherever a substantial part of the scope of their requirement is not covered under RC.

3.4 Swiss Challenge Method

As per the A.P. Infrastructure Development Enabling Act, 2001, “Swiss Challenge Approach” may be followed, when a Private Sector Participant (Original Project Proponent) submits an Unsolicited or Suo-Motu proposal and draft contract principles for undertaking an IT Project, not already initiated by the Government Agency or the

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Local Authority, duly following the provisions of the said Act. The procurement under Swiss challenge shall also follow the guidelines going to be issued by Government in due course.

3.5 Public Private Partnership (PPP) model

As per the A.P. Infrastructure Development Enabling Act, 2001, “Public Private Partnership” means Investment by a Private Sector Participant in an Infrastructure Project of the Government Agency or a Local Authority in the State.

The following provisions apply in regard to adoption of an appropriate PPP Model for an e-Governance project.

a. PPP Model is appropriate in the following types of e-Governance projects

I. The projects which involve provision of transactional services, or creation of convenient citizen interface;

II. The projects that are capital intensive and have the potential for generating streams of revenue through user charges;

III. The projects that require specialized expertise – technological or operational, which is not available with the concerned Government Agency and

IV. The IT Infrastructure projects that require bundling of the creation of assets and
their management over periods exceeding 3 years.

b. Based on the project period and requirements of ownership any one of the following PPP models can be adopted:

i. Build Operate Transfer (BOT)
ii. Build Own Operate Transfer (BOOT)
iii. Build Operate Lease Transfer (BOLT)
iv. Operate Maintain Transfer (OMT)
v. Design Build Operate (DBO)
vi. Build Own Operate (BOO) etc.

c. The departments, corporations and societies of the Government, intending to adopt the PPP Model shall follow the procedure prescribed under the A.P. Infrastructure Development Enabling Act, 2001.

3.6 Innovative projects

With the objective of development of the IT Industry and promotion of Innovation, entrepreneurship and Start-up culture in the State, Government of Andhra Pradesh has notified the AP IT Policy 2014-20 and the “AP Innovation & Start-up Policy 2014-20”. In pursuance of these policies, the Government has notified a Scheme of selection of Innovative IT Products and Solutions and Suo Moto proposals submitted by the Startups and IT Companies, through G O Ms 10 ITE&C department Dated 23-1-2015.

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a. The provisions made in the aforesaid GO, amended from time to time, shall be read as a part of this policy.

b. ITE&C department, GoAP shall administer the Scheme of Innovative IT products and Solutions and Suo Motu proposals

c. ITE&C department shall issue a notification inviting proposals under the aforesaid scheme once every 6 months.

d. ITE&C Department shall select the products and solutions selected by the Committee constituted for the purpose, adopting the evaluation criteria prescribed in the scheme, duly associating the concerned department in the selection process. .

3.7 Open competitive Bid (OCB)

Competitive tendering is a widely used procurement method within Government organisations. The process consist of preparation of the OCB document, by defining the qualification criteria, scope of the work, project time lines and other terms & conditions. The procuring department or agency shall publish the tender notification in 2 national or state-level newspapers and select vendor or service provider based on a three stage bidding.

The following provisions apply in regard to adoption of the OCB method of procurement.

a. All IT products, Services or projects, which are not covered any of the above methods of procurement specified in para 3.1 to 3.5 shall be procured using OCB method.

b. The OCB method shall be basically undertaken by the department, corporation or society concerned, following a 2-stage or 3-stage bid process.

c. QCBS method may be adopted for projects with high technical complexity.

d. The following categories of projects may be undertaken by the ITE&C department, in association with the APTS as needed, adopting OCB method:

i. Creation of common IT infrastructure, to be used by whole of government;

ii. Design, development and implementation of cross-cutting e-Governance projects that involve more than one department, after obtaining consent of all the concerned departments;

iii. Design, development and implementation of enterprise applications and solutions that are to be used by all the departments, and for which no single department can be made responsible;

iv. Projects entrusted by to ITE&C department or APTS by the concerned department.

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4 Categorisation of IT Products, Services and Projects and Permissible Methods of Procurement

4.1 Software and IT Services

4.1.1 Categories

The services falling in any one or combination of the following are included in this sub-section:

i. Development and maintenance of web-sites /portals;

ii. Enhancements or improvements to existing software projects;
iii. Maintenance and/or support for software applications;
iv. Data Entry services ;
v. Design and development of MIS reports;
vi. Miscellaneous Software Services

4.1.2 Permissible methods of procurement (when procured in isolation)

i. Projects with estimated value of less than or equal to Rs.5.00 Cr may be procured through the limited tender process calling bids or proposals from the vendors empanelled as per the procedure prescribed in section 3.3 of this policy .

ii. Software and IT services of value of above Rs. 5.00 Cr or Project of any value which cannot procured through empanelment process may be procured through Open Competitive Bid (OCB) process.

4.2 Hardware, Networking and Other IT Products

4.2.1 Categories

The IT Products or services falling in any or a combination of the following:

i. Laptop, Desktop, printer, scanner, Mobile phone, Tablet.

ii. Server, storage, tape library, hard drive and portable storage devices.
iii. Network equipment like router, switch, bridge, hub, NMS and EMS
iv. Passive components like patch cable, CAT 6 cable, Racks
v. Information Security products like firewall, anti-virus software,
vi. Non-IT equipment like UPS, Inverter, Batteries and DG sets

vii. Security & surveillance equipment, Bio-metric devices, Iris devices, RFID, Video & Audio conferencing equipment, Office Automation equipment.

4.2.2 Permissible methods of procurement (when procured in isolation)

i. Products with procurement value less than or equal to Rs.5.00 Cr shall be procured through the Rate contract method.

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ii. Products with procurement value greater than Rs. 5.00 Cr. and less than or equal to Rs.10 Cr or products which are not covered under Rate Contract shall be procured through Limited Tender from the vendors empanelled as per the procedure prescribed in section 3.3 of this policy.

iii. Products with procurement value of above Rs. 10.00 Cr or procurement of any value in respect of Products / items not covered by RC or by Limited tenders, shall be procured through Open Competitive Bid (OCB) Method.

4.3 Platforms

4.3.1 Categories

The Software Products falling in any or a combination of the following:

I. Operating Systems
III. Application Integration software

4.3.2 Permissible methods of procurement (when procured in isolation)

i. Software platform with value less than or equal to Rs. 50 Lakhs shall be procured through Rate contract.

ii. Software platform of value above Rs. 50 Lakhs or product of any value not covered in RC shall be procured through Open Competitive Bid (OCB) process.

4.4 Commercial off-the-shelf (COTS)

A COTS product is a software product designed to deliver specific standard functionality. A COTS product does not require custom development before deployment. Categories

i. GOTS (Government Off-The-Shelf)

ii. Office Automation and productivity tools ( like Word processing, spreadsheets, project management)
iii. ERP products
iv. CAD/CAM products
v. GIS products and tools.

4.4.1 Permissible methods of procurement (when procured in isolation)

i. COTS products may be procured by Limited tender Method from the empanelled vendors, when the procurement value is less than Rs 10 cr, as per the procedure prescribed in section 3.3 of this policy.

ii. Other COTS products may be procured through OCB.

4.5 Bespoke (Custom Application) Solutions

Bespoke software is custom or tailor-made software. Some of the major benefits of bespoke developments are: Fewer Unknown Bugs, Scalable Solutions, Increased Productivity, Quick and Easy Integration, Reduced Maintenance Cost, Customized and Unique Solution, Cost-effective Licenses

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4.5.1 Categories

i. Custom solutions to meet the department’s unique needs

ii. MOTS ( modified or modifiable off-the-shelf – ex. ERP customization)

4.5.2 Permissible methods of procurement

i. Innovative Customized software projects of value less than or equal to Rs.5.00 Cr. shall be procured through innovative projects method, specified in para 3.6

ii. Project costing above Rs. 5.00 Cr or project of any value not covered in innovative projects method shall be procured through Open Competitive Bid (OCB) process.

4.6 Cloud Services / Solutions

The departments can use the cloud services under the following circumstances:

i. The project has to be implemented in a short period, over a wide jurisdiction;

ii. Competitive cloud-based products, that meet the requirement of the department, meeting over 80% of the functionality are available in the market place on a global search;

iii. The budgetary position of the procuring agency does not permit large expenditure of capital nature, but is sufficient for operational expenditure on a pay-per-use basis.

iv. The department does not have in-house expertise to develop, deploy and maintain the product.

4.6.1 Categories

i. IaaS – Infrastructure-as-a-Service
ii. SaaS – Software-as-a-Service
iii. PaasS – Platform-as-a-Service

Detailed description and features of these 3 modes of cloud services shall be provided on the web-sites of the ITE&C departments and APTS, within a period of 4 weeks of issue of this policy.

4.6.2 Permissible methods of procurement

Project cost of any value shall be procured through Limited Tender through empanelment of vendors as specified in para 3.3 or through the PPP method.

4.7 Mobile Apps

M-Governance aims to provide Government services to the people through mobile phones and tablets. Mobile apps are fast for adoption, easy to learn and operate and convenient to the users.

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4.7.1 Categories

i. Native Apps

ii. Web Apps.
iii. Hybrid Apps

The APTS shall publish a list of Apps useful for e-Governance, after conducting a due diligence of each app, within a period of 2 months.

4.7.2 Permissible methods of procurement

i. Mobile application with value less than equal to Rs. 10 Lakhs shall be procured through Innovative product process, specified in para 3.6.

ii. Project with cost above Rs. 10 Lakhs or project of any value not covered in Innovative method shall be procured through Open Competitive Bid (OCB) process.

4.8 Replication of Successful e-Government Projects

Replication of e-governance projects or solutions successfully implemented in other Countries, States and any other Department within the state, would prevent the re-invention of the wheel and facilitate faster implementation.

4.8.1 Categories

e-Governance Projects or solutions successfully Implemented in other geographies, subject to fulfilling the following criteria:

i. The functionality offered by the successful project, meets the requirement of the department of GoAP to the extent of at least 70%;

ii. The project should have been successfully functioning and delivering quality services, at least for a period of 2 years in the originating country, State or department;

iii. The IP of the product is held by the respective Government agency in the originating place.

iv. The product shall conform to open standards, and shall not have any vendor lock-in.

4.8.2 Permissible methods of procurement

Replication of services shall be carried out through the following methods:

i. When the owner of the successful project is a Government department or body, a negotiation-based approach may be adopted, duly satisfying as to the cost-effectiveness, and reasonableness of the TCO, to be adjudged by an Evaluation Committee, which may also undertake a field visit to the Origin State for this purpose.

ii. In all other cases, the Swiss Challenge method prescribed in para 3.4 shall be followed.

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4.9 Project Development Services

The Automation process or design of service delivery systems in Government departments shall be developed with a clear agenda and road map to avoid problems of interoperability, inconsistency of reports etc.

Advance planning is required to ensure Enterprise level Security, an up to date and fit-for-purpose IT infrastructure, improved control and lower Total Cost of Ownership (TCO) through optimized central ownership and management of IT assets.

Effective planning of infrastructure and service delivery shall start at the place where the IT infrastructure is proposed to be put to use, by way of a Project Feasibility Report (PFR) or Detailed Project Report (DPR) or Project Appraisals Document (PAD) or as a Department Road Map (DRM)/ Program Road Map (PRM).

The DPR or its equivalent documentation is mandatory to ensure the data standards, interoperability, service delivery channels and convergence with A.P. State Enterprise Architecture (APSEA). After obtaining administrative sanction the procurement process shall start.

The departments shall use the services of APTS or external consultancy firms for preparation of Project development documents.

4.9.1 Various types of reports required for Project Development

i. Project Feasibility Report (PFR)
ii. Detailed Project Report (DPR)
iii. Project Appraisals Document (PAD)
iv. Department Road map or Program Road Map

4.9.2 Permissible methods of procurement

i. Identification of consultants for Projects with an estimated value of less than or equal to Rs. 50.00 Cr. shall be carried out through the Limited tender – through empanelment of vendors as per para 3.3.

ii. Identification of consultants for Project with an estimated value of more than Rs.50.00 Cr. or project of any value not covered in through empanelment of vendors shall be selected through OCB.

4.10 System Integrator (SI)/Implementing Agency (IA)

System Integrator method of Service provider will be the best choice, for a Department if they require multiple services such as Software development, Infrastructure, Networking, Service delivery, Operation management etc.,

4.10.1 Permissible methods of procurement

i. Selection of System Integrator for projects with estimated cost less than or equal to Rs.5.00 Cr. shall be done through Limited tender – through empanelment of vendors, as specified in para 3.3

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ii. Selection of System Integrator for projects with estimated cost of more than Rs. 5.00 Cr shall be done through OCB.

5 Special provisions of Procurement

5.1 Emergency Procurements:

The departments / APTS may procure IT products or services required on special occasions to meet the immediate requirement.

In such cases, the respective departments /APTS, after obtaining prior approval of the HoD or MD as the case may be, can procure such products or services up to a value of Rs. 10.00 Lakhs by obtaining at least three quotations from the vendors, preferably from the list of empanelled vendors. The quotations shall be evaluated by comparing with market values and also with the recent procurement rates, ascertained from APTS.

5.2 Repeat Orders:

In a few cases the departments may take up the expansion of an IT implementation soon after the original scope of the project has been entrusted or executed. To ensure the fast roll out for the department with the same specifications of products, the process of ‘repeat order’ may be adopted, subject to the following conditions.

i. The repeat order can be placed only within a period of six months from the date of placing original purchase order,

ii. The original procurement should have followed either OCB or limited Tender process.

iii. Repeat order can be placed for a maximum of two times, recoding the reasons for adopting it each time.

iv. The value of each repeat order shall be less than or equal to the original purchase value.

5.3 Procurement of proprietary products:

Proprietary products (both hardware and software) which are unique and appropriate to the requirement under consideration can be procured by calling proposal from the OEM. The price quoted by the OEM to the Department/ APTS / GoAP shall not be more than that at which the product was supplied by the OEM to any other customer in India during a period of the preceding 6 months.

The need for procuring the proprietary products shall be certified by a technical expert group appointed by the department with justification supported with recorded facts.

5.4 Preferential Market Access as per IT Policy:

The AP IT Policy, notified in G.O. Ms No. 13 dated 12 August 2014, provides a preferential treatment for certain categories of IT Companies specified therein, namely, MSME Companies and Rural IT Companies registered and operating in AP. All the departments shall comply with the provisions of the aforesaid Government Orders.

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6 Simplification of Documentation for Bidding:

The preparation of the support documents by the bidders for bid submission and evaluating the same by purchaser is a time consuming process. To simplify the procedure the following methods are to be followed:

a. Bidders shall submit their bids with self-declarations in respect of the pre-qualification criteria prescribed in the tender document.

b. The procuring agency shall evaluate the bids based on the self-declaration and select the successful bidder.

c. The successful bidder shall submit the documents to prove their pre-qualification, as specified in the RFP, within 5 working days from the date of declaration of successful bidder.

d. APTS will receive support documentations, verify the compliance with the requirements of the RFP and if they are in order, issue the award notification.

e. Failure to submit all support documents by the successful bidder within specified time or non-compliance with the self-declaration or non-fulfilment of the pre-qualification criteria specified on the RFP, upon their verification, shall entail forfeiting the EMD and Blacklisting of such bidder for a period of two years. In such cases, the procuring agency may proceed further with the next-ranked bid.

6.1 Faster Procurement Cycles

With self-declaration model, faster procurement decisions are expected for all procurement, especially for OCB. The following timelines shall be complied with by all the procuring agencies.

i. The minimum period for bid submission for OCB shall not be less than 15 calendar days and shall not exceed 30 calendar days from the date of notification, unless the stipulations of the funding agencies require longer periods.

ii. The procuring authorities shall complete bid evaluations in short periods
a. The technical evaluation shall be completed within 15 calendar days
b. Commercial evaluation shall be completed within 10 calendar days.

iii. The procuring authorities shall communicate the award to the successful bidder within 45 calendar days, from the date of notification of the tender.

7 Procurement Governance

To ensure the efficient and effective procurement, the following processes are mandated:

i. The process of Procurement shall be undertaken on e-Procurement platform wherever applicable.

ii. The Rate Contract purchase orders shall be placed on the RC vendors only, in respect of items covered by the RC. Orders placed on other vendors by departments are invalid and action shall be initiated on the concerned official as per CCA rules.

iii. The Treasury / PAO / DDOs / Accounts officers, shall verify the RC vendor list before releasing the payment to vendors for the Purchase orders based on RC. Vendor bills not in the RC shall be rejected.

iv. For all the Goods procured through RC, it is mandatory for Acceptance Test by APTS, duly paying the service charges in advance.

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v. The RFP requirements shall ensure

a. Vendor-Neutral specifications
b. Clearly defined objectives, scope and outcome
c. Unambiguous Evaluation criteria

7.1 The committees constituted for e-Gov procurement Process

The following Committees are prescribed for managing the procurement processes, in conformance with the provisions of this policy.

7.1.1 Procurement by APTS – procurement value less than 10.00 cr
i. MD, APTS – Chairman
ii. General Manager APTS – Member
iii. Representative of ITE&C department – Member
iv. Representative of user department – Member
v. Manager of APTS – Member convener
vi. External Expert – Member

7.1.2 Procurement by APTS -procurement value more than 10.00 cr
i. Secretary / Prl. Secretary, ITE&C dept. – Chairman
ii. Secretary Finance Dept or nominee – Member
iii. HoD of user Department – Member
iv. MD, APTS – Member convener
v. External IT Domain Expert – Member

7.1.3 Procurement by respective Line Department – value less than 50.00 cr.
i. Head of the Line Department – Chairman
ii. Representative of MD, APTS – Member
iii. External IT Domain Expert – Member
iv. CIO / Department designated officer – Member convener

7.1.4 Procurement by respective Line Department-value more than 50.00 cr.
i. Secretary / Prl. Secretary of respective dept. – Chairman
ii. Secretary, Finance Dept. – Member
iii. Representative of Secretary, ITE&C Dept. – Member
iv. External IT Domain Expert – Member
v. Head of the Line Department – Member Convener

8 Model documents

8.1. The following documents shall be made available on APTS website: www.apts/gov.in/tenders and ITE&C Department website www.apit.ap.gov.in within a period of 1 month of issue of this policy.

1. Notification calling for Rate Contracts

2. Notification for Empanelment
3. RFP for selection of SI/IA
4. RFP for Selection fo Consultants for Project Design and development
5. PPP Documents (RFP, Concession Agreement)
6. Guidelines for Pre-Qualification Criteria

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7. Guidelines for Technical Evaluation

8. Template and guidelines for preparation of DPR

8.2. The departments, corporations and societies of the government shall adopt and /or customize the model documents, ensuring however, that the basic principles of procurement like transparency, equitable opportunity and rational evaluation of bids/ proposals are strictly adhered to.

8.3. Departments, Corporations or Societies of the Government not possessing the requisite expertise for undertaking the procurement process may take the services of APTS on payment of the prescribed service charges.

About Pavan

Advocate, Journalist and Founder of Telangana Navanirmana Sena From Mahabubnagar Email Me -- pavan@tgnns.com

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