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IN THE HIGH COURT OF DELHI AT NEW DELHI
Satish Chandra Sharma, Subramonium Prasad, JJ.
KEC International Limited – Appellant
Versus
Western Railways, & Anr. – Respondents
W.P.(C) 14388 of 2022 & CM APPLs. 43907 of 2022, 44578 of 2022, 44579 of 2022, 44603 of 2022
Decided On : 16-02-2023
The Court held that the tendering authority was empowered to issue a clarification in case the same was required as well as to consult with the bidders if needed. Allegations of special treatment being accorded to Respondent No.3 are unfounded and merely demonstrate the grievance of a jilted bidder whose bid has been found to be unsuccessful. The Court further held that the scope of judicial review in contractual matters is severely limited, and in the field of public works, due deference must be given to the decisions of the State as the activities that are undertaken are of such nature that any delay or any hampering of the same can lead to an impediment of the country at large.
Fact of the Case:
The Petitioner, a bidder in a tender process for a railway project, challenged the re-opening of the Financial Bid after it had been declared as the L1 (inter-se rank) bidder. The re-opening was done to rectify an error in the evaluation of the technical capacity of another bidder, Respondent No.3, which had initially been found to be technically non-responsive. The Petitioner argued that the re-opening of the Financial Bid was illegal and arbitrary, and that it violated the principles of fair play and transparency.
Finding of the Court:
The Court found that the re-opening of the Financial Bid was not illegal or arbitrary. The tendering authority had the power to issue clarifications and consult with the bidders, and the error in the evaluation of Respondent No.3's technical capacity was a genuine mistake. The Court also found that the Petitioner did not have a vested right to be awarded the tender, as the contract had not yet been concluded.
Issues: 1. Whether the re-opening of the Financial Bid was illegal or arbitrary. 2. Whether the Petitioner had a vested right to be awarded the tender.
Ratio Decidendi: 1. The Court held that the re-opening of the Financial Bid was not illegal or arbitrary because: a) The tendering authority had the power to issue clarifications and consult with the bidders. b) The error in the evaluation of Respondent No.3's technical capacity was a genuine mistake. 2. The Court held that the Petitioner did not have a vested right to be awarded the tender because the contract had not yet been concluded.
Final Decision: The Court dismissed the Petitioner's writ petition, holding that the re-opening of the Financial Bid was not illegal or arbitrary and that the Petitioner did not have a vested right to be awarded the tender.
JUDGMENT
1. The instant writ petition has been filed under Article 226 of the Constitution of India, 1950, seeking the quashing of the process of re-opening of Financial Bids as indicated in communication dated 06.10.2022 pertaining to Request for Proposal for Bid/Package No. RTM-NRD-DyCE-C-EPC-02 dated 30.03.2022 [revised on 09.06.2022]. The writ petition further prays for directions to the Respondents to act in terms of the RFP and rely on the results of the Financial Bid which have already been declared, and therefore, declare the `Selected Bidder..
2. The facts, in brief, leading to the instant petition have been stated to be as under:
a) On 09.06.2022, the Respondent No.1, i.e. Western Railways, floated a Request for Proposal for "Engineering, Procurement and Construction (EPC) Tender for Civil Engineering Works of Doubling of Track in Mid-Sections between Dalauda (305.15 kms) to Ratlam (374.46 kms) Stations of Ratlam Division of Western Railway in connection with Nimach - Ratlam Doubling Project". The last date for submission of bids was 25.07.2022 and the estimated cost of project is Rs.260.88 crores.
b) Clause 1.2.1 of the RFP notes that single stage two packet system is to be adopted for selection of the bidder. The first stage is the "Technical Bid" which involves the assessment of the technical capacity of the interested parties and whether the documents submitted are in accordance with the RFP. The second stage pertains to the opening of the "Financial Bid" of the bidders who have qualified in the Technical Bid.
c) It is stated that seven bidders, including the Petitioner herein, submitted their bids well before the last date for submission of bids. Thereafter, a detailed evaluation of the Technical Bids was carried out, and five out of seven bidders (including the Petitioner herein) were considered eligible on 01.08.2022. However, the bid of one MBPL PGIPL JV was rejected and the said entity did not challenge the disqualification or make any representation towards the same. The Financial Bids of the technically qualified bidders were opened on the e-tendering portal (IREPS) on 05.09.2022 and the Petitioner herein was found to be L1 (inter-se rank). It is stated that the techno-commercial tabulation recording the same was obtained/downloaded by the Petitioner on 05.09.2022.
d) Post opening of the Financial Bid and price discovery, a letter bearing No.WNC-623-0-EPC Policy/No.E71359 dated 22.09.2022 was issued by Respondent No.1 with regard to the evaluation of the Technical Capacity of a bidder. The letter noted that there was a confusion pertaining to the consideration of audited/unaudited balance sheets and issued the following clarification:
"Sub: Provisions in RFP regarding evaluation of "Technical Capacity".
Ref: Railway Board letter No. 201810E-VCT/36-EPC Contract Policy Pt-I Dated 20.12.2021.
In RFP of the EPC Tenders, there is confusion regarding considering audited/unaudited balance sheets while evaluating "Technical Capacity".
With reference to Para 12 of Annex IV of Appendix IA of RFP of the EPC tenders, it is clarified that for calculating 'Technical Capacity', if certified by Statutory Auditor or its respective clients, the amounts received in each eligible project in the Financial Year immediately preceding the Bid due date, shall be considered in the prescribed format even if the balance sheet is unaudited for that particular year.
This shall be followed for all future EPC Tenders including those under consideration.
This has approval of CAO(C)"
e) It is stated that on 06.10.2022, around 6:00 PM, the Petitioner discovered on the IREPS portal that the new Financial Bid closing date/time was 10.10.2022 at 12:00 PM. Being aggrieved by the re-opening of the Financial Bid, the Petitioner submitted a detailed representation to the Respondent No.1 requesting to not reopen the Financial Bid as the same would amount to gross violation of the terms and conditions of the RFP as well as the Manual for Procurement of Works
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