The court emphasized that the inclusion of a subcontracting component did not make the bid substantially not responsive, and the employer had the right to exclude the subcontracting component. The court also highlighted the importance of public interest in the award of the contract.

1. By consent the main writ petition itself is taken up for final disposal.

2. The Government of India had received a loan from the International Bank for Reconstruction and Development (hereinafter called ‘the Bank’) towards the cost of upgradation of government roads and for meeting the cost of Enhanced Periodical Maintenance. The first respondent invited bids enhanced periodical maintenance of Government roads on 5.12.2003. Bid was open to all bidders from eligible source country as defined in the guidelines, bidders from India registered with Tamil Nadu or other State Governm ents were also eligible to participate in the bid. Bids were invited for eight contracts MC-1 to MC-8. This writ petition is with regard to MC-5 which relates to roads in Tiruchy and Thanjavur District.

3. The instructions to bidders contains the details regarding to bidding documents, preparation of bids, submission of bids, bid opening and evaluation, award of contract. Some of the clauses are important and those clauses alone will be referred to. As per Clause 4.3, all bidders had to include the information given thereunder and the documents alongwith their bids. One of the relevant information that had to be given as per Clause 4.3 (j) was —

“proposals for sub-contracting components of the Works amounting to more than 20 percent of the Bid price (for each, the qualifications and experience of the identified subcontractor in the relevant field should be annexed);”

Clause 4.4 reads thus:

“Bids from joint venture are not acceptable.”

Clause 4.5-A and Clause 4.5-B deal with requirements like fulfillment of one similar contract, availability of equipment etc. But, the controversy does not touch this Section. According to Clause 4.5-C, it was open to the bidders to bid for more then one contract. Clause 4.6 deals with subcontractors. Bidding documents consist of the documents listed in Clause 8.1. But there is no controversy regarding this. The bidding documents could be amended and Clause 10.1 deals with that. The deadline for submission of bid vas postponed from 23.1.2004 to 9.2.2004. Clause 22 deals with modification arid withdrawal of bid. Clause 22.3 reacts thus:

“No bid may be modified after the deadline for submission of Bids.”

Clause 22.5 reads thus:

“Bidders may only offer discounts to, or otherwise modify the prices of their Bids by submitting Bid modifications in accordance with this clause, or included in the original Bid submission.”

Clause 26 deals with examination of bids and determination of responses. Clause 26.1 – “Prior to the detailed evaluation of Bids, the Employer will determine whether each Bid (a) meets the eligibility criteria defined in Clause 3; (b) has been properly signed; (c) is accompanied by the required securities and; (d) is substantially responsive to the requirements of the Bidding documents.”

Clause 26.2 – “A substantially responsive Bid is one which conforms to all the terms, conditions, and specifications of the Bidding documents, without material deviation or reservation. A material deviation of reservation is one (a) which affects in any substantial way the scope, quality, or performance of the Works; (b) which limits in any substantial way, inconsistent with the Bidding documents, the Employer’s rights or the Bidder’s obligations under the Contract; or (c) whose rectification would affect unfairly the competitive position of other Bidders presenting substantially responsive Bids.”

Clause 26.3 – “If a Bid is not substantially responsive, it will be rejected by the Employer, and may not subsequently be made responsive by correction or withdrawal of the non-conforming deviation or reservation.”

There was an addition to the General Clause of (GCC) 7, viz., Clause 7.2 which reads thus:

“The contractor shall not be required to obtain any consent from the employer for – a) the sub-contracting of any part of the Works for which the Sub-contractor is named in the contract; b) the provision of labo