UNDER SECTION 27 OF THE COMPETITION ACT

The present matter relates to information filed under section 19(1) of the Competition Act, 2002 (hereinafter referred to as the Act) on 17.08.2010 by an NGO, 'A Foundation for Common Cause & People Awareness' (hereinafter referred to as the Informant) against PES Installations Pvt. Ltd. (PES), MDD Medical Systems Pvt. Ltd. (MDD), Medical Products Services (MPS) and Ministry of Health & Family Welfare, Government of India alleging bid rigging in the tender for supply, installation, testing and commissioning of Modular Operation Theatre (MOT) and Medical Gases Manifold System (MGMS) to Sports Injury Centre (SIC), Safdarjung Hospital, New Delhi. The tender was floated through Hospital Services Consultancy Corporation (HSCC) Limited, a government PSU on behalf of the hospital.

2. The facts and allegations as per the information, in brief, are as under:

2.1 It has been submitted by the Informant that the procurement process for Modular Operation Theatre (MOT) and Medical Gas Manifold System (MGMS) in the instant case was initiated in the 10th Project Monitoring Committee Meeting dated 26.08.2009 chaired by the then Joint Secretary, Ministry of Health and Family Welfare, Government of India. According to the informant, even when MOT & MGMS were conventionally two different product segments, the Committee expressed an opinion that smooth coordination between the two works was required.

2.2 Subsequently in a meeting held on 28.08.2009 under the then Additional Director General and Medical Superintendent of the hospital, Dr. Jagdish Prasad, it was recorded that in the hospitals like, Goa Medical College, Goa, LNJP Hospital, New Delhi, KEM Hospital, Mumbai and Institute of Liver and Biliary Sciences (ILBS), New Delhi, to ensure smooth coordination, the work of Modular OT (MOT) and Gas Pipeline (MGMS) was awarded as combined work to a single firm. According to the informant, the information given in regard to the work executed in these hospitals was not correct and it was only used with a purpose to proceed with floating a tender for a combined work order.

2.3 As per the informant, at the time of the project conception, budget for MOT and MGMS work was fixed as Rs.85.00 lakh and Rs.170.00 lakh respectively. During the meeting dated 28.08.2009, however, this budget was enhanced to Rs. 10.00 crore by clubbing the two works of MOT and MGMS. Subsequently, a combined tender for MOT and MGMS was floated by HSCC (India) on 01.10.2009.

2.4 The informant has submitted that the decision of issuing tender for a combined work order for both MOT and MGMS caused exclusion of those companies which specialised in either of these two products from participation in the tender. Certain pre-qualification criteria were also incorporated in the tender in order to further limit the competition.

2.5 According to the informant, all these steps enabled the firms named in the information to manipulate the entire tender process. It has also been alleged that some influential Government Officials used their authority to form a committee to facilitate these firms to manipulate the bidding process.

2.6 The Informant has brought out that on 12.10.2009, pre-bid meeting took place in Safdarjung Hospital in which twelve firms had participated. In that meeting, there was protest over the conditions in the tender documents by every single prospective bidder except by the firms named in the information. Most of the firms expressed their concern over restrictive tender conditions and possibility of cartelization in the tender process in the said meeting. Since the firms had expressed concerns, they were asked to submit their concerns in writing by the next working day.

2.7 The Informant has further brought out that on 22.10.2009 certain amendments were issued by HSCC. However, instead of addressing the concerns of the prospective bidders, only such changes were made in the tender documents which further helped the firms named in the insta