J U D G M E N T

SANJEEV NARULA, J.

1. The present petitions relate to a tender process for empanelment of vendors for providing development and maintenance services in respect of software and websites employed by government offices for emerging and ongoing projects undertaken under the aegis of the Government of India [hereinafter, “the Tender”]. The Petitioners converge on a singular grievance: the rejection of their bids, citing their categorization as ‘outliers’ under the terms and conditions of the tender. Given the similarity in the factual matrix and contentions raised, the Court deems it prudent to pronounce a common judgement. For clarity and convenience, our deliberation will predominantly revolve around the details set out in W.P.(C)

14204/2022. The facts, where they deviate, are delineated in the judgement.

BRIEF FACTS

2. The Petitioners – Dhanush InfoTech Private Limited [hereinafter, “Dhanush”]1 and CMS Computers Limited [referred to as “CMS”],2 are inter alia engaged in providing information technology [“IT”] support services to various governmental and non-governmental entities. They assert their expertise in delivering IT solutions for numerous e-governance initiatives spearheaded by entities such as National Informatics Centre, Ministry of Electronics and Information Technology and various other public sector

1 Petitioner in W.P. (C.) 14204/2022.

undertakings.

3. The Respondent released a Request for Proposal [“RFP”] aimed at empanelling agencies in Tier 1A, 2 and 3 categories, for design, development, implementation, and maintenance of application software and website under the Tender. Within this tender’s framework, an empanelment of fifteen vendors for Tier 2 and ten vendors of Tier 1A categories was envisioned for future projects. On 18th May, 2022, Dhanush submitted their bid for the Tender as a Tier 2 vendor, while CMS applied as a Tier 1A vendor. Amongst the ten and six bidders who participated at the Tier 2 and 1A level respectively, seven and five successfully navigated the first stage of technical evaluation, advancing to the financial evaluation stage, which was bifurcated into two segments: (i) Identification of Outliers and (ii) Sequencing of Bidders as L1, L2, L3, and so on. Despite the Petitioners’ bids emerging as the most competitive, they were tagged as ‘outliers’, i.e., bidders offering extreme quotes, thus leading to the rejection of their bids.

4. Aggrieved with the bid rejection, the instant petitions have been filed by the Petitioners.

SUBMISSIONS OF THE PARTIES

5. Mr. Vivek Soni, counsel appearing for Dhanush, made the following submissions:

5.1 Dhanush’s bid has been rejected in an unjust, unfair, and arbitrary manner. When contrasted with the margins suggested by other shortlisted bidders, Dhanush proposed the lowest operative margin (7.00%), yet, their bid faced rejection.

2 Petitioner in W.P.(C) 2953/2023.

5.2 RFP for the Tender aimed to attract a wide pool of bidders, with an intent to shortlist fifteen vendors for provision of service. Astonishingly, only six were finalized for the Letters of Empanelment. As informed by the Respondent’s tender division, the margin requirement ranged between a floor of 7.075% and a ceiling of 13.2%. Most successful bids fell within the 8.49% (L1) to 9.95% bracket, significantly higher than 7.00%. Dhanush’s bid was therefore rejected due to insignificant shortfall of 0.075% from the floor margin.

5.3 Keeping in view the Public Exchequer’s best interests, Dhanush’s bid could have been negotiated and accepted.

5.4 The Respondent’s methodology and formula utilised for determining successful bids appears skewed, given the data set nature and the nominal variance observed. When the issue was examined by a reputed statistical institute, the experts recommended use of a different method, which, if applied, reveals operative margin limit between 6.98%-11.02%. This alternative method, being more efficient and authentic, should be employed for bid evaluation.

5.5 With over fo