Can Departments Do Remaining Tender Work Internally?

In the realm of public procurement and government tenders, a common question arises: Can a department get the remaining work of a tender departmentally? This issue often surfaces when tenders are cancelled, bids are rejected, or projects face urgent timelines. Understanding the legal boundaries is crucial for departments, contractors, and stakeholders to avoid disputes and ensure smooth project execution.

This blog post delves into key legal principles, precedents, and practical recommendations. While this provides general insights based on judicial decisions, it is not legal advice—consult a qualified attorney for specific cases.

Overview of Departmental Execution

Departments typically invite tenders for public works to promote transparency and competition. However, circumstances like tender cancellations or urgency may justify shifting to departmental execution. Courts have generally upheld this approach when it's in the public interest, provided decisions are reasoned and documented. For instance, if a tender is cancelled due to changed circumstances, such as an increase in mining capacity, the department may execute the work internally, especially if over 60% is already done departmentally, making revival impractical 2018 0 Supreme(Jhk) 1274.

This flexibility stems from the department's authority to prioritize timely completion over rigid tender processes.

When Can Departments Execute Remaining Work Departmentally?

1. After Tender Cancellation

Tender cancellation doesn't always mean re-tendering immediately. Departments can handle remaining work internally during the interim to prevent delays. In one case, after cancelling a tender, the department completed 57.50% of timber extraction work departmentally 2021 0 Supreme(AP) 348. Similarly, fresh tenders might be called later, but departmental action bridges the gap 2019 0 Supreme(Gau) 17.

A High Court directed the State to forthwith take up the remaining work departmentally without any further delay and for that purpose mobilize men, machinery and materials for eight tenders

STATE OF SIKKIM AND ORS. vs SONAM TSEWANG BHUTIA AND ORS.

2. Due to Urgency or Bid Rejection

Urgency is a key justifier. Departments may reject technical bids and execute work internally if time is critical. This was upheld where respondents proceeded departmentally post-rejection 2006 0 Supreme(Gau) 772.

Policy decisions also play a role. Courts respect departmental discretion if fair and justified 2002 0 Supreme(Jhk) 420. For example, when contractors fail obligations, departments can step in to mitigate losses 2006 0 Supreme(Raj) 2743.

3. Contractor Default and Re-Tendering

If a contractor underperforms, re-tendering for remaining work is common, but departmental execution remains an option. In a case, after re-tender, remaining work went to another contractor due to the original's failure, despite defiance of directions 2019 0 Supreme(Jhk) 964.

Legal Justifications and Limitations

Discretionary Powers and Public Interest

Departments hold discretionary powers, but they must align with public interest. Courts intervene if decisions smack of arbitrariness. In one instance, a Collector’s decision to execute departmentally was quashed, with the court noting it should follow District Level Committee processes under the 5-T school initiative

SAROJ KUMAR SAHOO vs THE COLLECTOR, ANGUL

Blacklisting related to contracts requires due process. Termination alone doesn't justify blacklisting without opportunity to represent; such orders were quashed for lacking specific reasons 2019 0 Supreme(Jhk) 964.

Corruption and Procedural Safeguards

Even in alleged corruption cases involving departmental work, courts demand proof beyond doubt. In Abdulla Mohammed Pagarkar v. State, public servants and a contractor were acquitted despite claims of false bills for departmental work executed via an unaccepted tender. The Supreme Court held that procedural disregard alone doesn't constitute offenses like cheating or corruption 2018 0 Supreme(Gau) 1102 2018 0 Supreme(Gau) 1081.

Key ratio: Though the work was to be done departmentally it was alleged that in-fact the public servant got the work done through the contractor whose tender was not accepted... such disregard did not amount to any of the offences alleged against them 2018 0 Supreme(Gau) 1081.

This highlights that while procedural lapses occur, criminal liability requires evidence of dishonest intent.

Practical Recommendations for Departments

To navigate these waters effectively:

• Document Thoroughly: Record reasons like urgency, cancellation causes, or progress (e.g., >50% completion). This shields against challenges 2018 0 Supreme(Jhk) 1274.

• Obtain Approvals: Secure nods from competent authorities, such as District Level Committees

  SAROJ KUMAR SAHOO vs THE COLLECTOR, ANGUL

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• Monitor and Mobilize: Track progress, deploy resources promptly, and ensure quality

  STATE OF SIKKIM AND ORS. vs SONAM TSEWANG BHUTIA AND ORS.

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• Consider Alternatives: Weigh re-tendering for remaining work if feasible 2019 0 Supreme(Jhk) 964.

• Avoid Routine Blacklisting: Provide hearing opportunities in contractor disputes 2019 0 Supreme(Jhk) 964.

Following these minimizes litigation risks under Article 226, where writ courts exercise plenary review but defer to facts unless evincible arbitrariness exists 2019 0 Supreme(Jhk) 964.

Challenges and Judicial Oversight

Not all departmental executions sail smoothly. Writ petitions may challenge them if complex facts demand evidence-led trials, though courts entertain contractual writs sans absolute bar 2019 0 Supreme(Jhk) 964. In school projects, execution must align with program guidelines

SAROJ KUMAR SAHOO vs THE COLLECTOR, ANGUL

Prosecutions for corruption fail without reliable evidence, like flawed inspection reports prepared years later 2018 0 Supreme(Gau) 1081.

Conclusion and Key Takeaways

Generally, departments may execute remaining tender work departmentally, particularly post-cancellation, due to urgency, or contractor default. Legal precedents affirm this for public interest, as seen in cases like 2018 0 Supreme(Jhk) 1274 2006 0 Supreme(Gau) 772 2021 0 Supreme(AP) 348.

Key Takeaways:- Prioritize documentation and approvals.- Balance discretion with transparency.- Use departmental execution judiciously to avoid delays.- In disputes, courts favor reasoned public interest decisions.

Stay compliant to ensure projects progress without legal hurdles. For tailored advice, reach out to legal experts.

References: 2018 0 Supreme(Jhk) 1274 2006 0 Supreme(Gau) 772 2021 0 Supreme(AP) 348 2019 0 Supreme(Gau) 17 2002 0 Supreme(Jhk) 420 2006 0 Supreme(Raj) 2743

SAROJ KUMAR SAHOO vs THE COLLECTOR, ANGUL

STATE OF SIKKIM AND ORS. vs SONAM TSEWANG BHUTIA AND ORS.