2019 (9) TMI 167 - HC - Indian Laws

International Competitive Bidding - impact of rate of GST on the price - rejection of petitioner s price proposal - grievance of the petitioner is that having submitted a higher total price summary respondent authorities ought to have rejected the same submitted by respondent No. 4 by declaring it unresponsive . HELD THAT - Ongoing through the terms of the RFP, it is clear that parties submitting the price bid had no option or discretion in respect of the rate at which they could quote GST. None of the bidders could gain any advantage by quoting the rate of GST as per their discretion. The total price summary quoted by the parties, as per the scheme of the RFP was to form the basis of evaluation inter se the parties. As far as the component of GST is concerned, the same was required to be included as applicable . Admittedly, GST at the rate of 12% was applicable for the works in question at the time of evaluation of price bid. The requirement of GST as applicable clearly meant rate applicable. The scheme of the RFP is such that the price summary, insofar as it relates to GST, taxes and levies, is dependent upon the rate applicable. There was no discretion in the bidders or the employer to consider and include GST at a rate other than that which is applicable. Submission of total price summary including GST at a rate other than that which is applicable, therefore was a discrepancy. Likewise, petitioner did not have the option of submitting total price summary containing mounting structure with junction boxes lesser in number than what was required. Submission of such total price summary by the petitioners, therefore also constituted a discrepancy. Authorities were therefore correct in allowing rectification of such discrepancies in total price summary submitted by respondent No. 4 as well as the petitioners, after observing the procedure available in clause 2.21 of the RFP. In fact, if such discrepancies in total price summary were not corrected, the same would have resulted in an incorrect evaluation of total price summary submitted by both parties. This would have been to the detriment of the entire project and public interest. In the instant case, parties, i.e. the petitioner, respondent No. 4 as well as the employer, in the process of evaluation of the total price summary have all considered the provisions of the RFP to allow removal of discrepancy. The three parties in view of the facts taken note of above have acted accordingly and participated in the process and both petitioner, as well as respondent no. 4 have availed opportunity in the process of removal of discrepancy. The parties were thus ad idem in respect of the scope of discretion in the RFP for removal of discrepancy. Accordingly this Court would not find any fault in the action of the PSCL in allowing removal of discrepancy as per the procedure prescribed in the RFP. The discretion exercised by the respondent authorities was as per their bonafide understanding and in furtherance of the objectives intended in Clause 8 of RFP. The discretion to allow removal of discrepancy was as per the procedure prescribed in clause 2.21 of the RFP. This procedure was invoked to allow removal of discrepancy uniformly and without any discrimination in favour of both petitioner as well as respondent No. 4. Result of the exercise/discretion of the authorities is that lowest bidder has come to be selected and as such neither interest nor public purpose has suffered in the process. Petitioners have made no specific allegation of mala fide. In the circumstances there is no occasion for this Court to interfere with the discretion exercised by the authorities rejecting the price proposal submitted by the petitioners - petition dismissed.

Summary

Issues Involved:
1. Rejection of petitioner’s price proposal.
2. Award of contract to respondent No. 4.
3. Discretion exercised by the authorities under the Request for Proposal (RFP).
4. Allegations of unfair bid evaluation process.
5. Applicability of Central Vigilance Commission (CVC) guidelines.

Issue-wise Detailed Analysis:

1. Rejection of petitioner’s price proposal:
The petitioner challenged the rejection of its price proposal by respondent Nos. 1 to 3, communicated via email on 22.12.2018. The petitioner argued that their price proposal was lower than that of respondent No. 4, and thus, the latter’s proposal should have been declared “unresponsive.” The court noted that the petitioner’s total price summary was ?474.0851623.80, whereas respondent No. 4 initially submitted ?483.7172863.52. The petitioner claimed that respondent No. 4 was improperly allowed to change its bid, making it lower than the petitioner’s, which was alleged to be against the rules.

2. Award of contract to respondent No. 4:
The petitioner also contested the awarding of the contract to respondent No. 4, asserting that the process was unfair and biased. The court examined the evaluation process, which included assessing bids based on pre-qualification and technical qualification criteria. All five bidders, including the petitioner and respondent No. 4, qualified technically. The court found that the authorities allowed both the petitioner and respondent No. 4 to correct discrepancies in their bids, which was within their discretion under Clause 2.21 of the RFP.

3. Discretion exercised by the authorities under the Request for Proposal (RFP):
The court analyzed Clauses 2.21 and 8 of the RFP, which allowed the authorities to correct discrepancies in the bids. The petitioner argued that the authorities had no discretion to allow changes in the total price summary post-submission. However, the court found that Clause 2.21 (d) provided the procedure for dealing with discrepancies, and the authorities acted within their rights to correct the GST rate applied by respondent No. 4 from 18% to the applicable 12%. This correction was deemed necessary to ensure a fair and accurate evaluation of the bids.

4. Allegations of unfair bid evaluation process:
The petitioner alleged that the bid evaluation process was unfair and biased. The court found that the authorities acted transparently by allowing both the petitioner and respondent No. 4 to correct their discrepancies. The petitioner was allowed to correct the quantity of mounting structures with junction boxes, while respondent No. 4 corrected the GST rate. The court concluded that the process was fair and in line with the RFP provisions.

5. Applicability of Central Vigilance Commission (CVC) guidelines:
The petitioner argued that the authorities violated CVC guidelines by allowing post-tender negotiations with respondent No. 4. The court noted that the CVC guidelines apply to central government entities, and the respondent authorities in this case were under the State Government, thus not covered by these guidelines. The court also found that the authorities acted in furtherance of public interest and within their discretion under the RFP.

Conclusion:
The court dismissed the writ petition, holding that the authorities acted fairly and transparently in allowing corrections to the bids of both the petitioner and respondent No. 4. The discretion exercised by the authorities was in line with the RFP provisions, and the selection of the lowest bidder was in furtherance of public interest. The petitioner failed to demonstrate any mala fide or arbitrariness in the authorities' actions.