• 2024-25

    President: Malik Muhammad Shafiq-Ur-Rehman Malana - Vice President: Sardar Muhammad Rashid Khan Balouch - General Secretary: Rana Abdul Shakir Khalil - Joint Secretary: Mahar Muhammad Usman Ahmad Sial - Finance Secretary: Syed Imtiaz Hussain Bukhari - Library Secretary: Jamshaid Iqbal Khan Sohrani

    2017 CLC 126 LAHORE

    2017 C L C 126
    [Lahore]
    Before Shams Mehmood Mirza, J
    Messrs AIR CIRO through Senior Partner----Petitioner
    Versus
    CIVIL AVIATION AUTHORITY through Director-General and 5 others----Respondents
    Writ Petition No.17223 of 2016, decided on 1st July, 2016.
    Public procurement---
    ----Tender issued by the Civil Aviation Authority---Non-compliance of mandatory requirements of terms of the procurement document/tender by the bidders---"Mandatory requirements" and "ancillary requirements" of a procurement document/tender---Distinction, scope and effect---Petitioner participated in a tender issued by the Authority, and after submission of bids, the respondent bidder's technical offer was accepted despite existence of a deficiency in its bid as the respondent bidder had not enclosed the mandatory Technical Offer Form as required by the terms stated in the advertisement of the tender---Contention of the petitioner, inter alia, was that due to existence of said deficiency, the bid of the respondent bidder was liable to be rejected---Validity---Perusal of tender document revealed that the Technical Offer Form was a mandatory document to have accompanied the tender document---Authority committed a series of procedural missteps in opening of technical and financial offers by the bidders which had cast doubts on the transparency and validity of the entire process---Tender document clearly required the bidders to provide in an envelope, the Technical Offer Form, which was not done by the respondent bidder---Requirements contained in a tender notice could either be essential terms or ancillary terms (which were subsidiary to the main object), and while the former was mandatory, the latter could be deviated from and strict compliance thereof could be waived in appropriate cases---In the present case, the tender document clearly demonstrated that the Technical Offer Form was a mandatory requirement for which no relaxation could be awarded to the respondent bidder---Contention of the Authority that the same was not a material irregularity as it was inadvertently placed in the financial offer, was not therefore, tenable---Where there existed no power for relaxation, the same could not ordinarily be exercised and the parties must be held to strictly comply with essential conditions of the tender---Authority furnished no reasons as to why the lapse on part of the respondent bidder should not have operated as a competitive advantage to the petitioner, and the non-adherence to and relaxation from the prescribed condition resulted in discrimination to other bidders---Authority therefore treated the respondent bidder as qualified without making a determination on the deficiency in its bid/offer---High Court declared the letter issued by the Authority for opening of financial bids as issued without lawful authority, and the Authority was directed to hold the tender process afresh for seeking offers from the parties---Constitutional petition was allowed, accordingly.
    Shahid Hamid and Ayesha Hamid for Petitioner.
    Mushtaq Abbas and M. Usman Arif for Respondents Nos.1 to 5.
    Rana Zia ur Rehman for the Respondents.
    Date of hearing: 1st July, 2016.
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    Case Judgementhttp://www.plsbeta.com/LawOnline/law/content21.asp?Casedes=2017L206

    ORDER
    SHAMS MEHMOOD MIRZA, J.--- By this writ petition filed under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, the petitioner calls into question letter dated 19.05.2016 issued by respondent No.5.
    2.Facts of the case are not in dispute and can briefly be summarized as follows. Respondent No.2 through tender notice dated 30.04.2016 invited technical and financial offers for the grant of license for "Handling Outbound Excess, Unaccompanied Baggage and Establishment and Operation of Baggage Wrapping Facility in International Briefing Area at the Allama Iqbal International Airport, Lahore". The bids were to be submitted in the office of respondent No.5 on 17.05.2016. The technical offers submitted by the bidders were to be opened on 17.05.2016. In response to the tender notice, four bids were submitted including that of the petitioner and respondent No.6. The bids were opened on 17.05.2016, and two were rejected on the spot after scrutiny. The bid submitted by the petitioner was qualified being complete in all respects. The bid submitted by respondent No.6, however, did not contain the Technical Offer Form. Despite the fact that the technical offer/bid of respondent No.6 was non-responsive, no decision was taken by respondent No.5 on 17.05.2016. The petitioner agitated the matter at the spot and also wrote letter dated 18.05.2016 to respondent No.5 by bringing the matter on the record. It appears that on 19.05.2016 respondent No.5 addressed a letter to respondent No.3 at the Headquarters by bringing to his notice the aforementioned facts and sought permission to open the financial bids. On 19.05.2016 respondent No.5 issued letter, amongst others, to the petitioner informing him about the opening of financial bids on 21.05.2016 whereupon the present writ petition was filed.
    3.Learned counsel for the petitioner contended that the technical offer/bid of respondent No.6 was liable to be rejected on 17.5.2016 being non-responsive and in violation of tender documents but instead of passing a decision, respondent No.5, who was the final authority, evaluated the same and thereafter sought instructions from respondent No.3 through letter dated 19.05.2016 and on the same day addressed letter to the petitioner for opening of the financial bids. Learned counsel for the petitioner also referred to numerous provisions contained in Public Procurement Rules, 2004 to submit that the technical bid filed by respondent No.6 was in violation thereof and was liable to be rejected.
    4.Learned counsel for respondents Nos.1 to 5 and respondent No.6 took up the objections regarding the maintainability of the writ petition and also submitted that Public Procurement Rules, 2004 were not applicable to the tender floated by respondent No.5. It was further submitted that the Technical Offer Form was inadvertently placed in the Financial offer submitted by respondent No.6 and as such it did not constitute a material irregularity warranting rejection of the Technical bid. By referring to clause 1(a) of the Instructions and Terms and Conditions of the Technical Offer, it was contended that respondent No.5 had discretion in the matter of rejection of the bid in case of submission of incomplete tender documents. It was also submitted that the financial offers opened on 21.05.2016 showed that the petitioner had made an offer for Rs.930,000/-whereas respondent No.6 had offered Rs.1,350,000/-.
    5.Argument heard and record perused.
    6.The tender notice shows that respondent No.5 had adopted a single stage-two envelope procedure for inviting bids. The tender document contained the following material instructions for the bidders.
    (a)All bids must be based on the specified instructions and the terms and conditions. Submission of incomplete tender documents may render the bids rejected.
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    (b)Instructions and Terms and Conditions for the concession are to be signed and put into separate envelope and shall be marked as Technical Offer.
    (e)Financial and Technical Offer Form and tender documents must be signed by CEO/ MD/ Managing Partner (duly authorized)/ Sole Proprietor. Otherwise, valid and duly attested authority letter must be attached in favour of the person authorized to sign the bid/tender or correspondence and to attend the tender opening meetings. Failing with this, the bid shall not be entertained and he/she shall not be allowed to attend the tender proceedings.
    It is apparent, therefore, that the Technical Offer Form was a mandatory document to have accompanied the Technical bid. Furthermore, as per the Tender Document, it was the task of the tender opening committee to evaluate the technical offers of the bidders and to make the recommendation to respondent No.5. After the opening of the Technical offers, a period of 15 days was to lapse before opening the financial bids/offers of the technically qualified bidders. Clause 15 of the Tender Document listed out the documents/certificates which were to be submitted with the Tender Form for technical evaluation. The record further shows that the petitioner obtained 98% marks in the Technical Offer whereas respondent No.6 obtained 85% marks.
    7.Respondent No.5 committed a series of procedural missteps in the opening of technical/financial offers which has caused serious doubts on the transparency and validity of the entire process. The Instructions and the Terms and Conditions (the Instructions) of the tender document clearly required the bidders to place in the envelope the Technical Offer Form duly signed by the authorized person. Admittedly the envelope submitted by respondent No.6 for the first stage (Technical Offer) did not contain the Technical Offer Form. Respondent No.5, despite being the sole arbiter and final authority, without taking any decision on the lapse of respondent No.6 in submitting a non-responsive technical offer, evaluated the same for the purposes of granting marks and at the same time also referred the matter to respondent No.3 for its decision. It is not clear from the record whether respondent No.3 in reply passed on any instructions in the matter. The Instructions prescribed 15 days intervening period for opening of the financial bids from the date of the opening of the technical offers. Respondent No.5, however, without waiting for the said period to lapse and without any plausible reason informed the parties through letter dated 19.05.2016 for opening of the financial offers on 21.05.2016. The decision by respondent No.5 to open the financial offers/bids on 21.05.2016 was a clear violation of the tender document issued by respondent No.5.
    8.As respondent No.6 turned out to be the highest bidder, the petitioner filed C.M. No.2429 of 2016 seeking amendment in the writ petition by adding Ground FI and for incorporating an additional prayer clause in the petition. The said application was allowed on 20.06.2016 whereafter the amended writ petition was filed by the petitioner. Through the amendments, the writ petitioner sought fresh bidding process for the contract and undertook to match the bid of respondent No.6.
    9.This Court cannot accept the argument advanced by the respondents' side that the lapse on the part of respondent No.6 in not including the Technical Offer Form in the bid was not a material irregularity as it was inadvertently placed in the Financial Offer and was in fact proved to be so. The requirements contained in a tender notice can either be essential terms prescribing, for instance, the eligibility criteria or ancillary terms which are subsidiary to the main object. The former are mandatory whereas the latter can be deviated from and strict compliance thereof can be waived in appropriate cases. In the present case, the reading of clauses 1(a), (d) and (e) of the tender document clearly demonstrates that the duly signed Technical Offer Form was a mandatory requirement for which no relaxation could be awarded to respondent No.6. It may relevantly be pointed out that clause 1(e) of the tender document provided for the penal consequence in case of non-submission of duly signed Technical Offer Form. It is a matter of ordinary prudence that where there is no
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    power to relax, the same should ordinarily not to be exercised and the parties must be held to strictly comply with the essential condition of a tender. The Technical offer submitted by respondent No.6 violated the Instructions of the tender document which was also with the bids/offers of two other bidders who failed to submit the correct certificates from the Federal Board of Revenue. Respondent No.5 held the other two bidders to be ineligible for participation in the bidding process for having failed to submit the mandatory letter/certificate from the Federal Board of Revenue. The same standard of rejection was, however, not applied to the bid submitted by respondent No.6, which also violated a mandatory requirement of tender document. No reason was furnished by the respondents as to why the lapse on the part of respondent No.6 should not have operated as a competitive advantage to the petitioner. Respondent No.5, therefore, practically allowed respondent No.6 to cure the bid by announcing the opening of the financial bid ahead of its time to ascertain the correctness of the explanation offered by it. The non-adherence and relaxation from the prescribed condition of the tender document resulted in discrimination to the other biders. Even if it be held that absence of Technical Form was a minor irregularity that could be overlooked and that respondent No.5 retained discretion in the matter, respondent No.5 did not render any verdict on the matter by exercising his discretion stated to be vesting in him and instead referred the matter to respondent No.3. As alluded to earlier, the record does not show what determination was made by respondent No.3 on the issue of non-responsive bid of respondent No.6. It appears that the process was allowed to proceed by treating respondent No.6 to be qualified without deciding on the deficiency in the bid/offer by respondent No.6. The terms of advertisement for tender and the tender document do not reserve any discretion with respondent No.5 and this Court is not willing to accord such a power to the officials of Civil Aviation Authority. It is, thus, clear that opening of the financial bids by respondent No.5 was without lawful authority as the fate of the bid of respondent No.6 was not decided. Respondent No.5 by writing letter dated 19.05.2016 for opening of the Financial offer/bid committed yet another violation of the Tender document as the prescribed period of 15 days had not yet lapsed. This Court is, however, in agreement with the respondent's counsel that Public Procurement Rules, 2004 by their terms do not apply to the tender in question.
    10.The learned counsel for respondents Nos.1 to 5, during the course of arguments, submitted that the primary interest of Civil Aviation Authority is to generate revenue from the contract. The learned counsel for the petitioner also stated that there is no point in setting at naught the entire process of the bid as both the competing parties know the financial bids offered by them. He, therefore, suggested that the Civil Aviation Authority be directed to hold fresh bidding process with regard to the Financial offer and that the petitioner is willing to match the bid of respondent No.6. It was further stated that the petitioner is the existing contractor and its contract runs till September, 2016 and thus the issue of time does not matter.
    11.In view of the reasons stated above, this writ petition is allowed to the extent that letter dated 19.05.2016 issued by respondent No.6 is declared to be without lawful authority and of no legal effect. However, as the petitioner is desirous of competing with respondent No.6 and is willing to match the price quoted by respondent No.6 in its bid, keeping in view the public interest of achieving the best possible price, respondent No.5 is directed to hold the process afresh for seeking financial offers from the petitioner and respondent No.6 during the month of July, 2016 with prior intimation to them.
    KMZ/A-97/LPetition allowed.

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