When the tender categorically calls for financial bids in two separate envelopes for two separate jobs that were being tendered, submitting the bids in one cover vitiates the process, the Madras High Court said.
The tender involved cleaning the interiors of the buses and an advertising tariff for painting commercial communication on buses of the State transport corporation. The authorities had accepted the bid of one of the bidders who had submitted the financial bids for both the jobs in only one cover. His bid turned out to be the best in terms of the highest rate per bus offered for painting ads on its exteriors and lowest asked for cleaning the interiors of the bus — Rs 2,200 per month per bus was offered to the transport department for an ad painted on the exterior of a bus and Rs 40 expected from the department for cleaning the interior thus offering a net amount of Rs 2,160. The losing petitioner who offered the second best terms quoted figures of Rs 2,103 and Rs 393 respectively thus making his net offer to the department only Rs 1,710 per month per bus.
The Madras High Court partially accepted the challenge mounted on the award of the contract mounted by the second highest bidder. It accepted the contention that the award of contract was vitiated by non-adherence to the primary condition of the tender while brushing aside the contention of the winner that putting two commercial bids in a single sealed envelope was a mere small technical mistake. The court pointed out that it struck at the root of the terms of the tender in terms of which the winner should not have been allowed to participate in the first stage itself i.e. short listing in terms of the technical bids.
The Court went on to say that this however did not mean that the contract would go automatically to the petitioner on the rebound, the second best performer on commercial considerations. It was for the transport department to determine whether it would invite fresh bids or award the contract to the petitioner.
( The author is a New Delhi-based Chartered Accountant)