High Court of Bombay at Goa Hears Writ Petition Against Tender Disqualification in Hospital PPP Project. Bid Rejected as Non-Responsive Due to Asterisks and Alleged Violation of Finance Department Concurrence Rules Under Rules of Business of the Government of Goa, 1991.

Case Note & Summary

The writ petition before the High Court of Bombay at Goa arose out of a tender process for the development, operation and management of a 290-bedded District Hospital in Mapusa on a Public Private Partnership (PPP) basis. The Government of Goa, through its Health Department, had issued a Request for Proposal (RFP) inviting bids. After pre-qualification and technical evaluation, three bidders—Apollo Hospitals, Chennai; Shalby Limited (the petitioner); and Radiant Life Care Private Limited (respondent no.3)—remained. Their technical scores were 76.05, 77.95, and 89.20 respectively. On 2 June 2011, financial offers were opened. Bidders were required to quote an annuity grant, which could be positive (payable by the government) or negative (receivable by the government). Apollo quoted a positive annuity grant of Rs. 500 crore; Radiant quoted Rs. 39.40 crore. The petitioner’s financial offer, however, did not state a numerical amount. Instead, it contained two asterisks in the amount column followed by an explanatory paragraph stating that the company did not demand any subsidy from the government and requested no compensation. Other bidders objected. The Consultant, ICRA Management Consulting Services Ltd., opined that the petitioner’s bid was non-responsive and invalid because it was not in the prescribed format. The consultant noted the absence of a monetary figure and held that the bid did not conform to the RFP requirements. Based on this report, the Project Appraisal Committee (PAC) met on 7 June 2011 and disqualified the petitioner, recommending respondent no.3’s bid for award. On the same day, a Letter of Intent was issued to Radiant Life Care Private Limited. The petitioner approached the High Court by way of a writ petition, contending that its bid was not ambiguous and should have been treated as a ‘nil’ annuity grant. It argued that the use of asterisks was merely to amplify the offer due to space constraints and that the omission of the word ‘Annual’ in the cost submission format was an accidental error that did not change the fact that the figures quoted were annual. The petitioner further contended that the Letter of Intent was issued without the concurrence of the Finance Department, as required by the Rules of Business of the Government of Goa, 1991, and was therefore illegal. The respondents, including the State of Goa and Radiant Life Care, argued that the petitioner’s bid was non-responsive because it deviated from the mandatory format. They relied on the consultant’s opinion and the legal opinions obtained, which stated that the bid was not in conformity and was ambiguous. The learned Advocate General submitted that the petitioner had no reason to make a long-winded statement instead of simply filling in the required amount. The court heard oral arguments and reserved judgment. The matter was listed for final hearing with consent, and rule was made returnable forthwith. The excerpted judgment text, which forms part of the oral pronouncement, ends abruptly during the respondents’ submissions. Consequently, the court’s analysis, reasoning, and final decision are not available in the provided text. The issues identified involved the interpretation of the RFP clauses relating to financial bid format, the degree of permissible deviation, and the applicability of the Business Rules to the tender’s financial decisions. The case remains undecided in this excerpt.

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Issue of Consideration

Law Points