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2013 DIGILAW 1604 (BOM)

Philips Electronics India Ltd. v. State of Maharashtra, through the Medical Education & Drugs Department

2013-08-14

M.S.SONAK, S.J.VAZIFDAR

body2013
Judgment : 1. The petitioner seeks a writ of certiorari to set aside the decision of respondent nos.2 and 3 accepting the technical bid of respondent no.4 and an order restraining them from awarding the contract and/or implementing the contract in furtherance of the e-tender. The petitioner has also sought a writ of mandamus directing respondent nos.2 and 3 to award the contract under the tender in its favour. Respondent no.2 is the Directorate of Medical Education and Research, respondent no.3, is the Director of the respondent no.2 and respondent no.4 is Siemens Ltd. 2. The respondent no.2 floated a tender for the procurement of MRI Machines “3-TESLA”. The two bid system was followed. The first being a technical bid and the second being a commercial bid. Clause 10 of the TECHNICAL BID ( PART-I) is as under: 10. “USERS LIST:- The tenderer should submit user list of Quoted Model as per Annexure -IV:” ... Clause 1, 3 and 11 of the COMMERCIAL BID (PART -II) clause 3(i)(ii) reads as under:- 1. No price should be quoted in Part I (Technical Bid). If any price is quoted in technical bid, the entire tender will be tender as INVALID. 11. Annual Maintenance Contract (Labour Charges)/ Comprehensive Annual Maintenance Contract (Labour with 3.i) A hands on working demonstration is essential before opening part No.2 (commercial bid) Unsatisfactory performance as demonstration will disqualify the tenderer. Spares):- The tenderer will have to agree to enter into a annual maintenance contract (AMC) (Labour Charges) @ 1 % of the ordered value up to Rs.10 lacs of the equipment for Mumbai and 3% for all other places . For more than Rs.10 Lacs ordered value, at 0.5% for Mumbai and 1% for all other places . Where required tendered will have to agree for comprehensive maintenance (CMC) inclusive of all spares @ 5% of the ordered value of the equipment. The period of such AMC/CMC will be of 8 years after completion of warranty period. In case of noncompliance of AMC/CMC the supplier will be liable to pay a penalty. Such penalty shall be recovered from the amount of bank guarantee submitted as per sr.no.10 payment for AMC/CMC on yearly basis will be made by the user institution, at the end of year after satisfactory performance report from the end user.” 3. The technical specifications are set out in Annexure IX. Such penalty shall be recovered from the amount of bank guarantee submitted as per sr.no.10 payment for AMC/CMC on yearly basis will be made by the user institution, at the end of year after satisfactory performance report from the end user.” 3. The technical specifications are set out in Annexure IX. Clause 9 of Annexure IX in so far as it is relevant reads is as under:- 9. APPLICATION SOFTWARE: All available softwares at the time of purchase should be provided in their latest version with software upgrades regularly till the machine is in use. All the routine sequences and complete, neuro suite, orthosuite, cardiac imaging suite, body imaging suite, breast imaginf suite and oncology suite should be made available. oo. System should preferably offer Exam automation, Tool for Brain, Spine, Knee and Shoulder Imaging. (DOT or Smart Exam or similar software should be made available if present or may be quoted separately.)” We were informed that the petitioner has developed the “Smart Exam” software and respondent no.4 Siemen’s Limited has developed the DOT software. 4. The petitioner contends that at the pre-bid meeting held on 16.6.2012, it was decided that it would quote its model with Smart Exam Software and respondent no.4 would quote its model with the DOT software. This alleged decision is not reflected anywhere including in the minutes, which the petitioner claims it received only on 23.3.2013 in response to an RTI application. 5. On 22.8.2012 the petitioner and the respondent no.4 submitted their bids. On 9.10.2012 the bidders demonstrated their machines. The petitioner states that it was not present when the demonstration of the machine of respondent no.4 took place. A further demonstration of the petitioner’s machine took place on 16.10.2012. 6. Mr. Dwarkadas, the learned Senior Counsel appearing on behalf of the petitioner, contended that the fact that clause 9(oo) referred to the DOT and the Smart Exam Software (SES) in Clause 9 indicated two things. Firstly, that the option of providing similar software required such software to be of the same level qualitatively. Secondly, as the petitioner and the respondent no.4 had admittedly developed the Smart Exam Software and the DOT software respectively, it was necessary for them to provide their respective software and not any other software. In other words, the facility of providing similar software was not available to the petitioner and to respondent no.4. 7. Secondly, as the petitioner and the respondent no.4 had admittedly developed the Smart Exam Software and the DOT software respectively, it was necessary for them to provide their respective software and not any other software. In other words, the facility of providing similar software was not available to the petitioner and to respondent no.4. 7. The first submission we will presume is well founded. The second contention, however, is not well founded. Clause 9(oo) does not make it mandatory for the petitioner and the respondent no.4 to offer the MRI machines only with their respective softwares. Had it been so, the clause would have been worded differently. It would have specified such a requirement. Nor was our attention invited to any often provision of the bid documents that stipulated such a requirements. The petitioner and respondent no.4 were entitled to provide a machine with any software so long as it complied with the tender specifications. 8. The question, however, would be whether the “similar software” is comparable qualitatively or functionally to the DOT or the SES Software. That is a aspect for the respondent nos.1 and 2 to decide with the assistance of experts or other persons in the field. 9. The bid of the petitioner and respondent no.4 were found valid and to confirm to the requirement of the bid documents in all respects, including in respect of the required software. The respondents did not contend that the petitioner’s bid was not responsive. It is, therefore, not necessary for us to consider the validity of the petitioner’s bid. It is necessary only to consider the validity of the bid of respondent no.4 as that has been challenged by the petitioner. 10. Respondent no.4 submitted its technical and commercial bid for the equipments, namely Siemens MAGNETOM Verio 32 Channel System with Auto Align Software and Total Imaging Matrix (TIM) Software technology engine. Respondent no.4 contends that this technology meets the requirement of the tender specifications in that. It contends that the software is not only similar to the DOT and/or Smart Exam Software Technology, as provided in Clause 9 (oo), but it is in fact superior to a better than the Smart Exam Software offered by the petitioner. Further, respondent no.4 was subsequently willing to provide the DOT software free of cost to the respondent no.2. The same, therefore, did not render the bid of the respondent no.4 non responsive. Further, respondent no.4 was subsequently willing to provide the DOT software free of cost to the respondent no.2. The same, therefore, did not render the bid of the respondent no.4 non responsive. 11. There was a gap of more than 6 months from the date of submission of the bids and the date of opening of the commercial bids. Accordingly, in January 2013, respondent no.4 informed the other respondents that it was willing to provide an upgrade DOT engine/technology with the quoted system free of cost. Mr. Dhond, the learned Senior Counsel, appearing on behalf of the respondent no.4 relied upon the brochure of respondent no.4 which referred to the MAGNETUM system “with DOT Integration”. The brochure indicates that the systems are equipped with TIM engine and DOT. It further indicates that the model with the new systems were now available with DOT or as an upgrade for installing systems. The brochure also furnishes information of the TIM and DOT technologies. 12. Mr. Dhond submitted that the additional/improved software free of cost was also in keeping with the opening part of Clause 9 which provides that all available softwares at the time of purchase should be provided in their latest version with software upgrades regularly till the machine is in use. 13. Mr.Dwarkadas submitted that when respondent no.4 made its bid, it had not offered the latest technology, as a result of which it was able to quote the price much lower than that of the petitioner. On the other hand, the petitioner submitted its bid taking into consideration the latest software technology. In the result, respondent no.4 derived an unfair price advantage. He submitted that the petitioner’s bid was not in accordance with the requirements of the bid documents. 14. Whether the bids conform to the technical specifications or not is a highly technical matter, which must normally be left to the experts. The question is whether respondent nos.1, 2 and 3 have applied their mind and come to an informed decision that the bid of the respondent no.4 conforms to the tender specifications. We are of the opinion, that they have. 15. Respondent no.2 has filed a report of the pre-bid meeting. It records that the petitioner and the respondent no.4 agreed that the Vario 3T Model i.e. Model offered by the respondent no.4 and Achieva TX Model offered by the petitioner were the closest comparisons. 16. We are of the opinion, that they have. 15. Respondent no.2 has filed a report of the pre-bid meeting. It records that the petitioner and the respondent no.4 agreed that the Vario 3T Model i.e. Model offered by the respondent no.4 and Achieva TX Model offered by the petitioner were the closest comparisons. 16. By a letter dated 16.10.2012 the petitioner raised objections in respect of the bid submitted by respondent no.4 on the ground that respondent no.4 had quoted its machine with DOT engine which had not been installed anywhere in India and therefore was liable to be rejected on account of lack of past performance. Mr. Dwarkadas, had also relied upon the clause 3 of the Commercial bid set out above which requires hands on working demonstration before opening the commercial bid. Clause 3 also provides that unsatisfactory performance at demonstration would disqualify the tenderer. However, as we noted earlier, the DOT software was offered as an addition to the system/software that had been offered by respondent no.4 with the bid. The question, therefore, is whether the bid as originally offered conformed to the requirement of the bid documents. 17. An internal communication addressed to the Director of ME&R Department dated 10.10.2012 shows that the respondent’s experts referred to the demonstration given by respondent no.4 on 9.10.2012 and stated that they found that the machine conformed to the technical specifications and worked satisfactorily. The report also indicates that the technicians did not find the petitioners machine to have worked satisfactorily and therefore called upon the petitioners to arrange the further demonstration. The petitioner therefore, gave a demonstration of its machine on 16th October, 2012. The same was found in order. Accordingly, under cover of a letter dated 19th October, 2012, the reports of the first respondent's experts were forwarded to the DMER. 18. Respondent nos.1, 2 and 3 did not stop there. They considered the petitioner’s complaint dated 16.10.2012. The result of their findings were communicated to the Director, Medical Education and Research by a communication dated 5.12.2012. The report once again confirmed that the Committee had attended the demonstration of the machines with the specifications quoted in the bid. The report in respect thereof was submitted to the Directorate under cover of a letter dated 19.10.2012 which was tendered in court. That report confirms that the machines of which demonstration was given conformed to the tender specifications. The report once again confirmed that the Committee had attended the demonstration of the machines with the specifications quoted in the bid. The report in respect thereof was submitted to the Directorate under cover of a letter dated 19.10.2012 which was tendered in court. That report confirms that the machines of which demonstration was given conformed to the tender specifications. 19. On 16.12.2012 the petitioner filed another complaint. It contended that the software offered by respondent no.4 did not meet the specifications. Respondent nos.1, 2 and 3 conducted a meeting on 10.1.2013 to consider this complaint. The meeting was of three experts namely, the Professor and Head of Department, Department of Radiology, K.E.M. Hospital, (a government hospital), the Consultant Radiologist, Radiology Department, Lilawati Hospital, (a private hospital) and the Consultant Radiologist, G.T. Hospital (a government hospital). Accordingly, respondent nos.1, 2 and 3, constituted a Committee of independent experts to review the petitioner’s objections. The Committee studied the specifications and tender documents and submitted a report. The Committee confirmed that the model quoted by respondent no.4 met the specifications and complied with the requirements as given in the specifications. The Committee, in fact, observed that the bids of the petitioner and the respondent no.4 should be accepted as complying with the specifications. 20. We are satisfied, therefore, regarding the decision making process adopted by respondent nos.1, 2 and 3. They evaluated the bids themselves. They did not ignore the petitioner's complaint. They considered the complaint themselves. They also constituted a Committee of independent experts from Government and private hospitals. All the reports confirm that the bid of the respondent no.4 was responsive and met with the requirements stipulated in the tender documents. 21. In the circumstances, it is not possible for this court in exercise of powers under Article 226 to sit in appeal over the decision of respondent nos.1, 2 and 3 and the experts appointed by them. 22. Mr. Dwarkadas, then submitted that the bid of the respondent no.4 ought to be rejected on the ground that respondent no.4 had disclosed an element of the price bid in its technical bid which was contrary to clause 1 of the Commercial bid, which stipulated that no price should be quoted in the technical bid and that if any price is quoted in the technical bid, the entire tender would be considered invalid. 23. 23. The bid submitted by the respondent no.4 comprised not merely of the specifications of the main equipment namely the M.R.I. machine, but also the local bought out accessories supplied therewith and the entire turnkey work for installation of the equipment. Respondent no.4 offered inter alia PACS system in addition to the main equipment. Respondent no.4 also disclosed a Comprehensive Maintenance Contract (CMC) offered by it to respondent no.2 and attached a technical note of the bought out items to PACS system by its third party supplier. Due to oversight only the CMC charges post the warranty period of 5 years i.e. for additional 5 years remained to be blanked out from the technical bid. What is important however is that this item had no relevance to the contract price or to the bid. Moreover, it related to the period after the warranty period. The financial bid dealt with the price of the main equipment and the 5 year warranty period. 24. In the circumstances, the writ petition is dismissed. There shall be no order as to costs. This order shall remain stayed upto and including 15th September, 2013.