Homa Engineering Works, a registered partnership firm v. Oil & Natural Gas Corporation Limited, Neelam & Heera Asset through the Materials Management Section
2013-10-03
K.R.SHRIRAM, S.J.VAZIFDAR
body2013
DigiLaw.ai
JUDGMENT : S.J. Vazifdar, J. 1. The petitioners have challenged the first respondent’s decision to consider respondent No.3 – HAL Offshore Limited as a qualified bidder for the tender in question; the decision of respondent No.1 to declare respondent No.3 as the L-1 bidder in respect of the said tender and the decision of respondent No.1 to permit respondent No.3 to satisfy the bid eligibility criteria by giving an undertaking to comply with the technical specifications stipulated in the tender before the supplies are made. 2. In December, 2012, respondent No.1 published a Competitive Bid E-Tender for “revamp of safety system at Neelam and Heera Wellhead platforms”. The product in respect of which tenders were invited is a DCP Skid Fire Firing System 150 Kg capacity for offshore installation. The tenders were invited in the two-bid system viz a technical bid and a commercial bid. 3. Petitioner No.1 and respondent No.3 submitted tenders. According to the petitioners, respondent No.3 failed to satisfy the eligibility criteria and was, therefore, not entitled to have its price bid opened. 4. Mr. Dada, the learned senior counsel appearing on behalf of the respondent No.3 firstly contended that petitioner No.1 did not meet the requirements stipulated in clause 2.3.1 of the specification for DCP system. The relevant portions of clause 2 and 4 read as under : “2.0 GENERAL FEATURES ........ 2.1 Acceptance Criteria 2.3.1 Contractor shall supply the complete dry chemical skid, which shall be of the type listed by Underwriters Laboratory, UL or Factory Mutual, FM, approved as a complete unit ........ 4.9.1. Each dry chemical storage and discharge skid assembly consisting of one (01) dry chemical storage tank rated for 150 kilograms (+ 10 Kg) of potassium bicarbonate based powder. UL Listed/ FM approved quick opening nitrogen cylinder/s in quantity sufficient to meet performance and purge requirement. Necessary actuators, fittings and hoses for proper operation, and a common welded structural skid frame assembly with all components securely and permanently attached with lifting bar and lifting eye(s).” Mr. Dada submitted that it was mandatory for the bidders to specify and to make available the products at the time of the bid. He submitted that if the products were not specified and available at the time of the bid, the tenderer must be held to be ineligible. 5. We will, for the purpose of this petition, presume that the above clauses are mandatory.
He submitted that if the products were not specified and available at the time of the bid, the tenderer must be held to be ineligible. 5. We will, for the purpose of this petition, presume that the above clauses are mandatory. We are, however, unable to accept Mr. Dada’s interpretation of the clause. The interpretation placed by the petitioners upon clause 2.3.1. does not necessarily follow on a plain reading thereof. The words “shall supply” indicate the fulfillment of the requirement of supply in future. If the petitioners interpretation was correct, the clause would have been worded differently. It would then have required the bidders to make available the certification for the products on the date of the submission of the tenders. 6. In any event, we are unable to hold that the first respondent’s interpretation of the clause is unsustainable and irrational warranting interference in a Writ Petition under Article 226. The view taken by the first respondent is certainly a possible view and in such matters we would not be inclined to substitute our view for that of the first respondent unless it is absolutely necessary. To say the least, this is not a case where only one interpretation of the clause is possible. 7. The other provisions of the specification for DCP system militate against the petitioners’ interpretation of the clause. Clauses 6.4 and 6.5 read as under : “6.4 Inspection and Testing 6.4.1 The vendor shall carry out various tests as per applicable codes/standard. The test certificate shall be submitted to inspection Agency. 6.4.2 The inspection shall be carried out by an agency authorized by ONGC as described in NIT. 6.4.3 The OEM shall provide access to the Inspecting Agency for the Inspection of the Skid mounted Dry chemical Fire Fighting system at any stage during manufacturing as requested by the inspection Agency. 6.4.4 Stage of Inspection parameter Stage I: Material test certificate, different part inspection, Certificate of bought out item /component. Review of design as per ASME code etc. Stage II: Hydro test of DCP vessel, Inspection of Nitrogen Cylinder (PESO/CCE approval) and checking of documentation for different L/FM approved assemblies, Test Report of dry powder etc. The above tests are to be conducted on land before the dispatch of each unit to offshore platform.
Review of design as per ASME code etc. Stage II: Hydro test of DCP vessel, Inspection of Nitrogen Cylinder (PESO/CCE approval) and checking of documentation for different L/FM approved assemblies, Test Report of dry powder etc. The above tests are to be conducted on land before the dispatch of each unit to offshore platform. Stage III: At Platform – Commissioning & Performance testing 6.4.5 System performance test by actual discharge of powder for each DCP Skid. 6.4.6 Powder and nitrogen cylinder for testing is to be arranged by the firm. 6.4.7 Firm can use ordinary type dry powder for testing. However the specific gravity of powder shall be same as the powder finally going to be put inside the vessel. 6.5 Documentation Following documents will be required to be submitted after commissioning and installation. 6.5.1. Documentation for the all components which are UL LISTED/FM approved for dry chemical skid shall be required in three (03) sets. 6.5.2. Relevant ASME drawings and documents, technical catalogues, data sheets for components and operation, maintenance and service manuals three (03) sets bound for each dry chemical unit supplied; 6.5.3. Paint system specification documents including Material Safety Data Sheets of all coatings and paints used, to be provided in three (03) sets; 6.5.4. Provision of all testing, inspection and written records as required by the material specification and reference codes and standard including all material test certificates, hydro test, leak test reports, shop test and welding inspection reports and documentation in accordance with specification and scope of work. 6.5.5. Commercial data sheets and certificates including certificate for bought out items. 6.5.6. OEM’s test certificate for each component of DCP skid and Dry Chemical Powder meeting the specified technical specification along with shipping document. 6.5.7 Installation of the skid at the platform as per the suggested location of ONGC and to the satisfaction of Fire Protection and Safety of the platform. Work shall be carried out by the OEM or his authorized representative.” [emphasis supplied] 8. The above clauses establish that it was not necessary for the products themselves to be available on the date of the submission of the tenders. Nor do the provisions of the tender documents require the necessary certificates to be available on the date of the submission of the tender.
The above clauses establish that it was not necessary for the products themselves to be available on the date of the submission of the tenders. Nor do the provisions of the tender documents require the necessary certificates to be available on the date of the submission of the tender. In fact, stage-II of clause 6.4.4 clearly indicates that the checking of the documents for the different UL/FM approved assemblies was to be at the stage of inspection. The stage of inspection, in turn, was after the entire tender process was over and “before the despatch of each unit to offshore platform.” Clause 6.5 further requires the necessary documentation to be submitted “after commissioning and installation.” 9. Respondent No.1 applied its mind to the petitioners objections in this regard. There was a difference of opinion among the officers of respondent No.1. The Independent External Monitor (hereinafter referred to as “IEM”) constituted by respondent No.1 examined the entire matter in considerable detail and submitted its opinion under cover of a letter dated 24th July, 2013. The opinion/report clearly indicates that the IEM considered the rival contentions. The IEM, in fact, sought the first respondent’s response with respect to its final decision that the UL requirement was a part of the technical specifications vide clause 2.3 and was not a part of the bid evaluation criteria. The IEM also noted clause 6.4.4 which provided for checking of documents for UL at the second stage of inspection. The IEM enquired of respondent No.1 as to why it sought confirmation from respondent No.3 regarding the UL listing of the product on the date of the tender bid opening whereas it had now claimed that it was not required as per the BEC. The clarification was furnished by respondent No1. Respondent No.1 clarified that there was a difference of opinion on this issue in its technical department. A junior officer was of the view that it was required prior to the date of the tender bid opening. The senior executives took a different view. The issue was considered by the Tender Committee which came to the conclusion that there was no requirement in the bid evaluation criteria regarding the UL listing to be on the date on which the tenders were to be opened.
The senior executives took a different view. The issue was considered by the Tender Committee which came to the conclusion that there was no requirement in the bid evaluation criteria regarding the UL listing to be on the date on which the tenders were to be opened. It is after considering the material, the provisions of the tender documents and the explanation furnished, that the IEM accepted the first respondent’s contention that the documentation of the UL listing of the product is required to be submitted at the time of the supply. 10. The learned Additional Solicitor General’s reliance upon the bid evaluation criteria of the earlier contract is also well founded. He relied upon clause 3 of the earlier contract to contrast the same with clause 2.3.1 of the present contract. Clause 3 of the earlier contract required : “Valid certification (as on date of opening of the techno- commercial bid) of UL/FM approval should be submitted in the techno-commercial bid”. There is no such requirement in the present tender documents. 11. It is difficult to state that the views taken by the first respondent and the IEM are absurd or improbable. The first ground of challenge, therefore, is rejected. 12. Mr. Dada next submitted that respondent No.3 is ineligible in view of the following provisions of the tender documents : “B.1 REJECTION CRITERIA B.1.1 Technical rejection criteria The following vital technical conditions should be strictly complied with failing which the bid will be rejected. Bid should be complete covering the scope of supply, installation, hook up with existing system and commissioning and should conform to the technical specifications indicated in the bid documents, duly supported with technical catalogues/ literatures wherever required. Incomplete and non-conforming bids will be rejected outright. B.1.2 EXPERIENCE CRITERIA .......... b. Bidder should have executed atleast one contract for supply, installation and commissioning of DCP Skid of minimum 1150 Kg during the last 10 years to be reckoned from the date of techno-commercial bid opening.
Incomplete and non-conforming bids will be rejected outright. B.1.2 EXPERIENCE CRITERIA .......... b. Bidder should have executed atleast one contract for supply, installation and commissioning of DCP Skid of minimum 1150 Kg during the last 10 years to be reckoned from the date of techno-commercial bid opening. Note 1: If the bidder does not have the experience as mentioned at 1.2(a) and meeting the criteria at 1.2(b) above, then the bidder shall submit the MOU (which shall remain valid till completion of jobs awarded under the present tender and copy of valid MOU shall be submitted with the techno-commercial bid with a subcontractor who meets the experience criteria at 1.2(a) above Note 2: If the bidder does not have the experience as mentioned at 1.02(b) and meeting the criteria at 1.2(a) above, then the bidder shall submit the MOU (which shall remain valid till completion of all jobs awarded under the present tender and copy of valid MOU shall be submitted with the techno-commercial bid as per the proforma at Annexure IV) with a subcontractor who meets the experience criteria at 1.2(b) above To this effect, Bidder should submit copies of respective contracts/ work orders, along with documentary evidence in respect of satisfactory execution of each of those contracts/ work orders, in the form of copies of any of the documents (indicating respective contract/work order number and type of services), such as – (i) Satisfactory completion/performance report (OR) (ii) proof of release of Performance Security after completion of the contract (OR) (iii) proof of settlement/release of final payment against the contract (OR) (iv) any other documentary evidence that can substantiate the satisfactory execution of each of the contracts cited above at Para 1.2(a) & 1.2(b).” 13. The petitioners have an MOU with a sub-contractor viz. M/s. Vijay Fire. The Deputy Chief Engineer of respondent No.1, by a letter dated 7th April, 2013, opined that the bid of respondent No.3 ought to be technically rejected in view of clause B1.2 b above. Respondent No.3 contended that normally the manufacturer supplies the products and commissions the same. The installation is in the buyer’s scope. However, M/s. Vijay Fire had supplied such products to reputed companies, including Offshore EPC companies and had also commissioned the same. 14. Mr.
Respondent No.3 contended that normally the manufacturer supplies the products and commissions the same. The installation is in the buyer’s scope. However, M/s. Vijay Fire had supplied such products to reputed companies, including Offshore EPC companies and had also commissioned the same. 14. Mr. Dada, however, submitted that even according to the respondents, M/s. Vijay Fire had supplied only vehicle mounted DCP units which did not meet the requirements of the tender documents. 15. Clause 1.2 above, however, does not specify that the bidder or the sub-contractor with whom the bidder has an MOU should have supplied, installed and commissioned any particular type of the said product. In other words, clause B1.2 b does not exclude the supply, installation and commissioning of the vehicle mounted variety of the said product. 16. In the circumstances, the Writ Petition is dismissed. The interim order dated 7th August, 2013, shall continue upto and including 17th October, 2013. There shall be no order as to costs.