Public procurement

Plaintiff / company was aggrieved of issuance of Letter of Award in favour of defendant / company, despite reversal of decision of Procurement Committee by Complaints Redressal Committee (CRC)

Validity

Review Committee disagreed with the CRC and the Project Consultant that deviations in the bidding documents of plaintiff / company were minor

As per Review Committee, the deviations were of mandatory requirements but Review Committee did not notice relevant clause of bidding documents and Regulation No. 7.6(B)(i)(2) of Procurement Regulations (Works) had already classified which deviations were to be treated as minor and which ones as major

As per evaluation report of Project Consultant even bidding documents submitted by defendant / company were with similar minor deviations

Without discussing report of Project Consultant, the Procurement Committee had proceeded to award the contract to the defendant / company, who had quoted the highest price for the Project

Such material aspect of the matter was ignored by Review Committee

Even if the order passed by Review Committee was within its jurisdiction, it was prima facie the result of misreading of record and an erroneous interpretation of the Sindh Public Procurement Rules, 2010

High Court confirmed interim injunction already passed in favour of plaintiff / company

Application was allowed, in circumstances.

Petitioner was aggrieved of bidding process finalized in violation of criteria for selection of beneficiaries without receiving applications for drilling and development of bores to provide water for agriculture purposes

Contention of authorities was that identification of sites and beneficiaries would be done after bidding process

Validity

Earlier a judgment was passed from High Court as well as from Supreme Court on the same issue and the petition was accepted

Procurement process for installation of bore for agriculture purpose in the area concerned was neither in accordance with guidelines provided by Planning Commission of Pakistan nor in accordance with the criteria laid down by authorities in the light of decision of Provincial Cabinet

High Court directed the authorities not to include vague projects in Public Sector Development Programs (PSDPs) in violation of guidelines provided by Planning Commission of Pakistan as well as law settled by High Court and Supreme Court

High Court set aside procurement process in question

Constitutional petition was allowed accordingly.

Grievance of petitioners was that despite supply of goods, their final payments were not released by respondent/authorities who were forcing them to give rebates in prices

Validity

There was no legal justification to force petitioners to give rebates to the tune of 15% to 20% with respect to fully executed and duly performed contracts at the time of making payments to them

This was an arbitrary, unreasonable and capricious act in colorable exercise of authority and offended R. 62 of Punjab Procurement Rules, 2014 and express contractual stipulations and this was also against principle of transparency enshrined in R. 4 of Punjab Procurement Rules, 2014

Transparency in procurement process not only envisages that procurement should be made through transparent, open and competitive processes at the lowest price but also equally safeguards and protects right of technically qualified lowest bidder to receive timely payment against successfully performed contract

Mere fact that payments were not made to petitioners within thirty days with respect to Second Contract, Third Contract and Fourth Contract was sufficient to establish that petitioners were being pressurized, coerced and blackmailed to satisfy unlawful demand of rebates of respondents/ authorities

Rights of petitioners after successful performance of their respective contracts awarded after due process of law were fully protected in terms of Arts. 4, 18, 24 & 25 of the Constitution and Ss. 16 & 23 of Contract Act, 1872

High Court directed the respondents to forthwith release complete contract prices to petitioners

High Court further directed Competent Authority to take appropriate steps to ensure transparency in public procurements

Constitutional petition was allowed, in circumstances.

Grievance of petitioners was that despite supply of goods, their final payments were not released by respondent/authorities who were forcing them to give rebates in prices

Validity

There was no legal justification to force petitioners to give rebates to the tune of 15% to 20% with respect to fully executed and duly performed contracts at the time of making payments to them

This was an arbitrary, unreasonable and capricious act in colorable exercise of authority and offended R. 62 of Punjab Procurement Rules, 2014 and express contractual stipulations and this was also against principle of transparency enshrined in R. 4 of Punjab Procurement Rules, 2014

Transparency in procurement process not only envisages that procurement should be made through transparent, open and competitive processes at the lowest price but also equally safeguards and protects right of technically qualified lowest bidder to receive timely payment against successfully performed contract

Mere fact that payments were not made to petitioners within thirty days with respect to Second Contract, Third Contract and Fourth Contract was sufficient to establish that petitioners were being pressurized, coerced and blackmailed to satisfy unlawful demand of rebates of respondents/ authorities

Rights of petitioners after successful performance of their respective contracts awarded after due process of law were fully protected in terms of Arts. 4, 18, 24 & 25 of the Constitution and Ss. 16 & 23 of Contract Act, 1872

High Court directed the respondents to forthwith release complete contract prices to petitioners

High Court further directed Competent Authority to take appropriate steps to ensure transparency in public procurements

Constitutional petition was allowed, in circumstances.

Appellant was successful bidder who submitted bid security but due to non-filing of performance security, respondent / authority forfeited its bid security

Validity

Principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned but it is intended to prevent arbitrariness or favouritism and is exercised in the larger public interest or if it is brought to the notice of the Court that in the matter of award of a contract power has been exercised for any collateral purpose

Government undertakings and statutory bodies should have free hand while framing terms and conditions of tender and Courts ought not to interfere with the same unless there is material on the record to demonstrate that they are arbitrary, discriminatory, mala fide or actuated by bias

Court cannot interfere with terms and conditions of a tender because it feels that some other term in the tender would have been fair, wiser or logical

Courts should normally not interfere in the contractual matters in exercise of powers of judicial review and it can only be exercised in case it is satisfied that the process adopted was mala fide or made to favour someone or the process adopted or decision made is so arbitrary that no man of ordinary prudence could have reached

There was no arbitrariness, favouritism or exercise of power for any collateral purpose by respondent / National Highway Authority in annulling bidding process and forfeiting bid security furnished by appellant / bidder

It was appellant's / bidder's obligation to submit its bid in conformity with the requirements of bidding document ITB (Instructions to Bidders)

Respondent / authority did not commit any illegality by not entertaining appellant's / bidder's belated request to treat its financial bid as Rs.260,772,272/- instead of Rs.4,082,400,000/

If Division Bench of High Court were to hold otherwise, it would amount to rewriting the terms of bidding documents

Annulment of award and forfeiture of bid security furnished by appellant / bidder was done by National Highway Authority in conformity with the requirements of relevant clauses of ITB

High Court declined to interfere in judgment passed by Judge in Chambers of High Court in exercise of constitutional jurisdiction

Intra Court Appeal was dismissed in, circumstances.

Incorrect entries made in Certificate Form IT-1 by petitioners were such that they had a bearing on the contract price and therefore, could not have been changed in the process of providing clarifications

Allowing a negligent bidder to make amendments in his bidding documents would amount to conferring an undue advantage and preferential treatment to such bidder and a reciprocal disadvantage to other competing bidders

National Highway Authority did not commit any illegality by rejecting petitioners' bid document as non-responsive on the basis of incorrect entries made in Certificate Form IT-1 submitted by them along with their bid

Once a bidder was declared as the most responsive bidder in terms of evaluation report issued by procuring agency, there was nothing preventing procuring agency from negotiating contract price with such bidder prior to award of contract

Such negotiation was permissible within the parameters set out in R. 40 of Public Procurement Rules, 2004

High Court declined to interfere in bidding process

Constitutional petition was dismissed, in circumstances.

Capital Development Authority could not refuse to issue tender documents to an applicant on the ground that it would not satisfy criteria for award of contract

No evaluation of petitioner's credentials took place at the stage when it approached Capital Development Authority for purchase of tender documents

Petitioner company had not been adjudged defaulter or a bad performer of its contractual obligations

Petitioner company was also not blacklisted by Capital Development Authority or any other government department or autonomous body in accordance with requirements of R.19 of Public Procurement Rules, 2004

High Court declared refusal on the part of Capital Development Authority to issue tender documents to petitioner company, as without lawful authority and of no legal effect

Constitutional petition was allowed, in circumstances.

Appellant authority was aggrieved of order passed by Judge in Chambers of High Court directing release of pay orders deposited by respondent bidder in relation to tender in question

Validity

Respondent bidder conditionally agreed to extension in bid validity period that proposed to change substance of its bid which was impermissible under R.26(4)(b) of Public Procurement Rules, 2004

Condition proposed by respondent bidder for extension of bid validity period was not accepted by appellant authority

Letter of intent issued by appellant authority did not form an agreement for extension of bid validity period under R.26 of Public Procurement Rules, 2004

Division Bench of High Court declined to interfere in order passed by Judge in Chambers of High Court as the same was in consonance with the letter and spirit of R.26(4)(c) of Public Procurement Rules, 2004

Suit instituted by respondent bidder related to another tender and recourse to remedy of suit in that transaction did not stand in the way of respondent bidder to assail letter of intent, as the same was issued without lawful authority and was of no legal effect

Remedy of arbitration visualized under R.49 of Public Procurement Rules, 2004, which provided for resolution of disputes between parties to the contract was not available in the present case as there was no contract as defined in R.2(e) of Public Procurement Rule, 2004, inter se the appellant authorities and respondent bidder

Dispute was essentially related to extension of bid validity period under R.26 of Public Procurement Rules, 2004

Intra Court Appeal was dismissed, in circumstances.

Petitioner without availing remedies provided under Sindh Public Procurement Rules, 2010, assailed order disqualifying it from tender proceedings

Validity

Petitioner could not prove eligibility criteria as mentioned in Tender Notice in order to determine its eligibility as per law

If bidder whose bid was determined to be the lowest but who did not have capability to perform the contract his bid was to be rejected

Petitioner after decision of Grievance Redressal Committee did not approach to Review Committee through filing an appeal as provided in R. 32 of Sindh Public Procurement Rules, 2010

Petitioner approached High Court without availing remedy of appeal

High Court declined to interfere in the matter as decision of disqualifying petitioner from tender proceedings was neither against the law nor any substantial error or procedural defect was committed and no material point of law was left undecided

Constitutional petition was dismissed, in circumstances.

Held, there was no cogent material from which it could be gathered or ascertained that procurement proceedings were marred by any procedural lapses on the part of authorities or Grievance Redressal Committee

Petitioner failed to make out any case as to arbitrariness or contravention of Public Procurement Rules, 2004, which could require remedy by way of judicial review

Bare allegations that proper right of audience was not affording in the matter by Grievance Redressal Committee was not a factor that could be agitated by petitioner for seeking a writ to set aside procurement process

Element of public interest was lacking from challenge mounted by petitioner company

High Court declined to interfere in the matter keeping in view the scope of Request for Procurement and time sensitive nature of works to procure any undue interference that could hamper if not cripple national participation in the Expo

Constitutional petition was dismissed, in circumstances.

Petitioner assailed pre-qualification bid process for procurement of event management services by respondent authorities declaring him disqualified

Validity

Provisions of Public Procurement Rules, 2004 envisaged that while engaging in pre-qualification, a procuring agency could tailor evaluation criteria while taking into consideration relevant experience and past performance; capabilities with respect to personnel, equipment, and plant; financial position; and appropriate managerial capability, along with any other factor that the procuring agency could deem relevant which was not inconsistent with Public Procurement Rules, 2004

No cogent factor has been raised as to conclude, keeping in mind the size and nature of the event, that the requirement as to experience or financial standing ought not to have been incorporated in the manner imposed

Fate of petitioner's challenge turned on a determination of whether its disqualification in light of the criteria could be termed unreasonable, which entailed an assessment of whether or not the same ensued for reasons that could reasonably be regarded as being valid

Letters issued by bank did not qualify as an unequivocal expression of an available credit line in favour of petitioner

Such letters reflected a tentative arrangement contingent on further processes, evaluations and approvals, that too by or at the behest of a third party

Authorities did not act unreasonably in withholding marks from the petitioner on such score

High Court declined to interfere in the matter as no substantial case on merit as to arbitrariness or a contravention of Public Procurement Rules, 2004, could be made out so as to require remedy through judicial review

Constitutional petition was dismissed, in circumstances.

Lump sum payments were to be made to plaintiff under the contract against completion of specific milestones and not against any delivery of specific equipment

Defendant authorities terminated the contract for failure of plaintiff company to achieve required milestones in time frame fixed in contract

Validity

Defendant authorities issued purchase orders and contracts entered into because of extreme urgency created by plaintiff's failure to complete project almost three years after completion date

Continued extraction and resulting depletion of gas from same reservoir by other companies from adjacent fields and further delay would result in the purpose of the project defeated as no gas could be left to produce

Even if such purchase orders were issued and contracts were entered in violation of Public Procurement Rules, 2004, that would not entitle plaintiff to specific performance of the contract and at the best it required defendant authorities to issue new tenders for the equipment and remaining work resulting in the contract to remain terminated

Unless plaintiff proved otherwise, Court had to presume that money was adequate compensation for breach of contract

Contract could not be specifically enforced and no injunction could be granted to prevent its breach

Plaintiff failed to establish that money would not adequately compensate it for breach of contract, even if the contract was an agreement for sale of goods, it could not be specifically enforced under S.58 of Sale of Goods Act, 1930

Even if restrictions under Ss.12 & 21 of Specific Relief Act, 1877, could be circumvented and it was not an agreement for specific and ascertained goods

Plaintiff could provide defendant authorities with any Amine or HCDP package

High Court was to decide a private dispute in its civil original jurisdiction under S.9, C.P.C., which jurisdiction was circumscribed by law

High Court could not grant any relief which was specifically barred by a statute

High Court was bound by restrictions prescribed in Specific Relief Act, 1877

Relief of injunction was discretionary and Court was not bound to grant it in every case and it was not to be granted unless Court was satisfied as to its real need

Discretion was to be exercised in accordance with reasons and sound judicial principles

Court while dealing with application for grant of injunction had to look and assess all circumstances obtaining the suit and more so to equitable relief

Discretion vested in Court of law had to be exercised judicially and equitably ensuring all the times that justice was adequately applied and administered

High Court declined to grant interim injunction in favour of plaintiff as it failed to make out a prima facie case in its favour

Application was dismissed, in circumstances.

Whether a particular agreement falls within one or the other category depends upon object and intent of parties, as evident by terms of contract, the circumstances in which it was entered into and custom of the trade

Substance of matter and not the form what is of the importance

If contract involves sale of moveable property as moveable property, it constitutes a contract for sale

If contract primarily involves carrying on of work involving labour and service and use of materials is incidental to execution of work, the contract would constitute a contract of work and labour

One of the circumstances which is of relevance is whether the article which has to be delivered has an identifiable existence prior to its delivery to purchaser upon payment of price

If article has an identifiable existence prior to its delivery to purchaser and when title to property vests with purchaser only upon delivery, that is an important indicator to suggest that contract is a contract for sale and not a contract for work.

Aberrations and procedural improprieties in award of public contracts can be examined by Grievance Redressal Committee constituted by procuring agency or by Court through process of judicial review even after award of contract.

Whenever public procurement is made without calling for tenders and instead on nomination basis, it excludes large number of persons who could have participated and got orders

Public procurement by nomination is exclusionary in nature and kills competition in market often leading to higher expenditure for public procurer

Plea raised by petitioner was that constituting second Redressal of Grievance Committee was against the provisions of Balochistan Public Procurement Regulatory Authority Rules, 2014

Validity

Promulgation of Balochistan Public Procurement Regulatory Authority Rules, 2014, was to be followed in its letter and spirit

Procurement authority had no power to act beyond the rule to supersede the Rules

All public bodies making procurement decision must adhere to the Rules; mandatory upon procuring agencies to abide by the procedure

Any act which was required to be done in a particular manner, same should have been done in that manner

Constituting second Grievance Redressal Committee was not provided in Balochistan Public Procurement Regulatory Authority Rules, 2014

Nobody could be penalized by the act of public functionary

High Court declared constitution of second Grievance Redressal Committee as illegal and without lawful authority

Constitutional petition was allowed, in circumstances.

Khyber Pakhtunkhwa Procurement Regulatory Authority without setting aside the contract, directed Procurement Entity to consider financial bid of respondent also

Validity

Once financial bid was opened and contract was awarded, then order to Procuring Entity to consider financial bid of respondent without setting aside financial bid and award of contract to petitioner was inappropriate and irrational

Decision of Khyber Pakhtunkhwa Procurement Regulatory Authority resulted in absurd consequences and such order was not sustainable

Sanctity could not be attached to contracts which had already been concluded and it would not prevent Constitutional Courts from exercising its jurisdiction, when such contracts were found to have been unlawfully executed

Financial bid could not be allowed to be opened twice unless first opening of such bid was specifically set aside

High Court set aside order passed by Khyber Pakhtunkhwa Procurement Regulatory Authority, as well as steps taken by Procuring Entity in pursuance thereof which were unlawful, null and void

Constitutional petition was allowed, in circumstances.

Petitioners were aggrieved of awarding of contract for supply of motor vehicles registration numbers with Radio Frequency Identification (RFID) technology

Validity

Petitioners failed to substantiate any mala fide intention or ulterior motives on the part of Sindh Government that exemption was granted to provide any preferential treatment or favoritism

Petitioners also could not establish that while granting exemption to enter into a contract on fulfillment and ensuring certain conditions, Sindh Government was somewhat engaged or committed any corrupt and fraudulent practices as defined under R. 2(q) of Sindh Public Procurement Rules, 2010

Under G2G contracts, monitoring task or audit exercise to ensure transparency and fairness or repressing any corrupt and fraudulent practices was more easygoing and comfortable from both the sides with sheer commitment to religiously fulfill their contractual obligations due to restraint of double check command in the affairs on Government to government level

Respondent Authority was an autonomous body but it was under the administrative control of Federal Government

Such was a government to government contract and according to decision taken in minutes of meeting, Sindh cabinet considered proposal of Excise, Taxation and Narcotics Control Department for introducing new number plates and according to the decision, case of new number plates was to be negotiated

Features of tracker integrated in RFID must be vetted by well reputed tracking service providers so that tracker features of new number plates could be more effective

High Court observed that all law enforcement agencies must be consulted for improvised and standard number plates and all legal and administrative aspects of G2G must be followed in letter and spirit

Exemption was granted by Cabinet under S.21 of Sindh Public Procurement Act, 2009 which could not be declared illegal or contrary to powers conferred by the statute

Constitutional petition was dismissed, in circumstances.

Appellant company participated in bidding process and after it was disqualified assailed evaluation criterion of technical bid

Validity

Procuring Agency was enabled under R.25 of Public Procurement Rules, 2004, to require from bidders to furnish bid security but it did not restrict procuring agency to act under R.29 of Public Procurement Rules, 2004 to formulate an appropriate evaluation criterion listing all information against which a bid was to be evaluated

Such evaluation criteria (within frame of law) formed an integral part of bidding documents

Appellant company was aware of tender conditions participated in tender and could not challenge or dislike prerequisites meant for technical qualification

Appellant company could only expect judicious treatment within the playing rules

Held, it was too late for appellant company when it realized that playing conditions were not palatable to it

Situation faced by appellant company was not res integra

Any term within frame of law was not open for judicial review even under the hierarchy of procurement laws

Procuring agency was enabled under R.25 of Public Procurement Rules, 2004 to require bid security not exceeding five percent of bid price to be furnished by every bidder and procuring agency could save its effectiveness for a period as they required in terms of R.26 of Public Procurement Rules, 2004

High Court declined to interfere in tender process which led to award tender in favour of respondent

Appeal was dismissed, in circumstances.

Petitioner impugned order of Ministry of Petroleum whereby it was blacklisted from procurement process and its bid security for tender for a public procurement by said Ministry was forfeited

Contention of petitioner, inter alia, was that it was blacklisted on account of fraud and fabrication of documents by an agent of petitioner and not the petitioner itself

Validity

Question as to whether fabrication was done by an agent and whether petitioner had no knowledge of such fraud was a controversial question of fact, which could not be resolved without recording of evidence, and such exercise could not be undertaken by High Court in its Constitutional jurisdiction

Constitutional petition was dismissed, in circumstances.

Order for blacklisting involved civil consequences and such an order could only be passed after due notice and an adequate opportunity of hearing to person against whom such order was proposed to be passed and requirement of issuance of show-cause notice had to be complied with.

Petitioner sought cancellation of tender for installation of water-supply on lands allegedly belonging to petitioner and his forefathers

Validity

Petitioner was neither owner of said land nor his name was mentioned in mutation entries and he had no concern with the same; and therefore he did not fall within definition of "aggrieved person" in context of Art.199 of Constitution

Sine qua non for initiation of proceedings under Art. 199 of Constitution was that petitioner should have locus standi

Constitutional petition being not maintainable, was dismissed, in circumstances.

Petitioner was aggrieved of award of tender to respondent by Complaint Redressal Committee for supply of medical equipment

Validity

Successful bidder did not confirm to requirement of financial soundness and Complaint Redressal Committee accepted bid of a non-compliant party, despite such non-compliance having been confirmed thereto by Central Procurement Committee upon express directions of Complaint Redressal Committee itself

Authorities failed to substantiate rationale for having accepted a bid from a party that was found to have failed upon criteria of financial soundness and was also unable to justify their abject disregard of such fact in arriving at decision in question

Acceptance of bid in manifest non-conformity with prescription of tender itself from a participant admittedly disqualified upon anvil of financial soundness criteria could not be sustained

Subsequent interpretation of tender criteria in derogation of express provisions thereof despite same respondent having found participant and its products non-responsive earlier in respect to same tender was unjustifiable

Award of tender to procure products deemed hazardous to public health by authorities and same could not be justified upon anvil of public interest

High Court set aside decision made by authorities in favour of respondent as same was neither transparent nor in public interest

High Court declared that tender process whereby bid of respondent was accepted in respect of goods in question was in violation of law and same was declared void

Constitutional petition was allowed accordingly.

Petitioners, invoking Constitutional jurisdiction of High Court with personal or financial interest in a public procurement process, who claim to be public interest litigants, could not be permitted to challenge with impunity bidding processes initiated by public agencies

Delay in approaching High Court under Art. 199 of the Constitution to initiate public interest litigation could be held to be a valid defence on which such litigation may be defeated.

International treaty or agreement to prevail to extent of conflict between such treaty/commitment and Public Procurement Rules, 2004

Standard Bidding Documents, deviation from

Projects financed under loan from International Financial Institutions

Scope

Question before High Court was whether a bidding process initiated by respondent Electricity Supply Company was liable to be annulled due to non-adoption of standard form of bidding documents issued by Pakistan Engineering Council and absence of requirement that foreign bidders were to only bid as joint-ventures with local firms registered with Pakistan Engineering Council

Contention of petitioner, inter alia, was that such requirements were mandatory under the Public Procurement Rules, 2004 and Pakistan Engineering Council Construction and Operation of Engineering Works Byelaws, 1987

Validity

Project for which procurement was sought was being financed by funds provided by Asian Development Bank under a loan agreement with Federal Government and R. 5 of Public Procurement Rules, 2004 gave primacy to obligation or commitment of Federal Government arising out of an international agreement with an international financial institution over the Public Procurement Rules, 2004

Provisions of Asian Development Bank Procurement Guidelines therefore had primacy over provisions of R.23(4) of Public Procurement Rules, 2004 as well as over requirements of Pakistan Engineering Council byelaws, which even otherwise did not apply to the tender/procurement in question

Constitutional petition, being without merit, was dismissed, in circumstances.

Actions of the State were subject to Art.18 of the Constitution and if any action of the State intended to eliminate competition in a trade, the same shall be hit by the said Article, as it did not permit the State to confer any privilege on a private person or any private or public corporation to have monopoly in any trade, business, industry or service

Article 25, while ensuring equality of all citizens, covered the entire field of State action, it would extend not only when a citizen was discriminated against in the matter of exercise of his rights, but also in matter of granting privileges vis-à-vis giving jobs by the State, granting permits or licences, inviting tenders for Government contracts or issuing quotas

Fundamental Rights to due process under Art. 4 of the Constitution, freedom to carry out a lawful trade or business under Art.18 by maintaining fair competition and right against discrimination under Art.25 of the Constitution collectively provided requisite Constitutional underpinning to maintain level playing field, in all public sectors, at all times.

Question before the High Court was whether Rr. 61(2) & 61(3) of the Punjab Procurement Rules, 2014 were ultra vires the Constitution on ground that the same discriminated against private sector manufacturing units in favour of public sector manufacturing units

Held, that classification provided in the impugned Rules between public manufacturer and private manufacturer would not pass the Constitutional classification test

Purpose and policy of the Punjab Procurement Regulatory Authority Act, 2009 when examined ,would reveal that its primary purpose was to regulate procurement process of goods, services and works after a competitive bidding process, however the impugned Rules went against the said intent of Punjab Procurement Regulatory Authority Act, 2009 as well as Arts. 4, 18 & 25 of the Constitutional, as undue advantage was given to public sector manufacturer under the same

Rules 61(2) & 61(3) of the Punjab Procurement Rules, 2014 were declared to be ultra vires of the Constitution and were struck down

Constitutional petition was allowed, accordingly.

Constitutional petition challenging award of contract to a company for arranging the International Defense Exhibition And Seminar ("IDEAS 2020")

Maintainability

Present petition raised a very serious issue as wrongdoing had been attributed in respect of the award of an international exhibition hosted by the country, and notwithstanding the ultimate decision arrived at, the present petition could not be deemed to be frivolous

Court was duty bound to determine whether there was any infirmity in award of the contract

Award of a contract by a public functionary that lacked transparency could be scrutinized in a Constitutional petition

Award of public sector contract without a transparent competitive bidding process was also considered to be within the domain of judicial review

Present Constitutional petition was maintainable and warranted determination upon the merits thereof.

In matters where Government bodies exercised their contractual powers, the principles of judicial review could not be denied

In such matters the exercise of such powers was intended to prevent arbitrariness or favoritism, with a view to ensure that the public interest was the paramount consideration

Basic test in such regard was to see whether there was any infirmity in the decision making process and interference in such a process was warranted where it appeared to be predicated upon arbitrariness, illegality, irrationality, procedural impropriety and/or actuated by mala fides

Right to choose, in the context of awarding contracts, could not be considered to be an arbitrary power but, if the said power was exercised for any collateral purpose then such an exercise merited being struck down.

Process of public procurement once started under the Public Procurement Rules, 2004, could not be stopped or wound up under any circumstances to extend an undue favour.

Defence Export Promotion Organization (DEPO) awarding contract to an event managing company for arranging the International Defense Exhibition And Seminar ("IDEAS 2020")

Question as to whether said contract was exempted from the operation of the Public Procurement Regulatory Authority Ordinance, 2002 ('the Ordinance') and the Public Procurement Rules, 2004 ('the Rules') by virtue of the national security exception contained in R.14(a)

Held, that IDEAS events were exhibitions, of defense apparatus, open to the general public

Purveyors of martial-ware, international and domestic, displayed their merchandise at designated retail spaces frequented by all manner of people, and the said exhibits were also featured prominently in the print and electronic media

Contract, in question, did not pertain to the martial merchandise on display but instead to the particulars of the event, the retail space at which the merchandise were to be exhibited, and the rights and obligations in respect thereof, which facts were also clearly mentioned in the advertisements for expressions of interest relating to IDEAS placed in newspapers

Furthermore a bare perusal of R.14(a) of the Rules demonstrated that it contained no blanket exemption from the operation of the Ordinance and/or the Rules

Rule 14 commenced with a declaration that it was mandatory to advertise all procurement requirements exceeding a specific amount, where after an exception had been created under R.14(a) permitting a deviation

While the deviation did not permit immunity from the Ordinance and/or the Rules, it merely operated to displace the requirement of an advertisement, subject to prior approval of the authority

In the present case, no approval of the authority was obtained to seek the benefit of R.14(a)

Contract under consideration was not exempted from the operation of the Ordinance and the Rules by virtue of the national security exception contained in R.14(a)

Process and award of said contract amounted to mis-procurement

Contract in question was set-aside with the direction that the Federal Government and 'DEPO' may initiate a de novo tendering process for "IDEAS 2020" event and/or any such future events in due conformity with the Ordinance and the Rules

Constitutional petition was disposed of.

Alternate methods for procurement provided under R. 42 of the Public Procurement Rules, 2004, could not be employed to thwart the transparent exercise of powers of public functionaries in awarding contracts of valuable rights.

Definition of "public procurement" included "acquisition of services financed wholly or partly out of the public fund", thus, any interplay of a Government subsidy in a contract would strengthen the argument that public funds were employed in award of such contract, and therefore, it was a public procurement.

Defence Export Promotion Organization (DEPO) awarding contract to an event managing company for arranging the International Defense Exhibition and Seminar ("IDEAS 2020")

Question as to whether the Public Procurement Regulatory Authority Ordinance, 2002 ('the Ordinance') and the Public Procurement Rules, 2004 ('the Rules') were applicable to the said contract

Held, that admittedly Defence Export Promotion Organization (DEPO) was a constituent of the Ministry of Defence, Government of Pakistan

'DEPO' was an entity established by the Federal Government to inter alia coordinate the export of high quality defense products and services

'DEPO' was a procuring agency within meaning of the Ordinance

Since the contract was in fact a contract for services it must be considered whether public funds were involved to place the contracts within the definition of public procurement

Accumulation of all the receipts in respect of IDEAS into a dedicated account qualified the same within the definition of Art.78 of the Constitution

Receipts in respect of IDEAS squarely fell within the phrase "received on behalf of the Federal Government", as used in Art.78(2)(a) of the Constitution

IDEAS events for period under consideration were also the beneficiary of Federal Government subsidies

Ministry of Finance gave subsidy to IDEAS in order to promote the local defense industry and while foreign exhibitors paid the full retail price for space at IDEAS, the domestic exhibitors paid only half the said amount

Remaining half was paid by the Ministry of Finance as a subsidy

Since the definition of public procurement included acquisition of services financed wholly or partly out of the public fund, thus, any interplay of a subsidy would further strengthen the contention that public funds were employed in IDEAS

Rule 3 of the Public Procurement Rules, 2004 ('the Rules') provided that said Rules applied to all procurements made by all procuring agencies of the Federal Government

Provisions of the Ordinance and the Rules were, therefore, applicable to the process and award of the contract under consideration

Process culminating in the award of the contract under consideration, by 'DEPO' to the event managing company, without recourse to a competitive bidding process as envisaged under the law, was prima facie repugnant to the provisions of the Rules

Contract in question was set-aside with the direction that the Federal Government and 'DEPO' may initiate a de novo tendering process for "IDEAS 2020" event and/or any such future events in due conformity with the Ordinance and the Rules

Constitutional petition was disposed of.

For the purposes of printing and publishing textbooks for government schools, the Board and the authorities invited tenders, whereas for the purposes of private schools the publishing and printing work was allocated among the publishers and printers on the basis of their strength and capacity

Petitioners, who were publishers engaged in the business of publishing and printing textbooks and were duly registered with the Board, contended that for purposes of private schools also the Board and the authorities were obligated to follow the Punjab Procurement Regulatory Authority Act, 2009 ("Act") and the Punjab Procurement Rules, 2014 ("Rules"); held, that the petitioners' relationship with the Board was contractual in nature as the quantum and price (for printing and publishing textbooks for private schools) was negotiated before settling the terms for providing textbooks

For the purposes of government schools, the 'Act' and the 'Rules' were followed as public provision was involved, however in case of private schools, the 'Act' and 'Rules' were not followed because there was no public procurement involved as the services were not financed wholly or partly out of the public fund

In terms of section 2(n) of the 'Act', public procurement meant acquisition of goods, services or rendering of works financed wholly or partly out of the Public Fund, unless excluded by the Government

In the present case, clearly there was a contractual relationship in which the petitioners negotiated the terms and conditions at which they would print and publish the textbooks for the private schools

Since there was no element of public procurement involved, there was no obligation on the part of the Board and the authorities to call for public procurement for the purposes of private schools textbooks

Constitutional petition was dismissed in circumstances.

Petitioner impugned rejection of its bid by the procuring authority on ground, inter alia, that petitioner had been declared the lowest bidder, and therefore a vested right accrued to the petitioner

Validity

Mere acceptance of the lowest bid would not constitute a concluded contract, therefore, principle of natural justice would not be attracted in such a case, in absence of any vested right of the petitioner

Bid of petitioner had not been confirmed finally and contract therefore, could not be said to be completed

Constitutional petition was dismissed, in circumstances.

Petitioner, impugned procurement of police uniforms by the Provincial Government and police Force, inter alia, on the ground that the same was a violation of public procurement laws

Validity

Perusal of the record, in the present case, revealed that the tender for the procurement was done strictly in accordance with the Punjab Procurement Rules, 2014 and no specific violation of law was pointed out by petitioner

Introduction of new police uniforms was a policy issue and did not call for interference by the High Court under Art. 199 of the Constitution

High Court observed that there had been no serious effort made by the petitioner to verify whether contract for such procurement was in accordance with the Punjab Public Procurement Rules, 2014 and that such petitions brought a bad name to public interest litigation and lowered credibility of the same in the eyes of the Court and such practice was therefore strongly deprecated

High Court further observed that the petitioner had not only abused the process of public interest litigation but also burdened the Court and drawn upon its time and resources, besides, eating into the time allocated for other cases

Constitutional petition was dismissed, with imposition of special costs of Rupees Ten Thousand on petitioner, accordingly.

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.

Public Procurement Rules, 2004, are not exhaustive and do not cater for each and every eventuality that can be thought of in the realm of tender bidding

Public Procurement Rules, 2004, are codified norms and requirements of a fair, open, competitive and transparent tender bidding required to be conducted by government or public sector organizations.

Petitioner sought a direction to the respondent Privatization Commission of Pakistan to receive Statement of Qualification (SOQs) from the petitioners in response to the expression of interest for privatization of shares of a Bank

Contention of the respondents, inter alia, was that the petitioners could not be granted an undue advantage by accepting their SOQs beyond the stipulated deadline

Validity

No provision existed in the documents authorizing the (respondent) Privatization Commission of Pakistan to extend deadline for submission of SOQs after lapse of the same

Relaxation of such deadliness by State or its agencies in favour of a particular bidder was not permissible unless expressly provided for in the tender conditions or applicable rules

Executive agency must be rigorously held to the standards by which it professed its actions to be judged

High Court could not rewrite the conditions in the advertisement or the SOQs so as to suit the convenience of the petitioners enabling them to submit the same beyond the stipulated period

High Court observed that the law never tolerates an indolent litigant since delay defeated equity

Petitioners were therefore not entitled to grant of any equitable relief by the High Court under its Constitutional jurisdiction, which was consistent with the trend of judicial restraint in administrative actions

Constitutional petition was dismissed, in circumstances.

Appellant impugned order whereby its constitutional petition against Corporation's disqualification from the pre-qualification process for procurement related to a Power Project, was dismissed

Contention of the appellant, inter alia, was that it had been discriminated against by Authority

Validity

Perusal of the financing agreement for the project, entered into between the Federal Government and the World Bank and further perusal of the World Bank's "Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans and IDA Credits and Grants (2011)" revealed that the said Guidelines gave carte blanche to the World Bank in regard to choice of proposed bidders and stipulated that pre-qualification process undertaken by Authority was subject to prior approval of the World Bank

Impugned disqualification notice issued to the appellant Corporation was merely consequential to the decision of the World Bank

No right came to vest in the appellant by reason of submitting its bid as its status remained of a proposed bidder

Financing agreement and the Guidelines were not subject to any municipal law of Pakistan, and therefore, the same came within the purview of R. 5 of the Public Procurement Rules, 2004, as the financing agreement for the project was entered into by the executive authority of the Federal Government and was not a piece of legislation

High Court, in intra court appeal, observed that the question requiring determination was whether the appellant possessed the right to challenge decision of the World Bank in rejecting its name from list of potential bidders as the controversy arose out of a clause of the Guidelines rather than any law or action by the Authority

High Court further observed that it was rightly held by single Judge of High Court that the World Bank was not a "person" performing functions in connection with the affairs of the Federation, a Province or local authority, therefore no directions could be issued to it in exercise of powers of the High Court under Art.199 of the Constitution

Intra court appeal was therefore dismissed, in circumstances.

Contention of petitioner was that the Federal Government owned 60% shares of the respondent company and therefore the same was amenable to the Constitutional jurisdiction of High Court

Validity

Respondent company was no doubt a joint venture between Federal Government and another party, but being a limited liability company its administration was being run by its Board of Directors which by terms of its MOU and Articles of Association, had to make all decisions through consensus regardless of pattern of shareholding and numerical strength of government directors on its Board

Per said arrangement, nominee directors of the Government could not and did not, exercise administrative and financial control over the company and the company was therefore an entity that was free from executive control of Federal Government and all of its affairs were to be run by its Board representing two set of shareholders through consensus and furthermore, all decisions in the General Meeting of the company were also to be taken by both sets of shareholders by consensus

No document existed on record demonstrating that the Federal Government funded operations of the respondent and for it to be held to be an instrumentality of the State; petitioner ought to have demonstrated with cogent documentary material that the Government was providing substantial financial assistance to it and that the government had deep and persuasive control over its management and policies and also substantiated that functions carried out by the company were public functions closely related to State functions

Primary burden was upon the petitioner to establish that company was a "person" within meaning of Art.199 of the Constitution, which it failed to establish

High Court observed that subscription of capital by the Government had never been considered to establish control of the Government over affairs of a company/corporation

Constitutional petition was dismissed, in circumstances.

Question before the High Court was whether the respondent Company, which was a public limited company with shareholding of the Federal Government at 60%, fell within the definition of "procuring agency" under Public Procurement Regulatory Authority Ordinance, 2002

Contention of the petitioner was that respondent Company could not have awarded a contract for procurement without inviting tenders in terms of the Public Procurement Regulatory Authority Ordinance, 2002

Contention of respondent Company was, inter alia, that it did not fall within definition of "procuring agency" in terms of S.2(j) of the Public Procurement Regulatory Authority Ordinance, 2002

Validity

Section 2(j) of the Public Procurement Regulatory Authority Ordinance, 2002 defined "procuring agency" to mean, amongst others, any corporation, body or organization established by or under a Federal Law or which was owned or controlled by the Federal Government and similarly "public fund" included the funds of enterprises which were owned and controlled by the Federal Government

Catchword in both definitions was "owned and controlled by Federal Government" and the said expressions "owned" and "controlled" had been used disjunctively and both needed to be present in a corporation (company) before it could be said to fall within definition of procuring agency"

In a limited liability company there was some divorce of ownership from control and was particularly so in public imitated companies where the ownership (theoretically) rested with a large and diverse body of shareholders but the control (management) rested with directors

In the present case, two groups of shareholders through Memorandum of Understanding brought about a change in the corporate governance structure of the respondent company by deciding to take all decisions through consensus and such consensual arrangement over decision making in the respondent company made it impossible for the respondent to be termed as an enterprise owned and controlled by the government, therefore the same did not fall within the definition of "procuring agency" and its funds could not be termed as "public funds"

High Court observed that the Public Procurement Regulatory Authority Ordinance, 2002 which regulated "public procurement", that was acquisition of goods. services etc; financed wholly or partly out of Public Funds, was not applicable to contracts entered into by the respondent company

Constitutional petition was dismissed, in circumstances.

Question raised in the present constitutional petition was with regard to the dispute which would require factual enquiry

Procuring agency had authority to disqualify a supplier or a contractor if it had found at any time that the information submitted concerning his qualification as a supplier or a contractor was false and materially inaccurate and incomplete

Factual controversy could only be determined on the basis of evidence of the parties

High Court while exercising constitutional jurisdiction could not look and enter into such factual dispute

Petitioner was provided opportunity by the respondent before passing of the impugned order of black listing

Petitioner could not produce any proper authorization letter with regard to the tender in question

Public Procurement Rules, 2004 had provided a complete mechanism/remedy to an aggrieved person for redressal of grievance

Remedy provided in law could not be allowed to be abandoned or by-passed on mere whims and desire of an aggrieved party

Constitutional jurisdiction of High Court was not to be invoked in petty matters to burden Courts with disputed facts or examination of evidence for resolution of such controversy

Petitioner might seek appropriate alternate remedy as provided under the law and if limitation period for seeking such remedy had expired during pendency of these proceedings and recording of reasons then appropriate forum/authority might sympathetically consider the request for condoning such period

Constitutional petition was dismissed in circumstances.

Appellants impugned order of High Court whereby their constitutional petitions challenging the legality of the transaction vide which a 20-year lease of a Power Generation Company was granted by WAPDA to the respondent; were dismissed

Contention of the appellants was, inter alia, that no specific advertisement was issued inviting bids for the lease of the said Power Plant, and in absence of such an advertisement, the entire process was liable to be set aside

Appellants further contended that respondent had easy and exclusive access to persons involved in the decision-making process; and that respondent's offer to obtain lease of the Power Plant was unsolicited; and it had obtained the lease through unfair means

Validity

Examination of the transaction in question revealed that the original process initiated through an advertisement was for appointment of an "Operator" of the plant; and such process was subsequently formally terminated, and thereafter the disputed contract for lease was initiated as a result of an independent process undertaken by WAPDA, unrelated to the procedure for the appointment of the "Operator"

No fresh public advertisement was issued and issuing of such an advertisement was universally accepted as a condition precedent for ensuring a free, fair, open, competitive, and transparent process for the transfer of public assets or rights therein

No compelling reasons had been pleaded by WAPDA for not issuing such an advertisement, and absence of the same, alone, was fatal for the transaction in question

Respondent was unilaterally given prior access to the Power Plant evidencing the availability of an unfair advantage and was also given access to the decision-making authorities at the highest level not only in WAPDA but also in the Presidency

Decision, in principle, to award the contract for lease to the respondent was taken at the highest level by the President, Prime Minister and Chairman WAPDA, and thereafter without issuing of any advertisement for the information of the public-at-large, only some such firms which had originally showed their Expression-of-Interest for being appointment as a "operator" of the Plant, were contacted

Such procedure was not only illegal but in fact was a farcical and mala fide attempt to clothe the transaction with some semblance of legality and the process appeared to be a infertile attempt to paper over illegalities

Such omissions and commissions made it clear that by no stretch of the imagination the impugned transaction was legal, transparent, fair, open or the result of a competitive and fair process

Power Plant was a public asset and those entrusted therewith were sadly found wanting, in the present case

Impugned transaction had not only been disowned by the Federal Government of which WAPDA was an instrumentality but also a categorical stand was taken by the Federal Government to the effect that the transaction was beset with irregularities and serious lapses

Supreme Court set aside impugned order of High Court and the transaction for grant of lease to the respondent was declared as not sustainable and direction was issued to Federal Government to fix civil and criminal liabilities in such regard

Appeals were allowed by Supreme Court, accordingly.

Contention of the petitioner was that respondent Ministry of Health had in the past procured vaccine through open tenders, however, in the present financial year, no bids were advertised, and contract for procurement was awarded to UNICEF, contrary to Public Procurement Rules, 2004

Contention of the respondent Ministry of Health was inter alia, that Pakistan was working with GAVI Alliance, and upon default of its co ;financing obligations to GAVI Alliance, Government of Pakistan was compelled to procure vaccine from UNICEF-Held, that no justification for not following Public Procurement Rules, 2004 was available to the department and R. 5 of the Public Procurement Rules, 2004 was not applicable for the purposes of co financing obligation with GAVI Alliance

Commitment with GAVI Alliance was not an international treaty nor was an agreement with the State or an agreement with an international financial institution, therefore it could not prevail over the Public Procurement Rules, 2004

Government could not bypass the procurement process as provided under the PPRA Rules and any commitment with GAVI Alliance fell outside the scope of R. 5 of the Public Procurement Rules, 2004-High Court directed that procurement of vaccines be carried out through open tenders in accordance with Public Procurement Rules, 2004 and observed that the commitment of Government with UNICEF for procurement of vaccine was illegal being contrary to Public Procurement Rules, 2004

Constitutional petition was allowed, in circumstances.

Petitioner in pursuance of a notice of pre-qualification, submitted its applications for pre-qualification, and subsequently petitioner's name was not mentioned in the list of firms which were pre-qualified for the bidding process

Grievance of the petitioner was that respondent authorities had, with mala fide, not pre-qualified the petitioner and had not given any reasons for its non-pre-qualification

Held, that under R. 17(3) of the Punjab Procurement Rules, 2014 the procuring agency shall promptly inform the contractor who had applied for pre-qualification, whether or not he had pre-qualified, and under R.17(4), shall on request from the contractor, communicate to him the reasons for not pre-qualifying the contractor

Petitioner in the present case, had been intimated promptly regarding its non-pre-qualification and it was not the case of the petitioner that it had applied for reasons for the same and no application or request was made by the petitioner to the procuring agency for supply of reasons

Question as to whether a particular contractor was pre-qualified or not was either a policy issue or commercial transaction requiring specialized fields and courts lacked expertise to express any opinion as to technical expertise or managerial capabilities of the contractor

Courts ordinarily refrain from entering into the policy making domain of executive authority unless the same smacked of arbitrariness, favoritism and a total disregard for mandate of law

Question as to whether petitioners were qualified or not being a factual controversy, could not be resolved by the High Court in its constitutional jurisdiction

Constitutional petition was dismissed, in circumstances.

Under Rule 9 of the Punjab Procurement Rules, 2009 the splitting of works contract ought not to be done after the stage of shortlisting the contractors; otherwise such splitting could be used to exclude competition by eligible contractors of a lower category by awarding the contract to a favored higher category public contractor

Higher category contractor had higher overheads and was therefore likely to demand a higher price and such caution should be exercised to ensure transparent utilization of public money on public contracts in accordance with the law

Regulatory mechanism established in the Punjab Procurement Rules, 2009 was meant to advance the object of the Rules, and the Standard Operating Procedures and primarily ensure utilization of public funds in a transparent, fair and reasonable manner that promoted public interest

Punjab Procurement Rules, 2009 must be complied strictly by authorities responsible for utilizing public funds, otherwise their actions were invalid and ineffective.

Government organization/entity which was competing with companies of private and public sectors could not be put in an advantageous position for assigning of work or award of contract, merely on the ground that it was a government organization or entity

Any government organization which opted to take part in the competitive process could not be treated differently from its competitors

Once process of public procurement had started under the Public Procurement Rules, 2004, then under no circumstances, it could be stopped and wound up to extend undue favour to any government organization.

Port Trust (KPT) invited bids for procurement of two Pilot Boats and petitioner claimed to be the lowest bidder having vested right to its bid to be accepted but KPT did not award contract

Validity

At the end of bidding, there were only two bids left; one by petitioner and other by another bidder

Petitioner's bid was for Glass Reinforced Plastic (GRP) hull and that of the other bidder was for steel hull, therefore, prima facie the two were apples and oranges and could not be compared with each other

In tender documents, type of material for hull, GRP or Steel was not specified, therefore, it could be either

Even if the two bids remaining in field were treated as comparable and therefore, should have been compared with each other, in presence of only two bids, there could be a "lower" bid and a "higher" bid but there could not be " the lowest bid", which adjective being in superlative degree and not in comparative degree required at least three to be compared with each other

High Court declined to interfere in the order passed by authorities

Petition was dismissed in circumstances.