Well Protect Manpower Service PVT. LTD. vs. Delhi Development Authority And Ors.

Held

The Court found force in the petitioner's submissions, particularly those based on the Orion Security Solutions judgment. It noted that Clause 76 of the tender documents, stating that a firm quoting 'NIL' charges consideration shall be treated as non-responsive, was ambiguous as to whether it meant 'zero consideration' or 'zero profit'. The Court observed that quoted charges alone may not determine financial capacity, as bidders might have economies of scale or legitimate profits from other sources. Furthermore, the Court questioned how a bid with a Rs. 9/- profit margin was substantially different from one with Rs. 0/- profit. Critically, the DDA had calculated a 'justified rate' of Rs. 1009.25, which included contractor profit and overheads, yet accepted the bid of respondent No. 3 at Rs. 886.36, well below their own justified rate. This indicated the DDA had not applied its own justified rate consistently, which would have led to the rejection of all bidders. However, since the tender process was long closed, the contract awarded in June 2019 for one year, and the matter had become infructuous, the Court found no reason to interfere at that stage. It expressed hope that the DDA would consider these observations for future tenders.

Facts

The petitioner, Well Protect Manpower Pvt. Ltd., filed a writ petition challenging the Letter of Award dated 19.06.2019 issued by the Delhi Development Authority (DDA) to respondent No. 3. The tender was for providing Security Guards and Watch and Ward services for the Yamuna Sports Complex. The petitioner's bid was found technically successful, but its financial bid was declared non-responsive because it quoted a price based solely on minimum wages without any profit component. The DDA relied on an Office Memorandum (O.M.) dated 28.01.2014 and Clause 76 of the tender documents, which state that bids quoting 'NIL' charges or consideration shall be treated as unresponsive. The petitioner argued that the O.M. was incorrectly applied, as there was a minimal difference between its bid and that of the successful bidder, and that the entire exercise was to benefit respondent No. 3.

Key Issues

1. Whether the petitioner's bid, which quoted a price based solely on minimum wages without a discernible profit component, was correctly treated as non-responsive under Clause 76 of the tender documents and the Office Memorandum dated 28.01.2014? (Question of law) Petitioner's arguments: The petitioner contended that the O.M. was incorrectly applied. It argued that the difference between its bid (Rs. 877.61) and the successful bidder's bid (Rs. 886.36) was negligible (Rs. 9/-), making the distinction between quoting minimal profit and no profit insignificant. The petitioner also relied on a previous judgment in its own case (W.P.(C) No. 1330/2018) and a Coordinate Bench decision in Orion Security Solutions Pvt. Ltd. vs. Govt. of NCT of Delhi & Ors., arguing that the DDA's procedure was not transparent and that financial capacity is not solely determined by quoted charges. Respondents' arguments: The respondents relied on Clause 76 of the tender documents and the O.M. dated 28.01.2014, which mandate that bids quoting 'NIL' charges/consideration are to be treated as unresponsive. They argued that a bid with 'NIL' profit implies potential sub-standard service or cutting corners, as it's unlikely a bidder would offer charity. They also noted that the bid was approved by the Commissioner, DDA.