Summary: Public procurement / tender process--- ----Notice Inviting Tenders (NIT)---Undisclosed engineer’s estimate---Additional security---Rejection of bid---Forfeiture of earnest money---Debarment---Transparency and fairness in public procurement--- Petitioners invited tenders for improvement and widening of road project---Respondent bidder was successful for Package-I and had deposited earnest money at 2% of estimated cost disclosed in advertisement---Petitioners subsequently demanded 8% additional security on basis of engineer’s estimate, asserting that bid was 22.5% below such estimate---Said engineer’s estimate, however, had not been disclosed in NIT---On bidder’s refusal to deposit additional security, bid was rejected, earnest money forfeited, and bidder debarred for six months---High Court set aside such action---Validity---Federal Constitutional Court held that where petitioners had themselves computed earnest money on basis of estimated cost expressly mentioned in advertisement, they could not later shift to an undisclosed benchmark for imposing additional burden upon bidder---Such course offended requirements of transparency, consistency, fairness and equal treatment in public procurement---Any change in essential tender terms or introduction of a fresh financial benchmark after commencement of bidding process, without prior disclosure or fresh advertisement, was arbitrary and legally untenable---Judgment of High Court was found consistent with governing law and principles of public procurement---Leave to appeal was refused and petition was dismissed. Habibullah Energy Limited and another v. WAPDA through Chairman (PLD 2014 SC 47); Ishaq Khan Khakwani and another v. Railway Board through Chairman and others (PLD 2019 SC 602); Monarch Infrastructure (P) Ltd. v. Commissioner, Ulhasnagar Municipal Corporation and others (AIR 2000 SC 2272) rel. (a) Notice Inviting Tenders---Disclosure of material terms---Necessity--- In public procurement, all material and essential terms governing participation in the bidding process must be disclosed in the advertisement / Notice Inviting Tenders so as to ensure a free, fair, open, competitive and transparent process. An undisclosed criterion cannot subsequently be invoked to the prejudice of a bidder. (b) Additional security---Basis not disclosed in NIT---Effect--- Where the petitioners demanded additional security on the basis of an engineer’s estimate not mentioned in the advertisement, such demand was without lawful basis---A bidder could not be burdened with additional security calculated on a benchmark withheld from all participants at the time of tender. (c) Transparency, consistency and equal treatment---Public contracts--- The procuring agency, having calculated the 2% earnest money on the basis of the estimated cost expressly disclosed in the advertisement, could not lawfully switch to another undisclosed valuation standard later on---Such inconsistency violated the principles of transparency, fairness and equal treatment among bidders. (d) Change in essential tender terms after commencement of process---Propriety--- A change in an essential term or financial basis of tender after initiation of bidding process cannot be sustained unless the same is publicly notified through a fresh advertisement enabling all potential bidders to compete on equal footing---Midstream alteration of tender conditions is akin to changing the rules of the game after it has begun and is inherently arbitrary. (e) Rejection of bid, forfeiture of earnest money and debarment---Legality--- Where demand for additional security itself was founded on an undisclosed and impermissible basis, consequential actions of rejection of bid, forfeiture of earnest money and debarment of bidder could not be legally sustained. (f) Leave to appeal---Refusal of--- As the High Court had correctly applied the law and the settled principles of public procurement, no legal infirmity was found in the impugned judgment and no ground for interference was made out. Leave refused; petition dismissed.

Summary: (a) Public Procurement Rules, 2004: ----Bidding Process---Right of Bidder---Technical Disqualification---Fresh Tender Process---Vested Right in Procurement Process. The plaintiff, a bidder in a two-envelope tender process initiated by the Civil Aviation Authority (CAA) for car parking fee collection at Islamabad International Airport, challenged his disqualification on technical grounds and subsequent initiation of a fresh tender process. The plaintiff alleged mala fide intent, procedural irregularities, and suppression of his higher bid by the procurement authority. ----Key Principles Established: A bid is merely an offer and does not create any vested rights in favor of a bidder, even if it is the highest or lowest bid. A contractual right only arises once a bid is accepted and a formal contract is concluded. Allegations of mala fide intent must be substantiated with clear evidence, and procedural irregularities must demonstrate substantial prejudice to the bidder. In case of grievances in public procurement processes, the aggrieved party has an alternate remedy under Rule 48 of the Public Procurement Rules, 2004, which must be pursued before approaching the courts. If a bidder is disqualified for non-compliance with mandatory technical criteria, the procuring agency has the right to proceed with a fresh tender process. ----Cited Cases: Guinault SA PA Orleans Sologne v. Federation of Pakistan and others (2021 YLR 692) Muhammad Khalil v. Faisal M.B. Corporation and others (2019 SCMR 321) Babu Parvez Qureshi v. Settlement Commissioner Multan and Bahawalpur Divisions and others (1997 SCMR 337) Mandokhail Brothers Commercial Trading and Government Contractor v. Chairman Civil Aviation and others (2017 CLC 221) ----Disposition: Interlocutory applications (C.M.A. No. 21126/23 and 561/24) seeking to restrain further auction proceedings and challenge the disqualification were dismissed. The Court held that the plaintiff had no vested right to the award of the contract, and the procurement process conducted by the CAA was in line with applicable rules and regulations.

Summary: ''Quality Assurance security and performance guarantee are mutually exclusive obligations'' ---- BackgroundM/s Bilawal Gull Builders and other petitioners, identified as bidders, invoked the constitutional jurisdiction of the Lahore High Court, Multan Bench, challenging the actions and directions of procuring agencies in the tendering process for civil works in various districts of Southern Punjab. The primary issue was the demand by procuring agencies for the petitioners to furnish "Quality Assurance Security" (QAS) or "Quality Control Guarantee" (QCG). Some petitioners also contested the directive that security from insurance companies was unacceptable, asserting that only bank-issued securities were deemed valid, which they argued contravened the Punjab Procurement Regulatory Authority Act, 2009, and the Punjab Procurement Rules, 2014.----Issues:Legality of Demanding QAS/QCG: Whether the demand for QAS or QCG by procuring agencies, in addition to the performance guarantee required under the Punjab Procurement Rules, 2014, is lawful.Restriction on Type of Security: The validity of the procuring agency's restriction on accepting only bank-issued securities and rejecting those from insurance companies.----Holding/Reasoning:The Lahore High Court held that the demand for QAS or QCG does not conflict with the Punjab Procurement Rules, 2014, particularly Rule 56, which mandates a performance guarantee. The court clarified that QAS or QCG serves as an additional security for bids quoting prices lower than the estimated cost, aiming to cover the differential and ensure serious bidding. This additional security is considered distinct from the performance guarantee required upon contract award.Regarding the type of security accepted, the court endorsed a policy decision to exclude securities from insurance companies, deeming it within the purview of the procuring agency's discretion. The exclusion was found not to violate the provincial procurement regime, as the Punjab Procurement Regulatory Authority has the authority to set standard bidding documents specifying acceptable forms of security.---Citations/Precedents:A.M. Construction Company (Private) Limited v. Province of Punjab (2023 CLC 616): This case addressed similar issues regarding additional performance security and was referenced for its principles but distinguished based on factual differences.------M/s Jalal Construction Company v. The Secretary C&W Department, Government of Punjab (2024 LHC 329): This judgment, addressing the acceptability of insurance bonds as securities, supported the policy decision to limit acceptable securities to those issued by banks.

Summary: Issue: The main issue in this case is whether the petitioner is entitled to the release of its bid security after its bid was rejected and the bid security forfeited by the respondent.----Facts: The petitioner, in a joint venture, participated in a tender issued by the National Transmission & Dispatch Co. Ltd. (NTDC) for the design, manufacture, supply, installation, testing, and commissioning of a plant for a grid station. After the technical evaluation, the financial bids of two technically qualified bidders, including the petitioner, were opened. The petitioner submitted the lowest bid. During the process, the NTDC raised queries regarding the bid, which the petitioner duly responded to, accepting corrections as desired by NTDC. However, the NTDC later rejected the petitioner's bid and forfeited its bid security, citing the petitioner's refusal to accept arithmetical corrections. The petitioner challenged this decision through a constitutional petition.----Holding: The court held that the petitioner's refusal to accept arithmetical corrections, as stated by NTDC, was erroneous. The petitioner had, in fact, accepted and responded to the corrections sought by NTDC. Additionally, the court found that the bidding documents did not provide for forfeiture of bid security in the circumstances described by NTDC. Therefore, the decision to reject the bid and forfeit the bid security was unlawful. The court overruled the objections raised by the respondents regarding the maintainability of the petition and directed the respondents to release the petitioner's bid security.----Legal Principle Applied: The court applied the principle of Contra Proferentem, which states that ambiguities in contracts or documents are construed against the drafter. Since the bidding documents did not explicitly allow for the forfeiture of bid security in the circumstances described by NTDC, the court interpreted the documents unfavorably against the respondent.----Decision: The court ruled in favor of the petitioner, declaring the rejection of its bid and the forfeiture of its bid security unlawful. The respondents were directed to release the petitioner's bid security.---Quote: ''The act of confiscation of bid security while rejecting the bid and scraping procurement process was unlawful since the Petitioner did not refuse to accept arithmetic errors as desired by the procuring agency and the latter had itself opted for fresh procurement process.''

Summary: Background: The Lahore High Court dealt with two writ petitions (W.P. No. 28679/2023 and W.P. No. 33077/2023) involving M/s Computer Tips, M/s Kingly Solutions (Pvt) Limited, and other respondents including the Province of Punjab and various government officers. The petitions concerned the procurement of PC tablets and Early Childhood Education (ECE) kits by the Program Monitoring & Implementation Unit (PMIU), Punjab Education Sector Reform Program, following the Punjab Procurement Regulatory Authority Act, 2009, and related rules. The main issue revolved around the non-payment and forced rebate deductions in the execution of the contracts. ----Issues: 1- Whether the petitioners were entitled to full contract payments without deductions for rebates that they claimed were coerced. 2- Whether the procurement processes were conducted fairly and in compliance with statutory requirements. ----Holding/Reasoning/Outcome: The court ruled in favor of the petitioners, directing the respondents to release the complete contract prices within 30 days. It held that:The procurement processes were initially compliant with the legal requirements; however, the coercion for rebates upon full performance of the contracts by the petitioners constituted an unfair and non-transparent practice.The forced rebates were deemed arbitrary and against the principles of fair procurement. The non-payment of full contract prices was seen as an undue pressure tactic against the petitioners.The petitions were upheld due to the clear statutory and contractual breaches by the respondents in failing to make timely payments, compelling the petitioners to accept reduced payments under duress. ----Citations/Precedents: Punjab Procurement Regulatory Authority Act, 2009: Sets the legislative framework for public procurement in Punjab.Punjab Procurement Rules, 2014: Provides detailed procedures and requirements for public procurement.Messrs Ramna Pipe and General Mills (Pvt.) Limited v. Messrs Sui Northern Gas Pipe Lines (Pvt.) and others (2004 SCMR 1274): Reinforces the principle that contracts involving public interest must be transparent, fair, and free from malpractice, subject to judicial review.

Summary: The petitioner, a company, challenged the decision of a Grievance Redressal Committee and raised various grounds, including issues related to technical evaluation, the status of being the lowest bidder, and the authority of the Committee to recommend re-tendering. The court referred to previous judgments emphasizing that the mere intent to award a contract does not create a vested right, and the lowest bidder's right is not absolute until the contract is accepted and signed. The court noted that the Committee's recommendation for re-tendering is not a final order, and no cause of action has arisen for the petitioner to challenge it. Consequently, the writ petition was dismissed for lack of merit.

Summary: Two consolidated petitions challenging the tendering process and subsequent award of a contract by the Federal Board of Revenue (FBR) for the monitoring of bonded cargo transportation in Pakistan to NLC Construction Solution Private Limited (NCSPL). The petitions, filed by Assetlink Asia (Private) Limited and E-Movers (Private) Limited, alleged misprocurement in the award process, citing violations of public procurement laws.The court examined the tendering process, the criteria for bid evaluation, and the subsequent alterations made to these criteria, which favored NCSPL, a company not initially shortlisted and with questionable eligibility due to its late entry into the tender process and lack of requisite licensing at the time of bid submission. The court found the modifications to the evaluation criteria, made post bid opening and upon NCSPL's request, to be non-transparent and unjustified, resulting in NCSPL, the least qualified bidder, being awarded the contract.The judgment referenced several precedents, including "Muhammad Ayub & Brothers vs. Capital Development Authority Islamabad" and "Toyota Garden Motors (Private) Limited vs. Government of Punjab & Others," to underscore the principles of transparency, fairness, and legality in the public procurement process. It emphasized that any changes to the tender terms post bid opening, especially to the advantage of an otherwise unsuccessful bidder, are impermissible.The court concluded that the tendering process culminating in the award to NCSPL was in violation of public procurement laws, resulting in misprocurement. Consequently, the contract awarded to NCSPL was set aside, and the FBR was directed to initiate a new, law-compliant tendering process. The petition filed by Assetlink Asia was dismissed, while the petition by E-Movers, framed as public interest litigation, was allowed, leading to the annulment of the contract awarded to NCSPL.

Summary: In view of the reasoning and rationale contained herein, we areconstrained to observe that the belated unjustified parachuting ofNCSPL into the tender process; the manner adopted for modification ofthe evaluation criteria post opening of bids; and the implementation ofsuch modification cannot be considered to be transparent and / or in thepublic interest. The tender process culminating into the Contract ishereby determined to be in manifest violation of the law, hence, theContract is hereby set aside. The respondent No. 2 may initiate a denovo tendering process in accordance with the law for the award of theContract, preferably within a period of one month, in which all eligibleparties may participate. Therefore, we do hereby dismissed, along withpending applications, with no order as to costs.

Summary: The case originated from a tender issued by the government for the supply of jute bags for wheat storage during the 2005-06 season. The appellant had submitted a tender at a certain price per bag. The government pointed out a deficiency in the tender related to a "Price Reasonability Certificate," which the appellant subsequently provided. The appellant's tender was accepted, and a formal agreement was executed. However, it was later discovered that the appellant had sold the same bags to another entity at a lower price. As a result, the government reduced the payment to the appellant.The appellant challenged this reduction through a constitutional petition, arguing that the reduction was illegal and unjustified since the Price Reasonability Certificate had not been in effect at the time of the sale to the other entity.The appellant contended that the judgment was unsustainable because the government had admitted the disputed nature of Note-1, which the judgment had excluded from consideration. The appellant further argued that the Certificate provided by them did not have a retrospective effect, and the judgment did not appropriately consider this aspect of the case.The Court heard arguments from both sides and examined the record. It found that the Certificate provided by the appellant was a mandatory condition for the tender and had not been in effect until it was provided. Therefore, the appellant could not claim that its effect should retroactively apply. Additionally, the Court referred to a previous Supreme Court decision on a similar matter, which upheld the government's action in reducing the payment to the supplier. Based on these considerations, the Court concluded that there was no merit in the appeal and dismissed it.

Summary: 1- Cancellation of Tender Enquiry: (Rule 33, Public Procurement Rules, 2004) The procuring agency is empowered to reject all bids or proposals at any time prior to the acceptance of a bid or proposal under Rule 33 of the Public Procurement Rules, 2004. However, upon request, the agency must provide the reasons for rejection. Cancellation does not automatically grant bidders a legal right to the award of the contract. ------2- Lowest Bid Does Not Confer Absolute Right: Mere participation in a tender or submission of the lowest bid does not create an enforceable right for the bidder to demand the award of the contract. A bid must be formally accepted and communicated for a contract to be enforceable. (Petrosin Corporation (Pvt.) Ltd. vs. OGDCL, 2010 SCMR 306) ------3- Bid Cancellation and Re-Tendering: The rejection of all bids and re-tendering by a procuring agency is lawful if exercised in compliance with relevant rules and without malafide intent. The petitioner retains the right to participate in the re-tendering process. ------4- Non-Confirmation of Bid Acceptance: Even if a bid is evaluated as the lowest, it does not confer a legal entitlement to the bidder unless the procuring agency formally accepts the bid. Absence of confirmation invalidates any claim of legitimate expectancy. (Captain-PQ Chemical Industries (Pvt.) Ltd. vs. A.W. Brothers, 2004 SCMR 1956) ------5- Precedent on Non-Binding Bids: Judicial precedents establish that floating or accepting a bid does not create binding obligations unless explicitly accepted and formalized into a contract. This applies to both auctions and tenders. (Munshi Muhammad vs. Faizanul Haq, 1971 SCMR 533; Fawwad & Fareen Enterprises Ltd. vs. Director of Industries, PLD 1983 Karachi 340) ------6- Dismissal in Limine: Where the record lacks evidence of formal acceptance of the petitioner’s bid, the court will dismiss claims for contract award or compensation, as no legal right arises from unconfirmed bids or tender processes. Disposition: Petition Dismissed: The Court dismissed the writ petition in limine, finding no evidence of bid acceptance or malafide intent in the cancellation of the tender. Right to Re-Tender: The petitioner remains eligible to participate in the re-tendering process, should it be initiated. Order accordingly.