Licence of track, trace system to NRTC: IHC directs FBR to initiate fresh bidding process under law

The Islamabad High Court (IHC) has set-aside the Federal Board of Revenue (FBR)'s decision to grant licence of track and trace system to the M/s National Radio and Telecommunication Corporation (NRTC) and directed the FBR to initiate a fresh bidding process strictly in accordance with the law.

According to a judgment of the IHC, the court has decided writ petitions 3995/2019 and 4395/2019 since they entail certain common features.

Through writ petition 3995/2019, the petitioner, M/s National Institutional Facilitation Technologies (Pvt) Ltd (NIFT), assails the letter dated 29.10.2019 whereby the FBR granted a licence to M/s NRTC at a price of Rs731/- per 1,000 stamps for a period of five years to establish, maintain, and operate the whole process of the track and trace system for tobacco products in Pakistan subject to terms and conditions as stipulated in the Licencing Rules, 2019, Invitation for Licencing (IFL) and other relevant laws.

Through writ petition 4395/2019, the petitioner, also assails the decision taken by the FBR to grant the said licence to the NRTC.

The petitioner also seeks a direction to the FBR to initiate a fresh bidding process for the award of the said licence.

In the result, both the writ petitions are allowed; the FBR's letter dated 29.10.2019 whereby the licence was granted to the NRTC is set-aside; the decision of the GRC dated 13.11.2019 whereby NIFT's complaint was rejected is also set-aside; it is declared that the process adopted for allowing NRTC's request for the correction of the mistake in its financial bid suffered from material irregularity and unreasonableness; and the FBR is at liberty to initiate a fresh bidding process strictly in accordance with the law, the IHC order stated.

According to the IHC order, the court is of the view that given the manner in which the Dispute Resolution/Grievance Redressal Committee (GRC) accepted NRTC's request to treat its financial bid to be Rs731/- per 1,000 stamps, rejected NIFT's complaint against the grant of the licence to the NRTC, the remedy of going before the GRC could hardly be terms as adequate of efficacious.

The GRC's said decisions are solely based on the Law Division's second opinion dated 28.10.2019 and do not show any independent application of mind by the members of the GRC.

A remedy before such a forum cannot be considered as an effective alternative remedy for the purpose of denying relief to a petitioner under Article 199 of the Constitution.

Perusal of the said judgment of the High Court of Sindh shows that the matter going to-and-fro between the Law Division and the GRC/FBR was not in issue. Background of the issue revealed that the financial bids of the technically qualified bidders were opened on 14.10.2019. The annex-6 of the IFL required the bidders to quote a price for 1,000 stamps with unique identification marks. The NIFT (the petitioner in writ petition 3995/2019) had quoted Rs868.36/- per 1,000 stamps; M/s Authentix (the petitioner in writ petition No.4395/2019) had quoted Rs1,250/- per 1,000 stamps; and NRTC had quoted Rs.0.731 per 1,000 stamps.

As per the bid evaluation report dated 14.10.2019, the NRTC's bid of Rs0.731 per 1,000 stamps was the lowest. Consequently, NRTC was declared as the lowest evaluated bidder.

The financial bids of the technically qualified bidders were opened on 14.10.2019.

The annex-6 of the IFL required the bidders to quote a price for 1,000 stamps with unique identification marks.

The NIFT (the petitioner in writ petition No.3995/2019) had quoted Rs868.36/- per 1,000 stamps; M/s Authentix (the petitioner in writ petition No 4395/2019) had quoted Rs 1,250/- per 1,000 stamps; and NRTC had quoted Rs0.731 per 1,000 stamps.

As per the bid evaluation report dated 14.10.2019, NRTC's bid of Rs0.731 per 1,000 stamps was the lowest. Consequently, NRTC was declared as the lowest evaluated bidder. On 15.10.2019, the bid evaluation report was posted on PPRA's website.

Vide letter dated 17.10.2019, the NRTC informed the FBR that on 14.10.2019, it had clarified that as a result of an oversight, it had quoted Rs0.731, and that the said unit price when multiplied by 1,000 it comes to Rs731 per 1,000 stamps.

Furthermore, NRTC requested the FBR to amend the bid evaluation report, so that it's quoted price is stated to be Rs731 per 1,000 stamps or Rs0.731 per stamp.

Only on the basis of the second opinion dated 28.10.2019 from the Law Division, the GRC, on 28.10.2019, accepted NRTC's representation for the correction of its quoted price from Rs0.731 per 1,000 stamps to Rs731 per 1,000 stamps.

The IHC added that the Rule 31(1) of the Public Procurement Rules, does, however, permit such changes in the bid to be accepted by the procuring agency as do not "change the substance of the bid" and that too where a clarification is sought by the procuring agency.

Rule 31(2) provides for the mode and manner in which (i) the clarification is to be sought by the procuring agency, and (ii) how the response to a request for a clarification is to be given by a bidder.

Rule 31(2) does not recognize or envisage a request for clarification made by a procuring agency and a bidder's response to such a request in a mode other than "in writing."

Therefore, the verbal request made by NRTC on the day the bids were opened to rectify the mistake in its financial bid so as to treat the same as Rs731/- per 1,000 stamps instead of Rs0.731 per 1,000 stamps, cannot be considered as a clarification in terms of Rule 31 of the P.P.R, the IHC added. There is no denying the fact that either before or after the opening of the bids, the FBR did not seek any clarification in writing or otherwise from NRTC with respect to its financial bid.

Prior to the opening of the financial bids or the issuance of the bid evaluation report, the NRTC did not provide any clarification "in writing" with respect to its financial bid.

The bid evaluation committee constituted by the FBR also did not feel the need to seek any clarification from NRTC.

It was not NRTC's case that the bid evaluation committee had committed any oversight or mistake in evaluating its bid.

Its case, in essence, is that the bid evaluation committee should have overlooked or ignored the NRTC's mistake of quoting Rs0.731 per 1,000 stamps, and should have treated its financial bid as Rs731/- per 1,000/- stamps, the IHC added.