Non-extension of Bid Validity Period and Award of Contract

Non-extension of Bid Validity Period and Award of Contract Case Laws Constitutional Law Food & Beverages Knowledge - Constitutional Law Litigation & Arbitration PPRA Procurement Solutions - Constitutional Law Transport & Logistics Mr. Justice Shahid Karim in his judgment has decided the issue regarding non-extension of bid validity period and award of contract in Writ Petition No. 7098 of 2016.

1. This petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, lays a challenge to the procurement process undertaken by the respondent No.1, Pakistan International Airlines Corporation (PIA) and the consequent award of the contract to the respondent No.3, Pearl Continental Hotel, Lahore (PC Hotel).

2. The relevant facts are simple and are broadly admitted between the parties. As a backdrop it may be mentioned that the petitioner is a Company which offers flight catering services at various airports in Pakistan. It has been providing services since 2006. It has both ISO and Halal Certificates. These are not in dispute. From the contents of the petition, it can be gleaned that the respondent No.1/ PIA issued a tender in January, 2014 for flight catering services for which the petitioner submitted its bid and according to the learned counsel, the petitioner was awarded the contract for providing flight catering services which continued till the contract was terminated on 01.03.2016.

3. The learned counsel for the respondent No.1 does not take issue with the fact that the contract was awarded to the petitioner in the year 2014, however, the period during which the contract remained in operation is disputed between the parties. This fact will not have any bearing on the ultimate decision of this petition. The learned counsel for the petitioner has not dwelt upon the contract which was awarded in 2014 and has narrowed down his attack to the tendering process which was put into motion in March, 2015.

4. The PIA invited bids for the provision of “In-Flight Catering Services” in March, 2015 (the procurement process). The invitation of bids is annexed at pages 34 to 52 of the petition. The tender schedule which formed part of the bid document is attached at page 39 of the petition in which the bidders were required to provide their rates at which they will charge food. The technical bids were opened in March, 2015. The petitioner and PC Hotel qualified on these technical bids and the other bidders were declared as disqualified. None of the disqualified bidders has chosen to challenge the bidding process. The financial bid was opened on 18.6.2015. The evaluation report was submitted on 20.08.2015 which declared the PC Hotel to be the lowest bidder.

5. The learned counsel for the petitioner submits that serious objections were raised to the evaluation report by filing objections by E-mail of August 26, 2015, which is at page 56 of the petition. No reply, according to the learned counsel, was given nor a decision was made by the grievance committee in terms of rule 48 of the Public Procurement Rules, 2004 (PPRA Rules). However, the report/decision of the grievance committee has been belatedly delivered to the petitioner and is back-dated to 02.10.2015. On 01.03.2016, the petitioner was informed that the contract had been awarded to PC Hotel and that the contract of the petitioner had been terminated as also informing the petitioner of the rejection of its grievance raised against the evaluation report.

6. The learned counsel for the petitioner has raised a number of grounds which, according to the learned counsel, go to the heart of the matter and render the entire procurement process as ultra vires and liable to be set aside. These are dealt with in seriatim as follows:

Illegal and Unlawful Termination:

7. This issue has lost its efficacy and need not be dilated upon in view of the fact that the learned counsel for the petitioner has chosen to drop the challenge to the purported unlawful termination of the contract awarded in the year 2014. The primary challenge of the learned counsel is now with regard to the procurement process as stated above.

Tender Process and Award of Illegal Contract Contrary to PPRA Rules:

8. As a prefatory, the general approach of the courts to procurement decisions may be set out in the first instance. The traditional approach of the courts is that contracting decisions fall within the sphere of private law and are therefore reviewable only in the private law courts. Judicial review proceedings can only be brought if it can be shown that the contracting decision in question has an additional public law element which justifies bringing the case within the sphere of public law. It is said that judicial review should be generally available at least in cases where the contract is made under statutory powers due to the importance to the rule of law of ensuring public bodies are held legally accountable in respect of abuses of power. (S. Bailey, “Judicial Review of Contracting Decisions” [2007] P.L. 444, 463). The cases establish that there are only two ways in which a procurement decision could be brought within the realm of public law; either the decision was conducted using statutory power and could therefore be reviewed for compliance with that stature or an alternative undefined public law element needed to be proved.

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