Are you looking for a legal research tool ?
Get Started
Do check other products like LIBIL, a legal due diligence tool to get a litigation check report and Case Management tool to monitor and collaborate on cases.

Assam Air Products Pvt. Ltd v. The Union Of India And Ors

Assam Air Products Pvt. Ltd v. The Union Of India And Ors

(High Court Of Andhra Pradesh)

W.P.No.27164 of 2022 | 20-09-2022

R. Raghunandan Rao, J.

1. The petitioner-company, which is engaged in the business of providing Oil field services had participated in the Tender No. K16KC22005 floated by the 3rd respondent for hiring gas compression services at Kesanapalli (W) GGS, for a period of three years. One of the tenderers was the 5th respondent, which was declared technically qualified in the technical bid prior to the opening of the financial bid. The petitioner, being aggrieved by the action of the 3rd respondent in clearing the technical bid of the 5th respondent, has approached this Court by way of the present writ petition.

2. The case of the petitioner is that the 5th respondent does not meet the Bidders' Qualification/experience set out in Clause 2.1(a)-I of the Bid Evaluation Criteria.

3. Clause 2.1(a)-I of the Bid Evaluation Criteria reads as follows:-

"2.(a)-I BIDDER'S QUALIFICATION/EXPERIENCE:-

(ii) If the bidder is not the manufacturer, then the bidder (i.e. Single bidder/Indian Joint Venture company Incorporated) should have experience of installation and operation of natural gas compression package compressing at least 50,000 SCMD for at least cumulative period of 1 year (any overlapping periods in contracts shall be counted as single period only) during last seven (07) years to be reckoned from the date of Techno-commercial Bid Opening with a minimum discharge pressure of 35 Kg/cm2."

4. This Experience requirement, require installation and operation of a compression package. However, Clause 3.3 of the "Scope of Work and Technical Specifications" speaks of a compressor package, which reads as follows:-

"3.3 Configuration of compressor package:

ONGC has provided the Price format, which is to be followed for submitting the Price bid by the bidders.

The Bidder can offer compressor package as per the following configuration:

2 Nos. Operating + 1 No. Standby i.e. Package of minimum 0.50 LSCMD Rated Capacity x 3 Nos.

For the offered configuration, the bidder has to offer only required number of packages. (2 +1 configuration - 3 compressor packages). One compressor package consists of one compressor and one engine.

Any bid offering more options will be considered as conditional and shall be rejected out rightly."

5. The case of the petitioner is that the 5th respondent had installed only one natural gas compression package in the year 2015 and has now sought to offer three separate packages which have a rated capacity of 40000 SCMD each. It is the case of the petitioner that such compression packages would not answer the description of having a compression package comprising at least 50000 SCMD. The petitioner, to press this point, would also contend that the 5th respondent had earlier participated in one such tender for providing gas compression services in Baramura GGS Tripura asset and had been disqualified for not possessing required experience and capacity. It is submitted that the terms of the tender at Baramura and the present tender at Kesanapalli are couched in similar language and the 3rd respondent, having rejected the tender of the petitioner at Baramura, again accepted the technical bid of the 5th respondent for Kesanapalli.

6. Prior to filing the present writ petition, it appears that the petitioner had also approached the Independent External Monitors with this issue. However, the said Independent External Monitors, after hearing the petitioner, had rejected the complaint of the petitioner on the ground that the opinion, in this regard, of the 3rd respondent would have to prevail.

7. Sri P. Sri Raghu Ram, learned Senior Counsel appearing for Sri P. Sri Ram, learned counsel for the petitioner, further submits that a perusal of page 73 of the papers filed along with the additional counter affidavit of respondents 2 to 4 would clearly show that the 5th respondent is not offering one package capable of comprising 50000 SCMD but is actually offering three separate packages, which would upgrade the compression capacity available with the petitioner to 50000 SCMD and the same is impermissible as the petitioner would have to offer what is presently in existence and cannot seek to offer a hypothetical enhancement of capacity in the event of contract in favour of the 5th respondent.

8. The learned Advocate General appearing for respondent Nos. 2 to 4 would submit as follows:

a) The requirement of Clause 2.1(a)-I of the Bid Evaluation Criteria is that the bidder should have the experience of installation and operation of natural gas compression package compressing at least 50000 SCMD for a minimum cumulative period of one year. This would mean that the overall capacity available with the bidder should be 50000 SCMD or more. He relies upon the certification issued by the Oil and Natural Gas Corporation Limited, Surface Team, Rajahmundry Asset, dated 17.09.2021 which states that the 5th respondent had compressed 80000 SCMD for the period of a contract of five years. He submits that this is sufficient compliance of the requirement of Claus 2.1(a)-I.

b) As far as the capacity to provide compression services in the present contract is concerned, he submits that Clause 3.5 of the tender document requires certification of the compressor package capacity by a third party inspection agency listed out under Clause 3.5. He would submit that M/s. TUV Reinland (India) Private Ltd., which is enumerated at Sl. No. 4 of that list had certified that the 5th respondent had three compressors with a capacity of 50000 SCMD each and the same would meet the requirement of Clause 3.3, which sets out the configuration of the compressor package to be, 2 Nos. compressors operating + 1 No compressor standby with a minimum of 0.50 LSCMD rated capacity x 3 Nos.

c) The learned Advocate General would further submit that there is a vital difference between the term gas compressor package and gas compression package in as much as the configuration of the compressor package is set out in Clause 3.5, while the configuration of compression package was set out at a different place in the tender document and the same has been placed before this Court at page 65G and 65H of the papers filed along with the additional counter affidavit.

d) Adverting to the contention of the petitioner that the respondents, having rejected the bid of the 5th respondent for Baramura, had accepted the bid of the 5th respondent in the present contract is concerned, He would submit that the bid of the 5th respondent in Baramura had been rejected on the ground that the 5th respondent had a cumulative capacity of compression capacity of 80000 SCMD while the Baramura compression contract required a compression capacity of 2,00,000 SCMD.

9. Sri P. Sri Raghu Ram, learned Senior Counsel, in reply, contends that the certification by the third party certification agency, relied upon by the respondents, cannot be accepted as the certification relates only to verification of the documents pertaining to the technical bid evaluation and not an actual verification of the machinery. He would further submit that the data sheet, relating to the compressor package of the 5th respondent, filed at pages 73 and 74 of the additional counter affidavit would show that the petitioner is offering three old units and they are actually modified compressor packages which cannot be accepted.

10. Sri P. Sri Raghu Ram, learned Senior Counsel, pointing to Clause 3.0 Equipment Acceptance Criteria of the tender document, would also contends that the compressor package should either be owned by the bidder (in Category-I) or to be cleared by the bidder (in Category-II) or to be obtained under a lease agreement from the registered owners (in Category-III). However, the 5th respondent is offering only upgradation of the compressor packages available and such offer would not fall under any of the 3 Categories mentioned above.

11. Sri N.V. Sumanth, appearing for the 5th respondent, submits that there are only two players in the field in relation to supply of compression services of this capacity. With a view to increase the competition, M/s. ONGC has come up with the conditions of eligibility and experience and the same would not, in any manner, affect the rights of the petitioner to participate in the tender. He further submits that the requirement is to show that the bidder has compression capacity of at least 50000 SCMD per day for at least one year and that has nothing to do with the compressor package or the capacity of the compressors used. He further submits that the petitioner, at paragraph 11 of the rejoinder filed on 05.09.2022, had taken the stand that M/s. ONGC had adopted uniform terms and conditions in relation to tenders for hiring of services for gas compressors and had extracted the said uniform terms. He would point to sub-clause (i) of Clause 2.1, which states that for compression requirement of capacity less than 1 LSCMD - 20,000 SCMD and for more than 1 LSCMD - 50,000 SCMD is required. He would submit that this term itself is sufficient to hold that, even according to the petitioner, the compressor package capacity of 20,000 SCMD would sufficient for undertaking compression of up to 1,00,000 SCMD.

12. Sri N.V. Sumanth, would also point out that the machinery being offered by the petitioner and the 5th respondent are being sourced from the same manufacturer and have literally the same rated capacity. He would further submit that the rejection of the technical bid of the 5th respondent in the tender issued in relation to the Baramura asset was wrong. However, by the time the petitioner could take steps to challenge the same, the price bid of the said tender had been opened and it was found that the 5th respondent was not the L1 tenderer there. As nothing would really survive, the petitioner had not chosen to challenge the said rejection.

Consideration of the Court:

13. The petitioner challenges the acceptance of the technical bid of the 5th respondent on the following grounds:

a) The 5th respondent does not have the experience noticed under Clause 2.1(a)-I of the Bid Evaluation Criteria.

b) The machinery being offered by the 5th respondent does not meet the requirement of Clause 3.3 of the "Scope of Work and Technical Specifications".

c) M/s. ONGC having rejected the technical bid of the 5th respondent in Baramura asset, could not have accepted the technical bid of the 5th respondent for the present tender as the requirement of both tenders are couched in similar language.

d) The attempt of the respondents in trying to contend that the words "compressor package" in the tender in Baramura asset and the words "compression package" in present tender are sufficient to say that disqualification of the technical bid of the 5th respondent in Baramura asset does not automatically require disqualification in the present tender also cannot be accepted.

14. Clause 2.1(a)-I of the Bid Evaluation Criteria requires the bidders who are not manufacturers, to have experience of installation and operation of natural gas compression package comprising at least 50,000 SCMD for at least one year. The 5th respondent had, on a contract with M/s. ONGC, compressed 80,000 SCMD for a period of five years. The certificate issued by M/s. ONGC, dated 17.09.2021 in that regard demonstrates this fact. In the circumstances, it must be held that the 5th respondent has the necessary experience required under Claus 2.1(a)-I.

15. Clause 3.3 of the Scope of work and technical specification requires the bidder to offer a compressor package consisting of two operating and one standby compressors with each of the said compressors having a minimum rated capacity of 0.50 LSCMD. As pointed out by the learned Advocate General, the said rating capacity has to be certified by a third party inspection agency listed out under Clause 3.5 of the tender document. One such agency had certified that the 5th respondent has three compressors with a capacity of 50,000 SCMD each. In the circumstances, the contention of the petitioner that the 5th respondent has compressors of 40,000 SCMD only, cannot be accepted and as such this contention would have to be rejected.

16. The petitioner contended that M/s. ONGC could not have accepted the technical bid of the 5th respondent in the present case when it has rejected the technical bid of the 5th respondent in a similar contract requiring similar capacity and experience. His further contention is also that there is no difference between the terms compressor package and compression package and the artificial differentiation between these two terms cannot be accepted.

17. While it is true that the definition of gas compressor package has been set out in Clause 3.5, the configuration of a compressor package has also been set out in the tender document and the said part of the tender document has now been produced by M/s. ONGC along with the additional counter. A comparison of these two packages would show that there are additional items that need to be added to the compressor package before it could be called as compression package.

18. Apart from the above, the bids offered by the successful tenderers would show that there is a difference of about 30% between the bid of the 5th respondent who is L1 bidder and the other bidders including the petitioner.

19. In such circumstances, this Court does not find any arbitrary action by M/s. ONGC for this Court to intervene in the tender process. Accordingly, the writ petition is dismissed. There shall be no order as to costs. As a sequel, pending miscellaneous petitions, if any, shall stand closed.

Advocate List
  •  P. Sri Ram

  •  D.S. Sivadarshan, Advocate and M/S Indus Law Firm

Bench
  • HON'BLE JUSTICE R. RAGHUNANDAN RAO
Eq Citations
  • LQ
  • LQ/APHC/2022/987
Head Note

A. Tenders and Tender Proceedings — Bid Evaluation — Bid Qualification/Experience — Bidder not a manufacturer — Experience of installation and operation of natural gas compression package compressing at least 50000 SCMD for at least cumulative period of 1 year — Requirement of — 5th respondent had, on a contract with M/s. ONGC, compressed 80000 SCMD for a period of five years — Certificate issued by M/s. ONGC, dated 17.09.2021 in that regard demonstrates this fact — Held, it must be held that the 5th respondent has the necessary experience required under Claus 2.1(a)-I B. Tenders and Tender Proceedings — Bid Evaluation — Bid Qualification/Experience — Bid Evaluation — Bid Qualification/Experience — Bidder not a manufacturer — Experience of installation and operation of natural gas compression package compressing at least 50000 SCMD for at least cumulative period of 1 year — Requirement of — 5th respondent had, on a contract with M/s. ONGC, compressed 80000 SCMD for a period of five years — Certificate issued by M/s. ONGC, dated 17.09.2021 in that regard demonstrates this fact — Held, it must be held that the 5th respondent has the necessary experience required under Claus 2.1(a)-I C. Tenders and Tender Proceedings — Bid Evaluation — Bid Qualification/Experience — Bidder not a manufacturer — Experience of installation and operation of natural gas compression package compressing at least 50000 SCMD for at least cumulative period of 1 year — Requirement of — 5th respondent had, on a contract with M/s. ONGC, compressed 80000 SCMD for a period of five years — Certificate issued by M/s. ONGC, dated 17.09.2021 in that regard demonstrates this fact — Held, it must be held that the 5th respondent has the necessary experience required under Claus 2.1(a)-I