Airport Authority of India: Prequalification

Introduction
 Petitioner: JV of Gammon India Limited and M/s. F. LLI Costanzo S.P.A. Italy.  
 Respondent No. 1: National Highway Authority of India (NHAI).
 On Behalf of NHAI, The Ministry of Surface Transport issued an invitation for the
prequalification of contractors. Five contractors including contract 1 are referred  in
the prequalification document.
 "CONTRACT-1 Haryana and Rajasthan States, National Highway No. 8 Laning,
including strengthening of existing 2 lane payment, between Gurgaon in Haryana
State and Kotputli in Rajasthan State (Km. 36.63 to Km. 162.50).
 The applicants are prescribed & instructed to submit their inter alia along with the
details that has executed and at hand during five years.
 The applicants must set out the format for prequalification document i.e., from
schedule A to J.
Responsiveness of Bid
Constanzo
 JV was prequalified on the basis of the information required for the prequalification
and they were about to submit and valid for the bid documents in 180 days i.e., after the date of
opening the tender on 5th Jan 1996.
The Chairman of NHAI conducted a meeting for the evaluation of bids and further discussions.

In the meeting it was found that M/s. Gammon India Ltd. and M/s. Shankar
Narayana Construction Co. were considered as non-responsiveness because of their poor
performance in the work of Sikar-Pilani Road in Rajasthan under World Bank Loan Assistance
and construction of Tunnel No. 9 of Konkon Railway Corporation Ltd. India respectively.  
The bid of M/s. Gammon India Ltd. F.LLI Costanzo JV was not considered for further

evaluation.  As per the Clause 3.8 of the instructions further provides that "even though an
applicant may meet the above criteria, he is liable to be dis-qualified if they have made
misleading or false representations in the documents, statements, attachments submitted".


Schedule-G
Explanations by GIL lawyer to NHAI
 There was no verification done with regard to the alleged abandonment of the project on Sikar-Pilani Road
and the decision suffers from lack of procedural fairness  
 It was the duty of the Authority to act impartially and the petitioner having been adjudged as pre-qualified
for the work in question should have been awarded the contract. 
 The reason of GIL’s failure in Rajasthan project were due to clients inaction/delayed action related to
foreign payments; issuance of drawings; clearing the obstructions etc. The land acquisition also could not
be completed in time and in consequence only separate stretches were handed over to GIL in part without
continuity.  
 This resulted in substantial delays to the construction. As a result, the construction time spilled over beyond
the original period. The application for extension of time was submitted to the Department. However, the
application was not entertained. Our escalation payments were stopped. In addition, regular monthly
payments were also erratic.
 This has resulted in a financial force majeure condition. Despite a number of pleas from GIL, the
Department did not consider the various factual conditions and decided to arbitrarily levied Liquidated
Damages.  
1.Can a party already pre-qualified by a public
client be disqualified in the subsequent stage?
2.Does responsibility of verification of details furnished
by bidder during PQ phase lies with the client?

 The responsibility of the client doesn’t lies with the bidder applicant during the
prequalification phase. The verification of prequalification documents should be
in detail and should be responsive as mentioned in the format Schedule A to J.
 The petitioner should be free from the preceding works in which he/she has
executed and then only the bidder is applicable to be qualified for the PQ phase.
3.Could court interfere in the merit of
decision of rejecting the bid of GIL JV?
 The Court is not expected to interfere with the exercise of administrative discretion on
substantive grounds, save where the decision is so unreasonable that it is beyond the
range of responses available to reasonable decision-maker. 
 In the present case, the petitioner had been granted an opportunity to make
representation before the final decision was taken to hold the bid to be nonresponsive. 
 The facts as stated have not been denied though some justification is offered for not
completing the Sikar-Pilani Road project. In this background, no further verification
was necessary nor required, particularly, when the petitioner did not dispute the
averments made by the respondent-Authority.
  In view of the above reasons, it cannot be said that the decision taken by respondent
No. 1 is arbitrary, illegal and irrational or the Authority has abused its powers. The
present petition is dismissed. There will be no order as to costs.