Tender evaluation on cost-to-user basis upheld; customs duty included and L1 determination found non-arbitrary.
Where the RFP was silent on the bid-comparison method, the Delhi HC held that the procuring authority could adopt a reasonable cost-to-user evaluation framework, including taxes and duties, and it refused to interfere with the treatment of customs duty as part of the bid. The petitioner's attempt to reopen bid computation after opening was rejected. Applying the limited scope of judicial review in tender matters, the Court also upheld the declaration of the second respondent as L1 because the comparative assessment was conducted uniformly and no mala fides, arbitrariness, irrationality, or perversity was shown. The writ petition was therefore found to lack merit.
Issues: (i) Whether the tender bids were to be evaluated on a cost to user basis including taxes and duties, and whether customs duty could be treated as part of the bid despite the petitioner's clarification; (ii) Whether the declaration of the second respondent as L1 was arbitrary.
Issue (i): Whether the tender bids were to be evaluated on a cost to user basis including taxes and duties, and whether customs duty could be treated as part of the bid despite the petitioner's clarification.
Analysis: The RFP did not prescribe a mandatory method of comparison. In the absence of a clear stipulation, the procuring authority was entitled to adopt a reasonable evaluation method from the applicable procurement framework. The chosen approach of cost to user, which included taxes and duties, was held to be a permissible method in the procurement context. The petitioner's attempt to exclude customs duty or to revisit its bid computation after opening was not accepted as a ground for judicial interference.
Conclusion: The evaluation on a cost to user basis was upheld and the customs duty component was treated as part of the bid; the petitioner's challenge on this ground failed.
Issue (ii): Whether the declaration of the second respondent as L1 was arbitrary.
Analysis: Judicial review in tender matters is limited and interference is warranted only where the decision is mala fide, irrational, or arbitrary. On the materials placed, the authority applied the selected evaluation method uniformly and reached the L1 determination on the basis of the comparative commercial assessment. No patent illegality, mala fides, or perversity was established.
Conclusion: The declaration of the second respondent as L1 was not arbitrary and was sustained.
Final Conclusion: The writ petition was found to lack merit and the impugned tender decision was left undisturbed.
Ratio Decidendi: Where a tender document is silent on the method of bid comparison, the procuring authority may adopt a reasonable evaluation basis from the governing procurement framework, and the court will not interfere with the commercial assessment absent mala fides, arbitrariness, or irrationality.
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