‘Awarding work to lowest bidder not mandatory’

The Bombay High Court recently held that it is not mandatory for the BMC to accept the lowest bids received for tenders called for construction work.

The civic body, during hearing of a case, had contended that the tender process for road work projects resulted in various local contractors bidding at low rates. The contention of the civic body was that as a public authority, it had no option but accept the lowest bid.

The High Court observation is relevant in the present context, wherein tender process for civic works is often manipulated and misused by contractors, leading to substandard construction in several cases.

Referring to the BMC stand, a full bench of Chief Justice Mohit Shah, Justice Ranjit More and Justice A A Sayed said, "While awarding contracts for construction of roads, the municipal corporation has been proceeding on the erroneous basis that a public authority has no option but accept the lowest bid, even if the bid is 20-25 per cent less than the estimated cost of the project."

The judges referred to section 72 (2) of the Mumbai Municipal Corporation Act, which states, "The Commissioner shall not be bound to accept any tender, which may be made in pursuance of such notice, but may accept...any of the tenders so made which appears to him, upon a view of all the circumstances, to be the most advantageous."

The court in its order said, "It appears to us that the municipal corporation is entitled and empowered to reject a bid, which may be the lowest, for awarding a contract, if the bidder with the lowest bid is not able to satisfy the municipal corporation about its ability and competence to execute work of the required quality and standards."

The judges said the corporation can look into the past performance of a contractor both in terms of quality of work and the time taken to complete it.

The order was passed in response to a petition by a Nationalist Congress Party leader Niyaz Ahmed Vanu demanding that a tender process be made mandatory for appointing a company to audit the city's roads.

On December 14, his petition was dismissed by the court.

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