Emphasising that tendering authority is the best judge of its own tender conditions, the Bombay High Court has upheld Bharat Petroleum Corporation Limited (BPCL’s) methodology of dividing the total value of a completed multi-year contract by its contractual tenure to compute the annualized value for Bid Qualification Criteria (BQC) evaluation, rejecting the bidder’s contention that individual year Work Completion Certificates should be considered.
The Court held that Corrigendum No. 1 dated 8 June 2026, which permitted consideration of Work Completion Certificates (WCCs) of individual years for multi-year contracts, applied only to bidders who participated on the basis of ongoing Purchase Orders and not to bidders with completed contracts. Relying on the decisions of Galaxy Transport Agencies vs. New J. K. Roadways, Fleet Owners & Transport Contractors [(2021) 16 SCC 808] and Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. [(2016) 16 SCC 818], the Court reiterated that courts will not second-guess the tendering authority’s interpretation of its own tender documents unless there is mala fides, perversity, or manifest arbitrariness.
The Petitioner, a Micro and Small Enterprise (MSE) bidder seeking to qualify under the third alternative requiring three Purchase Orders each of annualized basic value of Rs. 11.72 crores, failed, because only one of its three credentials met the threshold, while the other two fell short. The Court noted that the L-1 bidder was selected based on three concluded contracts with annualized values of Rs. 13.42 crores, Rs. 13.48 crores, and Rs. 16.61 crores, all meeting the BQC threshold, and that the Corrigendum had no role to play in the selection process.
Briefly, Vidya Caterers, a partnership firm engaged in industrial catering and registered as a Micro and Small Enterprise (MSE), challenged the rejection of its technical bid for the tender floated by Bharat Petroleum Corporation Limited (BPCL) for outsourcing canteen services at the BPCL Mumbai Refinery for a period of three years. The tender was a two-bid process comprising Bid Qualification Criteria (BQC) and a Price Bid. Under Clause 1.2 of the BQC, an MSE bidder could qualify by demonstrating three successfully executed Purchase Orders/Works, each having an annualized basic value of not less than Rs. 11.72 crores.
Following a pre-bid meeting held on 1 June 2026, BPCL issued Corrigendum No. 1 dated 8 June 2026, clarifying that Purchase Orders with corresponding Work Completion Certificates (WCCs) of individual years for a multi-year contract may be considered, and that only such POs and jobs without price escalation would be considered. BPCL computed the annualized values by dividing the total contract value by the tenure, arriving at Rs. 10.195 crores, Rs. 12.66 crores, and Rs. 8.5 crores respectively, and concluded that only the second MRPL credential met the Rs. 11.72 crore threshold. The Petitioner’s technical bid was rejected on 24 August 2026 with a generic remark that the bidder did not meet the BQC criteria.
The Division Bench comprising the Chief Justice Mahesh Chandra Tripathi and Justice Advait M. Sethna observed that the scope of judicial review in contractual matters, and particularly in matters of interpretation of tender documents, is very limited. It reiterated that the authority which authors the tender document is the best person to understand and appreciate its requirements, and its interpretation should not ordinarily be second-guessed by a court in judicial review proceedings unless there is mala fide, perversity, manifest arbitrariness, or illegality.
The Court noted that out of eight bids received, three bidders were disqualified in the BQC evaluation, including the Petitioner, while five bidders qualified, of whom two submitted concluded contracts and three submitted documents relating to ongoing contracts under the Corrigendum. The L-1 bidder was selected based on three concluded contracts with annualized values of Rs. 13.42 crores, Rs. 13.48 crores, and Rs. 16.61 crores, all of which met the BQC threshold.
The Court observed that the Corrigendum was issued to widen the zone of consideration and introduce the category of bidders with ongoing contracts, and not to alter the evaluation methodology for completed contracts. The Petitioner admittedly participated in the bid on the basis of completed contracts, and the selection of the L-1 bidder was also on the basis of completed contracts meeting the annualized value threshold under Clause 1.2 of the BQC.
