NAEEM AKHTAR AFGHAN, C.J. This order disposes of Constitution Petition No. 571/2023.
2. Relevant facts of the case are that the petitioner along with other interested contractors/firms applied for pre-qualification for construction of Panjgur Storage barn Project District Panjgur and construction of Awaran Dam Project District Awaran (hereinafter "the two projects").
3. In pre-bid meeting for prequalification, the petitioner raised objections and requested to review the prequalification criteria for evaluating the participating contractors/firms for prequalification according to the criteria laid down by Pakistan Engineering Council ('PEC') but the request of the petitioner was declined by the Project Directors of the two projects (respondents Nos.8 and 9) vide decision dated 28.02.2022 against which the petitioner approached Grievance Redressal Committee ('GRC') on 02.03.2022 with complaints.
4. Due to non-responsive attitude of GRC, the petitioner filed C.P. No.269/2022 before this Court wherein an interim order dated 08.03.2022 was also passed.
5. The reply of the official respondents filed in C.P. No.269/2022 revealed that the complaints of the petitioner were rejected by GRC on 11.03.2022 without hearing the petitioner as the petitioner had received notice of meeting of GRC on 10.03.2022 at 2:20 pm with information to attend the meeting on the same date at 3:00 pm whereas it was not manageable for petitioner to procure attendance of his technical staff in such short interval. The request of petitioner for reasonable time was declined by GRC.
The petitioner challenged the decisions dated 11.03.2022 of the GRC by filing C.P. No.386/2022 before this Court on 21.03.2022.
6. Both the above petitions i.e. C.P. No. 269/2022 and C.P. No.386/2022 were accepted by this Court vide common judgment dated 29.04.2022 in the following terms: "For the above reasons, the Constitution Petitions Nos.269 and 386 of 2022 are accepted. The decision dared 28.02.2022 of respondents Nos. 4 and 5 for not entertaining the objections of the petitioner raised in the pre-bid meeting and the decision of GRC dated 11.03.2022 about dismissal of the complaints of the petitioner are declared void and of no legal effect.
Clauses 2.2.1 (General), 2.2.3 (Similar experience) and 2.2.6 (Financial position) as adopted by the Project Director/ Chairman Procurement Committee/Irrigation Department and the conditions stipulated therein for pre-qualification of the constructors/firms for the subject projects, being discriminatory, being violative of Standard Procedure of PEC, being violative of the decision of PMU dated 10.09.2021, being violative of Rules 13 and 37 of BPPR 2014 and being violative of Articles 4 and 25 of the Constitution are declared null, void and of no legal effect.
The respondents Nos.1, 3, 4 and 5/Project Director/Chairman Procurement Committee are directed to adopt criteria for pre-qualification of the interested constructors/firms for the subject projects strictly in accordance with the Standard Procedure of PEC, the decision of PMU dated 10.09.2021 and in accordance with BPPR 2014 without any favoritism and discrimination.
Copy of the judgment passed today be sent to the respondents as well as Chairman PMU (Deputy Secretary (Water) Ministry of Water Resources, Islamabad for compliance.
7. In compliance of the above common judgment passed by this Court, the eligibility criteria for prequalification of the contractors/firms for the two projects was amended and applications were re-invited for prequalification of the contractors/firms for procurement of the two projects vide advertisement dated 27.05.2022 with last date of submitting applications as 07.07.2022.
8. As per record, 08 contractors/firms submitted their documents with prescribed forms in sealed envelopes for their prequalification for Awaran Dam Project while 07 contractors/firms submitted their documents with prescribed forms in sealed envelopes for their prequalification for Panjgur Storage Dam Project.
9. Due to non-opening of the sealed envelopes of the participating contractors/bidders who had submitted their documents in prescribed forms for their prequalification for the two projects and due to delay in finalization of the prequalification process, the petitioner filed C.P. No.1502/2022 before this Court which was accepted by this Court vide order dated 12.12.2022 in the following terms: "For the above reasons, the Constitution Petition is accepted. The Project Directors of Awaran Dam Project and Panjgur Dam Project are directed to open the sealed envelopes for prequalification of the contractors/firms for the above two projects within 15 days of passing of the instant order with prior intimation of the relevant date to all the concerned, to evaluate the contractors/firms for prequalification according to the eligibility criteria as amended in compliance of common judgment dated 29.04.2022 passed by this Court and thereafter to further proceed proceed with the procurement process for the above two projects according to BPPR, 2014 after approval of the revised/updated cost of both the projects by the Provincial Cabinet as well as ECNEC".
10. Record reveals that petitioner and two other contractors /firms have been prequalified to participate in the procurement process of the two projects. In this regard the petitioner was issued invitation letters dated 19.04.2023 to participate in the bidding process of Single Stage One Envelope Procedure as defined in Rule 41 (2) of the Balochistan Public Procurement Rules 2014 (hereinafter "BPPR 2014") and by PEC after downloading the bidding documents from B-PPRA website or availing complete set of bidding documents in English by submitting an application with payment of non-refundable Rs.5000/- through Green Challan in National Bank of Pakistan with the last date of 10.05.2023 (12:00 Noon) which was extended as 15.05.2023, for submitting bids/financial proposal for the two projects.
11. According to petitioner, clause 15.2 of the bidding documents revealed that for participating in the procurement process for construction of Panjgur Storage Dam, respondent No.9 requires bid security in the form of Bank Guarantee, Deposit at Call (amounting to Rs.515,000,000/- i.e. 4.5% of the estimated value of procurement specified in the name of respondent No.9) from a scheduled bank while for participating in the procurement process for construction of Awaran Dam, respondent No.8 requires bid security in the form of Bank Guarantee, Deposit at Call (amounting to Rs.590,000,000/- i.e. 4.6% of the estimated value of procurement specified in the name of respondent No.8) from a Scheduled Bank.
12. According to learned counsel for petitioner, the petitioner raised objection in pre-bid meeting over the above clause in the light of judgment dated 24.06.2022 passed by this Court in C.P.
No.757/2021 and in the light of Standard Form of Bidding Documents (Civil Works) issued by PEC and approved by ECNEC and requested for option of the bidder to furnish bid security in the shape of Insurance Bond/Guarantee of an Insurance Company having AA rating from PACRA/JCR, but due to non-redressal of its grievance by respondents Nos. 8 and 9, the petitioner approached GRC.
Due to non-decisive attitude of GRC, the petitioner filed the instant Constitution Petition before this Court on 06.05.2023 claiming the following relief: "In view of above factual position and under the circumstances, it is, therefore, prayed on behalf of the petitioner that this Honourable Court may graciously be pleased to issue appropriate directions to the Respondents to the following effect: a) Direct the respondents Nos. 8 and 9 to accept the Insurance Guarantees from a AA ranking Insurance Company for the purposes of submission of Bid Security for the said two Projects from the petitioners and petitioner is entitled for the same under the law; b) Declare that Respondents Nos. 8 and 9's condition based on Rule 29 of the BPPRA rules is illegal, ultra vires to the Constitution of the Islamic Republic of Pakistan, 1973 as well as PEC (respondent No. 4) and Planning Commission Regulations; c) Till acceptance by the Respondents Nos. 8 and 9 of the Insurance Guarantees from the petitioner, the process of Bidding may kindly be suspended in the meanwhile or alternatively the petitioner be allowed to submit his bids for both projects with Insurance Guarantee till the final outcome of this petition; d) Grant cost of the petition; e) Any other relief this Honourable Court may deem proper and appropriate under the facts and circumstances of the case.
INTERIM RELIEF Pending disposal of the instant petition, this Honourable Court may very graciously be pleased to restrain the Respondents from proceeding further in Bids till final disposal of the instant petition".
13. The petition was taken up for preliminary hearing on 08.05.2023. In view of the contention raised by learned counsel for the petitioner and the judgment dated 24.06.2022 passed by this Court in C.P. No.757/2021 (which is holding the field), in respect of the issue raised in the instant Constitution Petition, preadmission notices were issued to the respondents with directions for personal attendance of respondents Nos. 8 and 9 with relevant details.
14. On 12.05.2023, respondents Nos. 8 and 9 informed that complaints filed by the petitioner have been fixed by GRC for hearing on 12.05.2023 at 3:00 p.m.
15. In view of the above, instead of dilating upon merits of the case, on 12.05.2023 the petitioner was directed to attend the meeting of GRC with the observation that if the grievance of the petitioner is not redressed by GRC and cause of action subsist, then the instant Constitution Petition will be decided on merits on 15.05.2023.
16. On 12.05.2023, learned counsel for petitioner expressed his reservation that even if the grievance of the petitioner is redressed by GRC on 12.05.2023 after hearing the petitioner, the next two working days are holidays and as such the petitioner will not be in a position to submit bids/financial proposal for the two projects with required bid security on the last date i.e. 15.05.2023 (12.00 Noon).
17. In response to the above, respondents Nos. 8 and 9 stated that if grievance of the petitioner is redressed by GRC on 12.05.2023 and in failure of the same, if the grievance of the petitioner is redressed by this Court by hearing the petitioner on merits on 15.05.2023, the Irrigation Department/the Procurement Committee has jurisdiction/authority to reasonably extend the fast date for submission of financial proposal for the two projects with required bid security.
18. In view of the above, the petition was fixed on 15.05.2023 at 9:30 a.m. On 15.05.2023, respondents Nos. 8 and 9 informed that the last date for submitting bids/financial proposal for the two projects by the interested contractors/firms with bid security has been extended to 22.05.2023.
19. On 15.05.2023, the minutes dated 13.05.2023 of the meeting of GRC were placed before this Court by respondents Nos. 8 and 9 which reveal that grievance of petitioner was not redressed by GRC in the light of judgment dated 24.06.2022 passed by this Court in C.P. No.757/2021 on the ground that in compliance of the said judgment of this Court, Rule 29(1) of BPPR 2014 has not yet been amended and the Department has to proceed according to un-amended Rule 29(1) of BPPR 2014 with regard to the bid security.
Joint Parawise comments of respondents Nos. 8 and 9 were also filed in Court on 15.05.2023 and copy of the same was also provided to learned counsel for petitioner who requested for hearing of the petition which was not opposed by learned Additional Attorney General, learned AAG and learned counsel for respondents Nos.7, 8 and 9.
20. Learned counsel for petitioner, learned AAG appearing on behalf of respondents Nos. 1, 2, 3, 6 and 10 assisted by Syed Arshad Hussain, Director (J) Irrigation Department, learned counsel for respondent No.4, learned Additional Attorney General for respondents Nos.5 and 11 , learned counsel for respondent No.7 and learned counsel for respondents Nos.8 and 9 assisted by Mr. Nisar Ahmed Project Director Awaran Dam and Mr. Samiullah Project Director Panjgur Dam were heard at length on 15.05.2023.
21. The Constructors Association of Pakistan, petitioner and three other contractors/firms had challenged the requirement of submitting bid security in the shape of Bank Guarantee, Deposit at Call from a scheduled bank for seven different procurements for construction of roads by filing C.P.
No.757/2021 which was accepted by this Court vide judgment dated '24.06.2022, relevant paras whereof are reproduced herein below:
7. After hearing learned counsel for the petitioners, learned Additional Attorney General, learned AAG and learned counsel for respondent No. 3, we have perused the available record. Rule 29(1) of BPPR 2014 reads as follows: "29. Bid Security.--(1) The Procuring Agency shall require the bidders to furnish bid security of two per cent in case of procurement of all bids in the form of bank guarantee or Deposit at Call from a scheduled Bank".
8. In Sindh Public Procurement Rules, 2010, Rule 37 relating to Bid Security requires the bidders to furnish Bid Security not below 1% and not exceeding 5% of the bid price without specifying for Bank Guarantee or Deposit at Call from a Scheduled Bank or insurance bond of an insurance company having at least AA rating from PACRA/JCR.
9. In Khyber Pakhtunkhwa Public Procurement of Goods, Works and Services Rules, 2014, Rule 20 relating to Bid Security requires the bidders to furnish Bid Security of 2% without specifying for Bank Guarantee or Deposit at Call from a Scheduled Bank or insurance bond of an insurance company having at least AA rating from PACRA/JCR.
10. In Punjab Procurement Rules, 2014, Rule 27 relating to Bid Security requires the bidders to furnish Bid Security not exceeding 5% of the bid price without specifying for Bank Guarantee or Deposit at Call from a Scheduled Bank or insurance bond of an insurance company having at least AA rating from PACRA/JCR.
11. In Public Procurement Rules, 2004 (pertaining to Federal Government), Rule 25 relating to Bid Security requires the bidders to furnish Bid Security not exceeding 5% of the bid price without specifying for Bank Guarantee or Deposit at Call from a Scheduled Bank or insurance bond of an insurance company having at least AA rating from PACRA/JCR.
12. Section 8(1) and (p) of Pakistan Engineering Council Act, 1976 (hereinafter "PEC Act") relating to functions of PEC, reads as follows: "8. Functions of the Council. ---The following shall be the functions of the Council, namely:-
(a) .................................
(b) .................................
(c) .................................
(d) .................................
(e) .................................
(f) .................................
(g) .................................
(h) .................................
(i) .................................
(j) .................................
(k) .................................
(l) assistance to the Federal Government as a Think Tank;
(m) .................................
(n) .................................
(o) .................................
(p) establishing standards for engineering contracts, cost and services;
(q) .................................
(r) .................................
(s) .................................
(t) .................................
13. Clause 15.2 of the Standard Form of Bidding Documents (Civil Works) dated 11.06.2007 issued by PEC (available on the websites of PEC and Public Procurement Regulatory Authority ('PPRA')) reads as follows: 15.2 The Bid Security shall be, at the option of the bidder, in the form of Deposit at Call or a Bank Guarantee issued by a Scheduled Bank in Pakistan or from a foreign bank duly counter guaranteed by a Scheduled Bank in Pakistan or an insurance company having atleast AA rating from PACRA/JCR in favour of the Employer valid for a period 28 days beyond the Bid Validity date".
14. The above Standard Form of Bidding Documents (Civil Works) dated 11.06.2007 issued by PEC has been approved by ECNEC (constituted under Article 156 of the Constitution) in its meeting dated 12.11.2007 and has also been notified in the official Gazette by Planning Commission, Government of Pakistan ('GoP') vide Notification dated 12.02.2008 and it is mandatory for all engineering organizations, departments at Federal and Provincial levels and District Governments to use the above Standard Form of Bidding Documents for procurement of Civil Works funded locally or through donor agencies.
15. Surprisingly, in bidding documents of different projects in the Province of Balochistan, GoB issues interest free mobilization advance to the successful bidders for the projects against guarantee for the full amount of mobilization advance from a Scheduled Bank or an insurance bond from an insurance company having at least AA rating from PACRA/JCR, but Rule 29(1) of BPPR 2014 does not provide option to the bidder to furnish bid security of 2% in the shape of insurance bond of an insurance company having at least AA rating from PACRA/JCR in favour of the Employer.
16. In view of all the above; it is concluded that Rule 29 (1) of BPPR 2014 is in contradiction to Sindh Public Procurement Rules, 2010, Khyber Pakhtunkhwa Public Procurement of Goods, Works and Services Rules, 2014, Punjab Procurement Rules, 2014, Public Procurement Rules, 2004 (pertaining to Federal Government) and it is not in conformity with Clause 15.2 of the Standard Form of Bidding Documents (Civil Works) dated 11.06.2007 issued by PEC which has been approved by ECNEC in its meeting dated 12.11.2007 and also been notified in the official Gazette by Planning Commission GoP vide Notification dated 12.02.2008 and it has an obligatory effect/is mandatory for all engineering organizations, departments at Federal and Provincial levels and District Governments for procurement of Civil Works.
17. According to Article 143 of the Constitution, in case of conflict between Federal and Provincial enactments, privilege of overriding supremacy is conceded to the Parliament/Federal legislature.
Reliance in this regard is placed on the cases of Pakistan Telecommunication Co. Ltd v. Member NIRC, 2014 SCMR 535 and Federal Government Employees Housing Foundation v. Ghulam Mustafa, 2021 SCMR 201.
For the above reasons, the constitution petition is accepted and direction are issued to Chief Secretary GoB, Secretary Finance GoB, Secretary Services and General Administration Department GoB, Secretary Law and Parliamentary Affairs Department GoB and Managing Director Balochistan Public Procurement Regulatory Authority to suitably amend Rule 29(1) of BPPR 2014 and bring the same in conformity with procurement rules of sister Provinces, Federal Government and with the Standard Form of Bidding Documents (Civil Works) dated 11.06.2007 issued by PEC.
Copy of the judgment passed today be also sent to Principal Secretary to Chief Minister GoB ".
22. Though Rule 29 (1) of BPPR 2014 has not yet been amended, however, the above judgment passed by this Court in respect of the same is still holding the field.
23. In view of the above judgment passed by this Court holding the field, respondents Nos.8 and 9 as well as GRC have erred in insisting for furnishing Bid Security for the two projects in the 'shape of Bank Guarantee or Deposit at Call from a Scheduled Bank and excluding the option of bidder to furnish Insurance Bond/Guarantee of an Insurance Company having AA rating from PACRA/JCR.
24. In the above regard, respondents Nos. 8 and 9 as well as GRC have failed to appreciate clause 15.2 of the Standard Form of Bidding Documents (Civil Works) dated 11.06.2007 issued by PEC which reads as follows: "The Bid Security shall be, at the option of the bidder, in the form of Deposit at Call or a Bank Guarantee issued by a Scheduled Bank in Pakistan or from a foreign bank duly counter guaranteed by a Scheduled Bank in Pakistan or an insurance company having at least AA rating from PACRA/JCR in favour of the Employer valid for a period 28 days beyond the Bid Validity date".
The above clause has also been approved by ECNEC in its meeting dated 12.11.2007 and notified in the official Gazette by Planning Commission Government of Pakistan vide Notification dated 12.02.2008 and is having an obligatory effect/is mandatory for all Engineering Organizations, Departments at Federal and Provincial levels and District Governments for procurement, providing option to the bidder either to submit Bid Security in the form of Deposit at Call or a Bank Guarantee issued by a Scheduled Bank or to submit an Insurance Bond/Guarantee of an Insurance Company having AA rating from PACRA/JCR in favour of the Employer valid for a period 28 days beyond the Bid Validity date.
25. It cannot be ignored that for procurement of different mega projects worth billions including Bridges and Roads of National Highway Authority ('NHA') and different Dam projects of Irrigation Department, the bidders participating in the procurement process have been provided option of submitting Bid Security in the shape of Insurance Bond/ Guarantee of an Insurance Company having AA rating in conformity with the Standard Form of Bidding Documents (Civil Works) dated 11.06.2007 issued by PEC having been approved by ECNEC and notified in the official Gazette by the Planning Commission Government of Pakistan being mandatory and having binding effect.
26. The Project Management Unit ('PMU') for Water Sector Projects of Balochistan (respondent No.11) in its meeting dated 10.09.2021 has also emphasized to follow the guidelines of PEC in letter and spirit while procuring the Consultants as well as the contractors/firms for the projects.
27. In view of judgment dated 24.06.2022 passed by this Court in C.P. No.757/2021 holding the field, excluding the option of the bidder from the bidding documents of the two projects by respondents Nos. 8 and 9 for submitting Bid Security in the shape of Insurance Bond/Guarantee of an Insurance Company of AA rating is contemptuous as well.
28. Rule 37 of BPPR 2014 prohibits discriminatory and difficult conditions for procurement while Rule 41 of the BPPR 2014 provides procedure for open competitive bidding.
Presently, for procurement of the two projects, only three contactors/firms (including the petitioner) have been prequalified. If the petitioner fails to submit Bid Security with the bids in the shape of Bank Guarantee or Deposit at Call amounting to Rs.515.000,000/- (for procurement of the construction of Panjgur Storage Dam) and amounting to Rs.590,000,000/- (for procurement of the construction of Awaran Dam) and if the petitioner is not permitted to furnish Insurance Bond/Guarantee of an Insurance Company of AA rating in the above sum as Bid Security with its bids for procurement of the two projects, the petitioner will be deprived of submitting its bids/financial proposal for the two projects and in such circumstances, only two prequalified bidders will be able to submit their bids/financial proposals for procurement of the two projects which cannot be termed as competitive bidding within the purview of BPPR 2014 and same will also be violative of Rules 37 and 41 of BPPR 2014.
29. For all the above reasons and for the sake of competitive bidding for the two projects, the instant Constitution Petition has already been accepted by us vide short order dated 15.05.2023 which reads as follows: "For the reasons to be recorded later on the petition is accepted and the petitioner is permitted to furnish 4.6% bid security for Awaran Dam and 4.5% bid security for Panjgur Dam in the shape of guarantee/insurance bond of AA Rating Insurance Company of Pakistan with its financial proposals for Awaran Dam Project and Panjgoor Dam Project".
The above are the reasons of our short order dated 15.05.2023.