Evaluation Criteria Without Recorded Reasons or Objective Benchmarks Vitiates the Integrity of Public Procurement

Two bidders, E Trav Tech Limited and M/s Verasys Limited, participated in various Requests for Proposal (RFPs) issued by the Ministry of External Affairs for outsourcing Consular/Passport/Visa (CPV) services in Kuwait, UAE, Singapore, and Australia.

Both petitioners were disqualified at the technical bid stage for failing to secure the minimum 70% qualifying marks.

Earlier, the Delhi High Court and Supreme Court had directed the respondents to disclose the parameter-wise breakup of marks to the petitioners.

Upon disclosure in May 2026, the petitioners challenged the scores as arbitrary, citing inconsistent marking for identical proposals across different missions and a total lack of supporting reasons for the deductions.

Notably, E Trav Tech Limited claimed to be the L-1 financial bidder in all four missions.

1. Whether the petitions are maintainable or barred by res judicata and constructive res judicata in view of previous litigation.

2. Whether the decision-making process in evaluating technical bids was arbitrary, opaque, and violative of Articles 14 and 19(1)(g) of the Constitution.

3. Whether the failure to record and communicate reasons for disqualification and the specific mark deductions vitiates the evaluation.

The Court applied the principles of judicial review in contractual matters as established in Tata Cellular v. Union of India, emphasizing that while the State has freedom in contracts, decisions must be free from arbitrariness and procedural impropriety.

It relied on Jagdish Mandal v. State of Orissa regarding the "irrationality" test in tenders.

It relied on Reliance Energy Ltd. v. Maharashtra State Road Development Corp. regarding the requirement of "legal certainty" and a "level playing field" under Article 14.

Procedurally, the Court cited Rule 173(iv) and Rule 189 of the General Financial Rules (GFR), 2017, and the Manual of Procurement of Non-Consultancy Services (2025), which mandate transparency and the recording of reasons for rejecting bids.

The Court found that the evaluation process was fatally flawed due to a lack of transparency and consistency.

It observed that for objective parameters (like parking area or counter numbers), the respondents deducted marks despite the petitioners exceeding the minimum requirements, without providing any explanation.

For comparative criteria, the respondents failed to disclose the "best offer" benchmark, making the scoring subjective and incapable of objective verification.

The Court highlighted gross inconsistencies: E Trav received 0/7 marks for reputation in Kuwait but 4/7 in UAE for the same documents; Verasys was awarded 0 marks for turnaround time in UAE despite receiving 5 marks for the same 28-minute proposal in Kuwait.

The Court rejected the defense that oral presentations justified the scores, noting that any deficiency found must be recorded contemporaneously.

Furthermore, the exclusion of lower financial bidders through an opaque process was deemed contrary to public interest.

It ruled that the petitions were not barred by res judicata as the disclosure of marks created a fresh cause of action.

The Court set aside the technical evaluation processes and nullified the subsequent award of tenders to the private respondents.

It directed the Union of India to issue fresh RFPs for all four missions within one month.

To prevent service disruption, existing incumbents were permitted to continue until the conclusion of the new tender process.