Modification of offer before closing time of tender

Shared Documents Joined: May 02, 2005 No. of Replies: 1237

At times contractor after submission of his offer in prescribed tender forms in the tender box deposits another envelope in the tender box before the schedule time of closing of the tender box modifying the original offer submitted by him after seeing the response for the tenders.

In the modified offer he decreases the rate when he senses competition and increases the rate if he sees no participation from other tenderers for the said work.

One cannot say that this is a post tender correspondance as the revised offer has been submitted even before the closing time for submission of tenders. How are these offers to be considered (original offer/modified offer)?.

Submission of EMD in separate cover (not with the original tender documents) is not uncommon and such EMDs deposited separately are being considered. In same manner should we not consider the rates modified by them in a separate envelope submitted before closing of tender box.

Shared Documents Joined: No. of Replies: 979

I could not locate specific instruction on this situation but as common sense ,It appears that such revised offers need to be considered if it has been put before sealing the tender box .

Shared Documents Joined: No. of Replies: 90

SCR Law branch in a specific case opined that such modified offer even if dropped in the box before sealing, should be ignored. He opines that each offer should be accompanied by EMD. Original offer will be with EMD and the modified offer w/o EMD. Dropping the original offer & EMD seperately as mentioned by Sri Natarajan, of course, I have not heard in S C Rly.

Putting in a different perspective, normally modified offers are not in the interest of the Rly. It is a part of contractors' unholy game plan. Therefore, I feel it is in the interest of the Railways not to consider such modified offers.

Specific policy guidelines need to be issued accordingly.

Shared Documents Joined: No. of Replies: 47

Everything found inside the box has to be dealt with. In case there is a separate communication with reference to an offer also found in the box, the same has to be considered, be it revision of the referred offer or some addition to it.

regards,

Rajeev.

Shared Documents Joined: No. of Replies: 323

I think we have to look at the issue in a right perspective.Once a tenderer has submitted his offer i.e. the tender document in complete way .That offer is to be treated as his offer. Any document other than above which may be in the shape of a seperate letter submitted by the same tenderer is to be treated as a post tender communication because this communication is not the complete offer by itself even if it is submitted well before tender box has been sealed at the nominated time.Therefore ,in my opinion this should be dealt as a post tender communication as per extant rules.

Shared Documents Joined: No. of Replies: 979

In absence of clear instruction on such situation, it may be difficult for field engineer to ignore such letter particularly in case when tenderer becomes lowest by virtue of this letter.

Shared Documents Joined: May 02, 2005 No. of Replies: 1237

When EMDs tendered in separate covers are accepted, i cannot see any reasons why offers modified before the schedule closure time for receiving tender documents cannot be accepted.

There are cases where the tenderer modifies the rate quoted in the tender schedule in his covering letter by giving a discount on the rates offered while submitting all the documents together which are considered by the TC. But in our case the modification of rates is given in a separate cover. Why cant be the modified offer submitted before closure of tender box considered as if they are submitted along with the original offer and part and parcel of the same.

This is a tricky situation for which clarifications can be asked from the Railway Board.

Shared Documents Joined: No. of Replies: 323

I feel that the practice of accepting earnest money by a tenderer through a seperate cover other than the original tender papers involves dangerous implications . Therefore, in my view,such thing should not be allowed.
Similarly, allowing the tenderer to offer discount over his rates already submitted in his tender papers through a seperate cover is also fraught with dangerous implcations. For example, several tenderers may start reducing rates in competition after depositing their tender papers if they come to know each other rates .They may do so in several rounds.That may create a snowballing tendency which enables tenderer to go on reducing rates several times till he is sure he is lowest.Now ,in that situation what you do would be a really tricky situation to handle.
That is why ,I had given my views that any thing submitted by a tenderer through a seperate letter other than tender papers should be treated as a post tender communication and should be dealt accordingly as per extant instructions from Railway Board on the subject.

Shared Documents Joined: May 02, 2005 No. of Replies: 1237

I agree to the views expressed by Shri.Shiv Kumar Sir regarding the implications. In absence of any clear cut circular from the Railway Board on this issue, we may incorporate a condition in our tenders that such modification of original offers even before closing time of receipt of tenders will not be taken cognigance of and the original offer will always stand good.

Shared Documents Joined: No. of Replies: 11

A party(tenderer) is fully within legal competence as per 'contract act' to modify his offer before it(offer) comes to knowledge of another party(RLY). Therefore there is nothing wrong in this practice. submission of EMD separately but within tender box before closing is also valid.

Shared Documents Joined: May 02, 2005 No. of Replies: 1237

Can we discuss the implications. As brought out by Shiv Kumar sir, the implications are rather unholy. I have heard of mock tender opening being done by the prospective tenderers themselves to decide the lowest tenderer among themselves and then form a cartel. In fact there is no confidentiality maintained regarding the sale of tenders by the tender clerks. Since sale of tender in the office is stopped by 12.00 Hrs on date of opening, the tenders know who are participating in the tenders. However if they see a new tenderer coming to drop his tender in the tender box, they intercept to see the details of work for which he is giving his offer. If it is for the same work for which they have formed the cartel (and the document is perhaps down loaded) they first persude him to join them in their cartel and if does not agree declare the cartel as broken so that all tenderers of the cartel are free to modify their offers.

In many tenders, the rates are revealed by the contractors amongst themself after sealing of tender box, but before opening due to their eagerness to know who is the lowest. Thus the rate can get revealed even before opening of the tender.

So it will be in the better interest if we include a tender condition that the offer once submitted in the tender box is irrevokable and cannot be modified. Perhaps somebody can throw some light on the clause in the contract act (if any) which may forbid from doing so.

Shared Documents Joined: No. of Replies: 47

Interesting thoughts indeed. However, post tender communication means anything which does not come out of the sealed box. Thus anything found inside the box has to be taken into account. If there is a communication referring and connecting to another (complete) offer inside the box, then the two have to be connected and implications should be worked out. For example, you can not hold a tenderer to his offer if he puts in another letter before the box is sealed, mentioning that he is withdrawing his offer. By extension, same applies to EMD in separate envelope or modifications to rates.
Now coming to the second aspect of cartels, in-house friendly competition and bullying outsiders after coming to know who has bought the forms. The recent phenomenon of posting tender notices and forms on Internet has been the single most effective tool in countering such malpractices. I have worked in one of the worst affected divisions (LKO) and have found that the mere knowledge- that anyone could have downloaded the form and may be sending it by post/ putting it in the tender box- is deterrent enough on the manipulators.

Shared Documents Joined: No. of Replies: 51

Indian contract act does not forbid the tenderers to modify their offers even after they have been received by the other party. It is our own rules which have put restriction on us, banning consideration of post tender offers/ modifications. The post tender phase starts after opening of the tender box. So here we are bound to take into account everything that comes out of the box.

Infact commentaries on Contract act , summarising the Judgements of the Courts say that if a tenderer modifies his offer at any stage and the modification comes to the knowledge of the other party by any means, then his original offer is no longer available for the acceptance. It is because of this legal position that in case of negotiations, we first obtain an undertaking from the tenderer that in case of failure of negotiations, his original offer would stand, otherwise he can very well increase his rates in the negotiations and his original rates would no longer be available for accpetance in the absence of undertaking.

In fact any post tender modification is legally a withdrawal of the premodification offer by the tenderer and should be treated as such, that is legally we can not ignore his post tender communication and can not merrily go on considering his original offer. He can very well wriggle out of the situation and would be saved by the law.

As far as scene in Mumbai division is concerned , we can easily avoid all these complications by inserting one line in NIT-"The offer has to be in one sealed envelope and if a tenderer uses multiple envelopes his offer would be summarily rejected."

A. P. Malik
DyCE/Br/DADAR

Shared Documents Joined: May 02, 2005 No. of Replies: 1237

In one of the cases, a tenderer quoted a rate of `X% above SOR in his original offer and increased his offer to (X+Y)% in a separate letter in a separate cover put in the tender box. He was the first lowest by the way of his original offer and second lowest as per modified offer.

Tender commitee considered his rate as ambigous and ignored his offer. It was also delibrated that his rates at `X% above were also unworkable and Tender was cancelled without delibrating the offer of the next tenderer.

In case the offer of the first lowest is found ambigous, should not the offer of second lowest considered by the TC whose rates are found reasonable or just because there is an element of doubt in the minds of the tender committee about the rates quoted by one of the tender, the tender should be cancelled.