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Tender - Bidder can quote affiliate's expertise

In awarding tenders, the technical experience of a subsidiary company can be taken into account and the parent company cannot be ousted only because it has no experience on its own, the Supreme Court  said while upholding the award of a Metro rail project to a Chinese government company. In this judgment, Consortium of Titagarh Firema Adler SPA vs Nagpur Metro Rail Corporation, the contract for 69 passenger cars and training of personnel was awarded to the Chinese company, though its bid was only marginally lower than that of the consortium.  Therefore, it moved the Bombay High Court where the writ petition was dismissed.

The Supreme Court held that there is no bar, whatsoever, express or implied, in the tender document to treat the parent company along with its 100% wholly owned subsidiaries as one entity. Therefore, the scope of judicial review should be limited in adjudging the decision taken by R 1 in the best interest of the project, and thereby, the public.

the concept of “Government owned entity” cannot be conferred a narrow construction. It would include its subsidiaries subject to the satisfaction of the owner. There need not be a formation of a joint venture or a consortium. A Government company, is the owner of the subsidiaries companies and subsidiaries companies have experience.

 Article referred: http://www.business-standard.com/article/opinion/brief-case-bidder-can-quote-affiliate-s-expertise-117052200061_1.html

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