XYZ Vs. Navodaya Vidyalaya Samiti and Other

Case No. 25 of 2024 Page 1 of 8 COMPETITION COMMISSION OF INDIA Case No. 25 of 2024 In Re: XYZ (Confidential) Informant And Navodaya Vidyalaya Samiti B-15, Institutional Area, Sector 62, Noida, Uttar Pradesh – 201307. Opposite Party No. 1 RailTel Corporation of India Ltd. Plate – A, 6th Floor, Office Tower – 2, NBCC Building, East Kidwai Nagar, New Delhi - 110023 Opposite Party No. 2 CORAM Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 26(2) of the Competition Act, 2002 1. The present Information has been filed by XYZ (“Informant”) under Section 19(1)(a) of the Competition Act, 2002 (“Act”) before the Competition Commission of India (“CCI”/ “Commission”), alleging contravention of the provisions of Section 3 and 4 of the Act by Navodaya Vidyalaya Samiti (“Opposite Party No. 1”/ “OP-1”/ “NVS”) Case No. 25 of 2024 Page 2 of 8 and RailTel Corporation of India Ltd. (“Opposite Party No. 2”/ “OP-2”/ “RailTel”) (collectively referred to as “OPs”/ “Opposite Parties”). 2. The Informant has sought confidentiality over its identity as per Section 57 read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009. 3. As per the Informant, OP-1 is an autonomous body under the Ministry of Education engaged in furthering the objectives of the Prime Minister Schools for Rising India (“PM SHRI”) scheme (“the Scheme”) through establishment of Jawahar Navodaya Vidyalaya (“JNV”) schools across India. As stated, OP-2 is a Mini-Ratna Category-I Public Sector Undertaking (“PSU”) engaged in the business of providing telecom infrastructures. 4. The Informant has stated that, OP-2 obtained a Work Order dated 24.01.2024 from OP- 1 for ‘Supply & Implementation of Integrated Infrastructure & IT solutions under PM SHRI Scheme in JNVs Schools’ for an amount of Rs. 162.73/- crores (Rupees One Hundred Sixty Two Crores and Seventy Three Lakhs Only). Thereafter, OP-2 floated Tender No. RailTel/RFP/COMKTG/EB/IT/NVS/PMC/2023-24 dated 01.12.2023 namely Request for Proposal (“RFP”) for Selection of partner for supply & implementation of Integrated Infrastructure & IT solutions at multiple locations pursuant to the above-mentioned Work Order. The Informant has alleged that this RFP was designed to oust a majority of bidders by way of having stringent and arbitrary technical specifications that did not correspond to industry standards and resulting in a tacit agreement between the Opposite Parties, thereby violating the provisions of Section 3 of the Act. 5. It is alleged that both OP-1 and OP-2 have abused their dominant position in the market by acting in an opaque and arbitrary manner. As per the Informant, the selection of OP- 2 by OP-1 was not done through a fair and transparent process. Instead, without any due reason assigned for the same, the Work Order was given to OP-2, despite it having no prior expertise or any relation with the PM SHRI Scheme. This is also stated to be Case No. 25 of 2024 Page 3 of 8 evidenced by the fact that, as per the description provided on the official website of OP- 2, it is mainly engaged in the business of modernizing the existing telecom system for train control, operation and safety, creation of nationwide broadband and multimedia network and laying optical fiber cable using the right way along railway tracks. 6. As per the Information, OP-1 without any due procedure and consideration of relevancy, appointed OP-2 as the Project Management Consultant (“PMC”) for implementation of the work of Supply & Implementation of Integrated Infrastructure & IT solutions under PM SHRI Scheme in JNVs Schools. OP-1 has not provided any reasonable justifications as to why OP-2 was selected to carry out the said Work Order. This has been stated to be in violation of the provisions of Section 4(2)(b)(i) of the Act. 7. The Informant has alleged that OP-2 has abused its dominance by publishing the RFP with certain technical specifications resulting into disqualification of potential bidders from participation in the bidding process. OP-2 proceeded with the bidding process in an opaque and secretive manner whereby no details have been provided about the bidding. Following issues have been highlighted by the Informant, with respect to the terms provided in the RFP issued by OP-2: (i) OP-2 has clubbed different products into one single tender i.e., the RFP, with no regard for the fact that supplies of different products require different technical specifications and expertise, thereby making it improbable for any bidder to carry out the Work Order in the form released by OP-1. (ii) OP-2 is stated to have provided brief and vague specifications for certain services in the RFP, namely – construction of additional classrooms and art & craft rooms etc. The price of each service varies according to the nature of the work and the same cannot be estimated ex-ante without proper specifications and parameters as was required to be set by OP-2 in its RFP. (iii) Prequalification criteria appears to be heavily biased towards IT and ICT companies, excluding companies with expertise in construction and other relevant areas, which effectively narrows the pool of eligible bidders to those with specific affiliations or capabilities aligned with the interests of OP-2. Case No. 25 of 2024 Page 4 of 8 (iv) A lackadaisical approach has been taken with regard to the RFP, whereby important information pertaining to the work has been omitted which reeks of malafide and indicate a general ignorance for the sanctity of the procedure of public procurement that is supposed to be fair, transparent and non-arbitrary. (v) OP-2, in the RFP, has not disclosed the locations where the work is to be carried out due to which certain factors such as regulatory barriers and local specification requirements cannot be determined. Due to the arcane nature of the locations where the works are to be carried out under the RFP, it is necessary to take into account the local factors such as language, demographics etc., to implement the PM SHRI scheme in the most efficient manner, which has been minimized by OP-2 by disallowing fair bidding. (vi) Corrigendum 1 to the RFP dated 15.12.2023 introduced restrictive bid qualifications, including a minimum qualifying turnover of over 450 crores and mandatory Capability Maturity Model Integration (“CMMI”) Certificate which is not justified by the Scope of Work and served to exclude many potential bidders who could otherwise fulfill the contract efficiently. (vii) The agreement and bidding process have contravened the Public Procurement Policy for Micro and Small Enterprises (“MSEs”) Order, 2012, as amended in 2022, by not ensuring fair and equal opportunity for MSEs. This exclusion of MSEs from the bidding process violates the principles set forth in the MSME order, which mandates a minimum 25% procurement from MSEs. (viii) RFP lacked a provision for a pre-bid meeting which is crucial for clarifying doubts and ensuring a comprehensive project understanding. It is also stated that the RFP was categorized under “Service Category” on RailTel’s website significantly hindering its visibility to potential bidders. As per the Informant, it should have been under “Works and Supply” category for wider reach and transparency. 8. The Informant has stated that both the Opposite Parties fall within the definition of enterprise citing Section 2(h) of the Act. The Informant, based on several factors under Section 19(7) of the Act, has defined the relevant product market as “ATL Cum Skill Lab, Composting Facility for Kitchen & Garden Waste, Construction of additional