L&T: Angry protest at C-26 disqualification

Vol 18, PW 16 (09 Apr 15) Exploration & Production

Contractors often appeal to ONGC’s dispute resolution Independent External Monitors (IEMs) for dubious reasons.

But Larsen & Toubro (L&T) might have a case in the C-26 pipeline tender where it appealed to the IEMs on March 25 against its disqualification. ONGC managers in Mumbai recommended in March that it open the price bids of two companies submitted by the February 20 deadline: Swiber bidding alone and Valentine Marine partnering Supreme Offshore.

L&T’s bid with Malaysian company TL Offshore was rejected for failing to meet Clause 5.4 of ONGC’s bid evaluation criteria which states the pipe-laying barge must be directly owned by one of the consortium members. In this case the barges offered are owned by a TL Offshore subsidiary.

L&T argues that the Supreme Court has in several cases upheld the ‘alter ego’ concept of relationships between a parent and its subsidiary where the two are recognised as the same entity. L&T states this applies to TL Offshore and its subsidiaries.

Still unclear is how ONGC’s IEMs will respond but price bids are unlikely to be opened soon. If the IEMs rule against L&T expect it to drag ONGC to court.

L&T confirms it wrote to the IEMs on March 25 and complains that ONGC managers are looking at TL Offshore’s barge ownership “with the eyes of a clerk, not a technocrat.”