A Fall in US dollar proved costly for an Indian company as it failed to procure the tender to supply machines required by the Ministry of Defence (MoD) for production of Pinaka rocket launcher by the Ordnance Factory at Ambajhari.

And the winner was Hess Engineering Inc of the US. Pune-based HYT Engineering Company Limited lost the deal as the US dollar has fallen vis-a-vis Indian rupee on the date of award of the contract, making the US firm the lowest bidder.

The HYT, engaged in the business of manufacturing machine tools, had challenged this development before the Nagpur Bench of the Bombay High Court on the grounds that the tender was originally awarded to them for being the lowest bidder.

A division bench of Justice D D Sinha and Justice A P Bhangale recently dismissed the petition after observing that the MoD and the Ordnance Factory Board (OFB) were justified in awarding the contract to the US firm on the basis of circulars in 1988 and 1992.

On October 10, 2005, a tender was floated by the MoD for supply of one three-roller, four-axis CNC Flow Forming Machine for production of rockets. The technical bid was deferred from time to time. Eventually, on February 10, 2006, the tender was opened. Subsequently, the tender evaluation committee of the MoD assessed the tenders submitted by HYT as well as Hess Inc as technically qualified for the bid.

In October 2006, when the price bids were opened, HYT was found to be the lowest bidder with the quoted price of Rs 18,49,13,681 while the US company quoted its price at $3169320, which comes to Rs 20,09,70,715. In July 2007, the tender purchase committee called upon the Indian company for price negotiation. Following negotiations, the committee decided to recommend the petitioner for awarding the contract.

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