TLH Represents Jaykay Enterprises Before the Andhra Pradesh High Court in DRDO Tender Challenge

The lowest bid was INR 1.44 crore. Reading the tender’s earnest money deposit, the Court noted that the estimated cost of the procurement worked out to between INR 8.88 crore and INR 22.20 crore. When a bid falls that far below the estimate, what must the procuring authority do before accepting it?

TLH, Advocates & Solicitors represented Jaykay Enterprises Limited before the High Court of Andhra Pradesh. The client challenged a tender issued by the Naval Science and Technological Laboratory (NSTL), a DRDO laboratory, for the Processor-Based Moored Mine – Next Generation (PBMM-NG) programme. The tender covered seven PBMM-NG units, four explosive-filled warhead shells, test systems and fixtures, and technical services.

Apollo Micro Systems Limited was declared L-1 at approximately INR 1.44 crore. Jaykay Enterprises had quoted INR 13.99 crore. It placed before the Court quotations from NSTL-registered suppliers, NSTL’s own indicative component prices and a recent contract rate for a single sub-assembly. On that material, it argued that the L-1 bid called for scrutiny under Clause 6.42(b)(ii) of the DRDO Procurement Manual, 2025.

On September 9, 2026, Justice Ravi Cheemalapati allowed the writ petition to a limited extent. The Court directed the authorities to evaluate the L-1 and L-2 bids strictly under Clause 6.42(b)(ii).

Key takeaways for procurement practitioners:

• No fixed threshold. The Court upheld the Manual’s case-by-case approach to abnormally low bids. It rejected the argument that the tender was invalid for not prescribing a minimum price.
• But a very low price must be examined. The bid here appeared low enough to raise a material concern about the bidder’s capability to perform. In those circumstances, the Court held, the authority had to do three things before finalising L-1: seek clarification, analyse the price and reach a reasoned view.
• Timing matters. The record showed that clarification was sought only after Apollo had been declared L-1. By then, the L-2 bidder, ICOMM Tele Limited, had already been treated as the matching bidder. A later clarification could not take the place of pre-award scrutiny.
• No substitutes. Bidder undertakings, post-award quality inspection and a bidder’s financial strength cannot replace a price-specific assessment.

What the Court did not do matters as much. It did not cancel the tender or disqualify any bidder, and it made no finding that Apollo cannot perform. It also did not treat our client’s cost estimate as the correct price or grant any share of the tendered quantity. If the L-1 and L-2 bids withstand fresh scrutiny, the award and the financial approval dated January 22, 2026 will stand. If they do not, the authorities must proceed under the applicable procurement framework.

In public procurement, the lowest price is where scrutiny begins, not where it ends.

Tagore Yadav Yaragorla, Advocate, TLH, Advocates & Solicitors, appeared for the petitioner, led by P. Veera Reddy, Senior Counsel.