Mandatory Scrutiny of Bid Documents of State Executed NH Works

The Ministry of Road Transport and Highways (MoRTH) has released a circular bearing reference no. RW/BNG/NH-73/km86-99/04/2020 (Computer No. 182059) dated May 16, 2025, introducing Scrutiny by Regional Officers of Bid Documents and Legal Submissions for NH Works executed by States (the “Circular”).

The circular seeks to plug material lapses that have undermined National Highway (NH) projects undertaken through State Public Works Departments/Roads Construction Departments (PWDs/RCDs). It imposes a new regime of mandatory oversight by MoRTH’s Regional Officers (ROs) both before bid documents are floated and throughout the lifecycle of the project, including contractual disputes.

MoRTH had identified critical lapses due to the lack of due diligence in several state-executed NH projects. A recent case revealed that a miscalculation in the quantity of a key item listed in Schedule‑B was identified only after the contract was awarded in the fourth call of tenders. It resulted in contractual disputes and liabilities adversely affecting the central government. The Circular attributes such outcomes to two systemic gaps:

1. Absence of RO scrutiny during bid preparation; and
2. Mechanical defence during contractual disputes without adequately safeguarding the interests of the central government.

Key Provisions of the Circular

1. Pre-Bid Scrutiny by Regional Officers: To address technical and procedural gaps at the outset, the circular mandates that all NH project bid documents must be reviewed by the concerned RO before being issued. This applies to:
   1. All new NH works, regardless of the estimated cost (except for routine maintenance).
   2. Documents, including quantities, schedules, technical specifications, and contractual terms.
   3. ROs must communicate any deficiencies to the concerned state agency, which is required to make corrections before initiating the tendering process.
2. Compulsory RO Involvement in Disputes:

1. 1. State PWDs/RCDs shall not independently pursue arbitration or court proceedings without consultation with the respective RO.
   2. All legal submissions, including replies and statements of defence, written submissions intended for the courts and/or arbitrations, shall be vetted by the RO within 15 days. RO shall submit his reply with comments or amendments. If no response is issued within this period, the documents will be deemed approved and cleared.
   3. Submissions must reflect MoRTH policy and protect Central Government interests.
   4. ROs may engage legal counsel from NHAI-empanelled law firms for advice and support, funding the cost from contingencies of ongoing NH works.
   5. ROs are expected to:
      1. Track hearings and maintain a record of all disputes, claims, arbitration cases, and court proceedings.
      2. Provide periodic updates to MoRTH.
      3. Refer any matter requiring Ministry guidance to the Zonal Head, with MoRTH committing to reply within 7 days.

Standard Operating Procedure (SOP) under Preparation: To streamline arbitration and dispute resolution processes, MoRTH is preparing a detailed Standard Operating Procedure (SOP), which will be issued separately. The SOP aims to standardize legal practices across all state-executed NH projects.

MoRTH has emphasized that strict compliance with these directives is mandatory. RO must ensure continuous engagement with state agencies, and any failure to adhere to the circular will be viewed seriously, with potential disciplinary consequences.

Implications for Stakeholders: This directive marks a critical shift toward greater accountability and legal vigilance in NH infrastructure development. All stakeholders, including State PWDs, contractors, consultants, and legal teams, must align their processes with the new oversight framework. Clients engaged in NH work should be prepared for more structured bid approvals and legal documentation protocols. Early coordination with ROs will be essential to avoid project delays and mitigate legal or financial exposure.