sudo returns "sorry, you are not allowed to preserve the environment" error

Issue

sudo returns sorry, you are not allowed to preserve the environment error:

1. Run sudo with -E option to preserve their existing environment variables.

   $ export MY_NAME=foobar
   $ sudo -E bash -c 'echo $MY_NAME'
   sudo: sorry, you are not allowed to preserve the environment
   

2. Below sudo rule exists for the user

   bob    ALL=(ALL)       NOPASSWD: /usr/bin/bash *