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[2016] ZAWCHC 78
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African Civils (Pty) Ltd v Minister of Rural Development And Land Reform and Another; In re: Asla Construction (Pty) Ltd v Head of the Department of Rural Development and Reform and Another (4157/16, 5222/16) [2016] ZAWCHC 78; [2016] 3 All SA 686 (WCC) (23 June 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO: 4157/16
DATE:
23 JUNE 2016
In
the matter between:
AFRILINE
CIVILS (PTY)
LTD
..............................................................................................
Applicant
And
MINISTER
OF RURAL DEVELOPMENT & LAND
REFORM
...........................
First
Respondent
EXEO
KHOKELA CIVIL ENGINEERING
CONSTRUCTION
(PTY)
LTD
...............................................................................
Second
Respondent
CASE
NO:
5222/16
ASLA
CONSTRUCTION (PTY)
LTD
....................................................................................
Applicant
And
THE
HEAD OF THE DEPARTMENT OF RURAL
DEVELOPMENT
AND
REFORM
.............................................................................
First
Respondent
EXEO
KHOKELA CIVIL ENGINEERING
CONSTRUCTION
(PTY)
LTD
...............................................................................
Second
Respondent
Coram:
Dlodlo, J
Dates
of Hearing: 31 May 2016
Date
of Judgment: 23 June 2014
JUDGMENT
DLODLO,
J
INTRODUCTION
[1]
This matter concerns two separate urgent review applications launched
on 10 March 2016 and 31 March 2016 by two Applicants,
Afriline Civils
(Pty) Ltd (“Afriline”) and Asla Construction (Pty) Ltd
(“Asla”) respectively in terms of
which the two
Applicants seek to have the First Respondent’s decision to
award the tender under Contract No: SSC WC 36/2015
DRDR: CONSTRUCTION
OF EBENHAESER, BULK IRRIGATION REVITALISATION PROJECT, WESTERN CAPE
(“the tender”) to the Second
Respondent, Exeo Khokela
Civil Engineering Construction (Pty) Ltd (“Exeo”)
reviewed and set aside. Afriline and Asla
seek an order reviewing and
setting aside, alternatively declaring invalid any agreement
concluded between the first Respondent
and Exeo in respect of the
implementation of the tender.
[2]
On 18 March 2016, an order was granted by agreement between Afriline
and the First Respondent that an interdict be issued to
the effect
that, pending the hearing of the review applications, the first
Respondent be interdicted and restrained (a) from taking
any steps to
implement the tender, including but not limited to, concluding or
implementing any agreement in respect of the Tender
with Exeo; and
(b) from handing over control of the site on which construction is to
commence in terms of the Tender to Exeo or
any other party. Asla and
the First Respondent similarly agreed on 8 April 2016 to an interim
interdictory order pending the final
determination of a review
application. Both review applications have been enrolled for hearing
before me which hearing took place
on 31 May 2016. The review
applications have been consolidated pursuant to Asla having applied
to have its application consolidated
with that of Afriline.
FACTUAL
BACKGROUND
[3]
In its Tender and Invitation to Tender, the Cape Town Office of the
Department of Rural Development and Land Reform (“the
Department”), invited tenders for the construction of the
Ebenhaeser Bulk Irrigation Revitalisation Project, Western Cape
under
Tender No: SSC WC 36/2015 DRDLR (“The Project”). The
initial closing date of 12 October 2015 for the submission
of tenders
was subsequently extended to 23 October 2015. It is of cardinal
importance that I mention that the Tender Notice,
inter alia
,
sets out the following eligibility (mandatory) requirements: (a) that
tenderers should have a CIDB contractor grading of 8CE and
that
preference would be offered to tenderers who have a CIDB grading of
8CE or higher; (b) that only tenderers who attended a
compulsory
briefing session (with written confirmation of attendance at the
compulsory site clarification meeting – Form
D in the lender
document) as well as compliance with other requirements would be
eligible to submit tenders; (c) that a compulsory
clarification
meeting with representatives of the Department would take place at
Elsenburg, Muldersvlei Road, Stellenbosch, Western
Cape on 1 October
2015. The papers show that representatives of both Afriline and Asla
attended the site meeting where the Department’s
Senior Supply
Chain Practitioner, one Mr. Muthabo emphasised certain aspects
relating to the Tender. It must be mentioned as well
that Mr. Muthabo
serves as part of the Secretariat of the Bid Specification and
Evaluation Committee and the Provincial Bid Adjudication
Committee.
According to the minutes of the site meeting (serving as Annexure
“A10” to Afriline’s Supplementary
founding
affidavit) which were forwarded to all prospective tenderers who
attended the meeting, certain salient aspects as recorded
in the
minutes of the site meeting were emphasised by Mr. Muthabo. These
included but were not limited to the following:
“
(a)
The lead partner must have a Contractor grading designation in the
8CE of construction work; and
(b)
Submission of an Original Valid Tax Clearance Certificate is
compulsory.
Bidders
should note, that in accordance with legislation, no contract may be
rewarded to a/an person/entity who has failed to submit
an Original
Valid Tax Clearance Certificate from the South African Revenue
Service (SARS), certifying that the taxes of that person/entity
are
in order or that suitable arrangements have been made with SARS. In
bids where a consortia/Joint Venture/Sub-Contractors are
involved
each party must submit a separate Original Valid Tax Clearance
Certificate.”
[4]
It is common cause that on the closing date (23 October 2016)
Afriline, Asla and Exeo as well as the two other tenderers, (King
Civil Engineering Contractors (Pty) Ltd and CSV Construction (Pty)
Ltd) submitted their tenders on the tender documents prescribed
by
the Department. The tender documents (these are fairly standard) are
indeed voluminous and understandably have not been annexed
to the
Affidavits filed by the parties. These tender documents have been
made available as part of the Rule 53 record process.
The Department
has (thankfully) annexed the Tender Data, the Returnable Documents
and Form A (Schedule of Proposed Sub-Contractors)
which seemingly are
particularly relevant to these review proceedings.
[5]
It must be mentioned particularly that relevant to the present
applications are the Tender Data, the Returnable Documents and
Form A
(Schedule of Proposed Sub-Contractors) as well as the minute of the
site meeting. I hasten to add that these documents certainly
augment
and stress compliance with two key eligibility (mandatory)
requirements. The Tender Date (Annexure “C”)
for
instance, provides expressly for an addition or variation to clause
F.2.1 of the Standard Conditions of Tender as follows:
“
Only
those Tenderers who are registered with the CIDB, in a contractor
grading designation equal to or higher than a contractor
grading
designation determined in accordance with the sum for a 8CE of
construction work, are eligible to submit tenders.”
[6]
In Annexure “D” (the Returnable Documents) the following
was stated as part of the list of Returnable Documents:
“
THE
TENDERER MUST SUBMIT THE FOLLOWING DOCUMENTS WITH THIS TENDER. IF THE
DOCUMENTS ARE NOT INCLUDED, THE DEPARTMENT WILL NOT CONSIDER
THIS
TENDER.”
Noticeably,
in the Returnable Documents (serving as Annexure “D” in
these proceedings) the quote set out above is in
bold print and in
capital letters. I suppose this is so in order to ensure that the
tenderers do not fail to read and apprehend
same.
[7]
The list of Returnable Documents deals specifically,
inter alia
,
with tax certificates as referred to in clause 2.25 of the Standard
Conditions of Tender and it states the following:
“
An
Original, Valid Tax Clearance Certificate.
See
Item T2.2.14 For N page T2.1.21
In
Bids where Consortia/Joint Venture/Sub-Contractors are involved each
party must submit a separate Original Valid Tax Clearance
Certificate.”
As
regards one of the Returnable Schedules, ie. Form A: Schedule of
Proposed Sun-Contractors in which the tenderer should indicate
the
sub-contractors it intends to utilise in the performance of the work
for the Project (Annexure “E”) pertinently
drew the
attention of tenderers to the following:
“
NB:
Sub-contractors Tax Clearance Certificate must be submitted with
tender documents for consideration”).
Afriline
indicated in its Form A: Schedule of Proposed Subcontractors
(Annexure “E”) that it would use TT Innovations
as well
as its Joetsie and HidroTech as sub-contractors. Asla indicated it
would use Engineering Lining, Hidro-Tech Systems (Pty)
Ltd and TT
Innovations as its sub-contractors. It is certainly common cause that
the submission of original and valid Tax Clearance
Certificates in
respect of sub-contractors was a mandatory requirement. It is further
common cause that the failure to submit such
Tax Clearance
Certificate would result in the tender being regarded as
non-responsive. It actually means that the tender would
be rejected
solely on that basis and that the tender would not be considered at
all. Notwithstanding Afriline’s knowledge
that its tender could
be rejected for failing to comply with the mandatory requirement of
the submission of Tax Clearance Certificates,
it nevertheless failed
to submit a Tax Clearance Certificate for TT Innovations. But the
same Afriline submitted Tax Clearance
Certificates for Joetsie and
Hidro-Tech Systems (Pty) Ltd and an entity known as Martin & East
(Pty) Ltd.
Asla,
similarly, with the knowledge of this mandatory requirement relating
to Tax Clearance Certificates for subcontractors –did
not
submit a Tax Clearance Certificate for TT Innovations, nor for
Engineering Lining and Hidro-Tech Systems (Pty) Ltd. I must
mention
that Asla submitted Tax Clearance Certificates for Martin & East
(Pty) Ltd, PSV Industrial (Pty) Ltd and Hidro-Tech
Systems (Pty) Ltd.
Exeo submitted Tax Clearance Certificates for Martin & East (Pty)
Ltd and Hidro-Tech Systems (Pty) Ltd.
It did not submit a Tax
Clearance Certificate for TT Innovations/ king Civil and PSV
Construction also did not comply with the
mandatory requirement
relating to the submission of Tax Clearance Certificates for
sub-contractors.
[8]
In the evaluation of the tenders on 2 December 2015, the Bid
Evaluation Committee recommended that the tender be cancelled due
to
all five tenderers’ non-compliance with the mandatory
requirement relating to Tax Clearance Certificates. The Provincial
Bid Adjudicating Committee in assessing the tenders on 7 December
2015 similarly concluded that all five tenders were non-responsive
due to non-compliance with the Tax Clearance Certificate requirement.
Mr. Muthabo drafted a memorandum serving as Annexure “A14”
to Afriline Supplementary founding affidavit and this memorandum drew
attention to the fact that the tenderers had not submitted
and/or
attached original and valid Tax Clearance Certificates for their
subcontractors. The memorandum recommended that approval
be granted
to request original and Valid Tax Clearance Certificates from
tenderers. On 15 December 2015, it was authorised that
such Tax
Clearance Certificates could be obtained from the tenderers.
[9]
On 18 December 2015 Mr. Muthabo addressed correspondence to all
tenderers (Exeo, Afriline, Asla, King Civil and CSV Construction)
in
which he requested them to submit Tax Clearance Certificates in
respect of the sub-contractors listed by them in their tender
documents. The letters serving as Annexure “F” and
Annexure “G” in these proceedings were addressed to
Afriline and Asla respectively. Similar letters were addressed to the
other tenderers. These letters pertinently drew to the tenderers’
attention that:
“
6.
Failure to submit the abovementioned documents will invalidate the
tender”.
It
is therefore clear that all the tenderers were afforded an
opportunity to submit Tax Clearance Certificates for the
sub-contractors
which they intended to use in the performance of the
work and as indicated in their tender documents. Annexure “H”
is an e-mail dated 18 December 2015. Afriline attached Tax Clearance
Certificates (as mentioned before) for Joetsie and Hidro-Tech
Systems
(Pty) Ltd. It, however, failed to submit a Tax Clearance Certificate
for TT Innovations. Instead Afriline attached a letter
dated 18
December 2015 (serving as Annexure “H” in these
proceedings) in which it indicated that TT Innovations is
a division
of Martin & East (Pty) Ltd and “
not
a legal entity in its own right.”
The letter stated that Afriline submitted a Tax Clearance Certificate
for Martin & East (Pty) Ltd. Similarly, in an e-mail
dated 15
January 2016 (Annexure “1”) Asla attached Tax Clearance
Certificate for itself, Martin & East (Pty) Ltd
and PSV
Industrial. It also did not submit a Tax Clearance Certificate for TT
Innovations. Asla, however, attached a letter by
TT Innovations to
Asla dated 14 January 2016 wherein it indicated that TT Innovations
is a division of Martin & East (Pty)
Ltd. Exeo attached Tax
Clearance Certificate for TT Innovations and Hidro-Tech Systems (Pty)
Ltd serving as Annexure “J”
in these proceedings.
[10]
In a letter dated 18 December 2015 (Annexure “K”) the
Department requested the tenderers consent to extend the
tender
validity period (which would have expired on 22 January 2015) by two
months to 22 March 2016. A similar letter was addressed
to the other
tenderers. All five tenderers consented to the said extension. In
view of the fact that the tender exceeded the amount
of R5 million,
it had to be considered and awarded by the National Bid Adjudication
Committee of the Department and would be subject
to evaluation by the
Bid Evaluation Committee and thereafter recommended by the Provincial
Bid Adjudication Committee. In evaluating
the five tenders (gathered
from re-evaluation report Annexure “A20”) the Bid
Evaluation Committee held that only two
tenders were deemed
responsive (and these were Exeo and King Civil Engineering), and that
they had met the mandatory requirements.
Afriline’s tender was
considered to be non-responsive on the basis that: it did not submit
a Tax Clearance Certificate for
the proposed sub-contractor (TT
Innovations) and that its CIDB grading had expired on 15 January
2016. Asla’s tender was
similarly deemed to be non-responsive
on the basis that it had failed to submit a Tax Clearance Certificate
for its proposed sub-contractor,
TT Innovations.
[11]
On 18 February 2016 the Bid Evaluation Committee reconvened and
resolved to consider and accept Afriline’s and Asla’s
tenders despite both of them not having submitted a Tax Clearance
Certificate for TT Innovations. In so doing, the Committee had
regard
to their tenders which indicated that TT Innovations is a division of
Martin & East (Pty) Ltd. On 19 February 2016 the
Provincial Bid
Adjudicating Committee, however, resolved (See Annexure “A20”)
that Afriline’s and Asla’s
tenders be referred back to
the Bid Evaluation Committee for re-evaluation since “
it
not agree with the inclusion of both Afriline Civil (Pty) Ltd
Construction (Pty) Ltd whereas they failed to submit TCC
for their
sub-contractors.”
[12]
On 22 February 2016 the Bid Evaluation Committee reconvened and
re-evaluated Afriline’s and Asla’s tenders. It
reversed
its earlier view to qualify both Afriline and Asla-and decided to
disqualify them on the basis that they failed to comply
with the
mandatory requirement relating to the furnishing of a Tax Clearance
Certificate for their sub-contractor, TT Innovations.
The Bid
Evaluation Committee recommended that the tender of Exeo be accepted.
The Provincial Bid Adjudicating Committee similarly
recommended that
the tender of Exeo be accepted. The Provincial Bid Adjudicating
Committee similarly recommended that Exeo’s
tender be accepted.
[13]
On 1 March 2016 the National Bid Adjudicating Committee resolved that
Exeo’s tender be accepted and that the tender be
awarded to
Exeo. The National Bid Adjudicating Committee paid particular
attention to Afriline’s and Asla’s view that
they were
not obliged to submit a Tax Clearance Certificate for its
sub-contractor TT Innovations. It clearly had regard to the
correspondence in which it was asserted that TT Innovations was a
division of Martin & East (Pty) Ltd. The National Bid
Adjudicating
Committee concluded that the contents of the letter from
TT Innovations was not true in view of the fact that Exeo had
obtained
and furnished a Tax Clearance Certificate for TT
Innovations. The Tax Clearance certificate also demonstrated that the
South African
Revenue Service (SARS) regarded TT Innovations as a
separate legal entity. The Department and Exeo signed the contract
between
them on 7 March 2016.
THE
PROCUREMENT LAW
APPLICABLE
IN THE MATTER
[14]
It is apparent on the papers that there are essentially three issues
which underpin the review grounds set out in the two review
applications launched by Afriline and Asla against the First
Respondent. These are: (a) whether Afriline’s and Asla’s
tenders were fairly rejected by the Department as non-responsive for
failing to comply with the mandatory requirement relating
to the
furnishing of a Tax Clearance Certificate for their proposed
sub-contractor, TT Innovations; (b) whether Afriline’s
tender
was fairly rejected by the Department as non-responsive on the basis
that Afriline’s CIDB grading had lapsed on 15
January 2016
thereby resulting in Afriline’s failure to comply with the
mandatory requirement that tenderers had to be registered
with the
CIDB with a grading of 8CE or higher; and (c) whether the
Department’s award of the tender to Exeo was fair given
that
Exeo’s tender was allegedly non-compliant with the mandatory
requirement relating to the submission of its own Tax Clearance
Certificate. The above constitute a crystallisation of the issue at
play in this matter.
[15]
The procurement processes of organs of state are of course rooted in
Section 217 (1) of the Constitution Act 108 of 1996 and
the
provisions of the Preferential Procurement Policy Framework Act 5 of
2000 (the “PPPFA”) Section 217 (1) of the
Constitution
states as follows:
“
When
an organ of state in the national, provincial or local sphere of
government, or any other institution identified in national
legislation, contracts for goods or services, it must do so in
accordance with a system which is fair, equitable, transparent,
competitive and cost-effective.”
It
is trite that the award of a tender by an organ of state constitutes
administrative action under the Promotion of Administrative
Justice
Act 3 of 2000 (“PAJA”). Therefore in terms of Section 3
(2) (a) of PAJA, the tender process must be lawful,
procedurally fair
and justifiable.
[16]
Perhaps it falls to be mentioned that in relation to the legally
binding and enforceable framework within which a tender ought
to be
submitted, evaluated and awarded, the Constitutional Court in
All
Pay Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency, and
Others
2014 (1) SA 604
(CC) at 619G-620B; para [40] expressed itself as
follows:
“
Compliance
with the requirements for a valid tender process, issued in
accordance with the constitutional and legislative procurement
framework is thus legally required. These requirements are not merely
internal prescripts that SASSA may disregard at whim. To
hold
otherwise would undermine the demands of equal treatment,
transparency and efficiency under the Constitution. Once a particular
administrative process is prescribed by law, it is subject to the
norms of procedural fairness codified in PAJA. Deviations from
the
procedure will be assessed in terms of those norms of procedural
fairness. But it does not mean that, where administrators
depart from
procedures, the basis for doing so will have to be reasonable and
justifiable, and the process of change must be procedurally
fair.”
An
established legal principle is that non-compliance with
specifications, prescripts, requirements or conditions included in a
tender document would render a tender unacceptable or non-responsive
and liable to disqualification from the further tender process.
[17]
If unacceptable or non-responsive tender or tenders were to be
further considered despite failing to comply with and/or conform
to
mandatory requirements, then certainly the consequences would be that
the tender process as a whole is not transparent as required
by the
provisions of the PPPFA and Section 217 (1) of the Constitution
quoted
supra
.
Talking to this aspect the Court in
Loghdey
and Others v City of Cape Town and Others
;
Advanced Parking Solutions CC and
Another v City of Cape Town and Others
2010
(6) BCLR 591
(WCC) at 607 A-B para [48] the Court made the following
observation:
“
Furthermore,
by proceeding to score the tenders on the basis of allowing the SPS
tender to be treated as if it had tendered a different
device, the
evaluation committee scored a tender that was not “acceptable”
within the meaning of the PPFA. In my view,
the further consideration
of a tender that was manifestly non-compliant with a material
requirement of the RFP stripped the process
of one of the essential
characteristics of the public procurement process: transparency.”
I
am in full agreement with the above observation. This of course
accords with the transparency that must always permeate the tender
process. It remains of cardinal importance to mention that for a
tender to be deemed acceptable or responsive it must, in accordance
with the provisions of Section 1 (i) of the PPPFA in all respects
comply with the specifications and conditions of the tender as
set
out in the tender document.
[18]
In
Westinghouse Electric Belgium SA v Eskom Holdings (Soc) Ltd and
Another
2016 (3) SA 1
(SCA) at 12F-H para [39], the Supreme Court
of Appeal provided a deserved guidance in this regard when it stated
that for the tender
process to be lawful there had to be proper
compliance with it and that “
a tender should speak for
itself.”
Fairness should permeate the tender process and
particularly so in respect of the procedure adopted for awarding or
refusing tenders
to the tenderers. See in this regard
Tetra Mobile
Radio (Pty) Ltd v MEC, Department of Works and Others
2008 (1) SA
438
(SCA) at 443B-C para [9]. Conradie JA writing for the Supreme
Court of Appeal in
Metro Projects CC and Another v Klerksdorp
Municipality and Others
2004 (1) SA 16
(SCA) at 21D –E para
[13] sufficiently, in my view, elaborated on the duty to act fairly
as follows:
“
Fairness
must be decided on the circumstances of each case. It may in given
circumstances be fair to ask a tenderer to explain an
ambiguity in
its tender; it may be fair to allow a tenderer to correct an obvious
mistake; it may, particularly in a complex tender,
be fair to ask for
clarification or details required for its proper evaluation. Whatever
is done may not cause the process to lose
the attribute of fairness
or, in the local government sphere, the attributes of transparency,
competitiveness and cost-effectiveness.”
[20]
It must be noted that in
Metro Projects
CC
supra
in considering whether the tender process followed was fair, the
Supreme Court of Appeal delved into the circumstances as follows:
“
A
high-ranking municipal official purported to give the ninth
respondent an opportunity of augmenting its tender so that its offer
might have a better chance of acceptance by the decision-making body.
The augmented offer was at first concealed from and then
represented
to the mayoral committee as having been the tender offer. It was
accepted on that basis. The deception stripped the
tender process of
an essential element of fairness: the equal evaluation of tenders.
Where subterfuge and deceit subvert the essence
of a tender process,
participation in it is prejudicial to every one of the competing
tenderers whether it stood a chance of winning
the tender or not.”
Similarly, this
Court
in Loghdey
supra
warned as follows:
“
The
offer by SPS that was eventually accepted by the City was not the one
made in SPS’s tender…In my view the process
went awry in
this respect when, instead of excluding the SPS tender from
consideration when it became apparent from the independent
technical
expert’s report of July 2007 that the tender did not comply
with the stated technical specifications, the City
instead engaged in
a so-called clarification process. In the course of the process, SPS
was permitted (if not encouraged) to offer
to provide something
materially different from that which had been offered in its tender
and thereby, quite irregularly, given
a second opportunity.”
[21]
An important issue of whether a tenderer’s non-compliance with
a mandatory requirement could be condoned by an administrative
authority was laid to rest by the Supreme Court of Appeal when it
held in
Dr. JS Moroka Municipality v
Bertram (Pty) Ltd
[2014] 1 ALL SA 545
(SCA) at 551g-552a paras [16] and [17] that such non-compliance can
only be condoned if the tender documents conferred a discretion
on
the administrative authority to condone such non-compliance with a
mandatory requirement. The same principle was of course more
broadly
stated by the Supreme Court of Appeal (per Brand JA) in
Minister
of Environmental Affairs and Tourism and Others v Pepper Bay Fishing
(Pty) Ltd; Minister of Environmental Affairs and Others
v Smith
2004 (1) SA 308
(SCA) at para [31] as follows:
“
As
a general principle an administrative authority has no inherent power
to condone failure to comply with a peremptory requirement.
It only
has such power if it has been afforded the discretion to do so…The
Chief Director derives all his (delegated) powers
and authority from
the enactment constituted by the general notice. If the general
notice therefore affords him no discretion,
he has none. The question
whether he had a discretion is therefore entirely dependent on a
proper construction of the general notice.”
In
the matter under discussion I accept that the issue of condonation
hardly arises. The tender documents and the process do not,
seemingly, permit condonation of a tenderer’s non-compliance.
The common cause is that the requirements relating to the Tax
Clearance Certificates and the CIDB registration remain mandatory
requirements and therefore non-compliance therewith would translate
to the invalidity of the tender or tenders.
CONSIDERATION OF
THE GROUNDS
OF REVIEW AND THE
APPLICATION
OF RELEVANT LEGAL
PRINCIPLES
[22]
On behalf of the Department two applications to strike out were
moved. These applications are based on what the Department
regards as
new matters surfacing for the first time in reply by the Applicants.
It suffices to mention that the rule against new
matters in reply is
not cast in stone ie it is not absolute and should be applied with a
fair measure of common cause. Paragraph
18 of Mr. Fortuin’s
replying affidavit elaborates on the contents of annexure “
A16”
which has always been part of the record. The fact is that whether a
matter raised in reply constitutes a new matter is something
to be
determined on the facts of each individual case. There is a
distinction between the case in which the material is first brought
to light by the Applicant who knew about it at the time of the filing
of affidavit and facts alleged in Respondent’s answering
affidavit or possible existence of further ground for relief sought
by the Applicant. Of course in the latter type of case the
Court
would more readily allow an Applicant in his replying affidavit to
utilise and enlarge upon what has been revealed by the
Respondent and
to set up such additional ground for relief as might arise therefrom.
See eg.
Investments (Pty) Ltd v Town Council of the Borough of
Stanger
1976 (2) SA 701
(T). Even if certain averments could have
been made in the founding affidavit (on its own) that is no basis for
excluding it from
consideration at times. A common-sense approach
based essentially on the want of prejudice may preclude the excluding
of such averments
from being considered. See in this regard,
EBotswana (Pty) Ltd v Sentech (Pty) Ltd and Others
2013 (6) SA
327
(GSJ). See also
Smith v Kwanonqubela Town Council
1999 (4)
SA 947
(SCA) para [15] where it was noted
(inter alia)
that
the rule against new matters in reply is not absolute and should be
applied with a fair measure of common sense. These so-called
“new
matters” have already been dealt with by the Department. I
would thus refuse the striking out application and
rather focus my
attention on the merits of the matter before me. Mr. De Waal
painstakingly pointed out that the Department’s
decision to
award the bid to Exeo suffers from the reviewable irregularities in
that (in his contention) (a) Exeo’s bid should
not have been
accepted in the absence of its original Tax Clearance Certificate;
(b) the Department should have realised that TT
Innovations (Pty) Ltd
was not the nominated sub-contractor for Afriline; Asla and Exeo
because as from 1 September 2014 it operates
as a division of Martin
& East (Pty) Ltd; (c) the approach followed in respect of the
validity of CIDB registration and other
certificates was not
consistently applied; and (d) Afriline could not have been excluded
on the basis that its CIDB registration
expired on 15 January 2016.
In Mr. De Waal’s submission what the Departmental Committees
were required to do is an “
intelligently evaluative
approach”
. See
Loliwe CC t/a Vusumzi Environmental
Services v City of Cape Town and Others
(case number 3791/2012
[2012] ZAWCHC 162
(6 July 2012) at para 35 and 42. In Mr. De Waal’s
view anyone applying such an approach would have either (a) accepted
the
detailed explanation given in the 14 January letter; or (b) have
made further enquiries.
[23]
According to Mr. De Waal a reviewable material error of fact was made
in the instant matter. In his view the error of fact
he relies on is
of the kind that is uncontentious and objectively verifiable and may
accordingly be relied upon in these review
proceedings. Mr. De Waal
in supporting his assertion in this regard referred the Court to
Dumani v Nair
and Another
2013 (2) SA 274
(SCA) para 26ff;
Minister
of Home Affairs and Others v Somali Association of South Africa
and Another
2015 (3) SA 545
(SCA) para 25. In
Dumani
case
supra
the Supreme Court of Appeal stated the following:
“
[26]
The Appellant’s attorney submitted that the presiding officer
at the inquiry into the Appellant’s misconduct
committed a
material misdirection of fact that entitled the High Court and
entitles this Court to ‘review the convictions
and consider the
matter afresh’ in terms of the decision in Pepcor Retirement
Fund and Another Financial Services Board and
Another 2003 (6) SA38
(SCA) ([2003]
3 ALL SA 21).
The argument requires a consideration of
the parameters of material error of fact as a ground of review……….”
.
It
is also of importance that I set out infra the reasoning of the
Supreme Court of Appeal (per Ponnan JA) in
Minister
of Home Affairs v Somali Association of SA
supra
.
This reasoning is contained in paragraph [25] of the judgment. The
relevant part thereof reads as follows:
“
[25]
When the decision to close the PERRO was taken, it was in the belief
that the Lebombo RRO would be operational in April
2012. In that, the
relevant authorities were overly optimistic. Mr. Apleni now states
(in his answering affidavit in response to
the respondents’
application to adduce new evidence):
If
the Lebombo RRO is set up by February next year (………..)
it would mean that Mr. Apleni’s initial estimation
was off by
approximately four years. …………………………………………………………………......
Implicit
in that must be an acceptance that Mr. Apleni believed that the
establishment of the Lembombo RRO, which was inextricably
linked to
the closure of the PERRO, would satisfy our obligations to asylum
seekers as required by the Act and Constitution. That
being so, it
can hardly be imagined that the decision to close the PERRO would
have been taken by Mr. Apleni when he did, had he
known then that the
Lebombo RRO would only be operational at the earliest in February
2016. It must follow that the DG’s
decision to close the PERRO
had been made in ignorance of the true facts material to that
decision (See Pepcor Retirement Fund
and Another v Financial Services
Board and Another
2003 (6) SA 38
(SCA) ([2003]
3 ALL SA 21
;
[2003]
ZASCA 56)
paras 47 and 48; Dumani v Nair and Another
2013 (2) SA 274
(SCA) para 32).”
[24]
In Mr. De Waal’s contention the award was influenced by a
material error and that therefore in terms of the
Promotion of
Administrative Justice Act 3 of 2000
(“PAJA”) the error
was because irrelevant considerations were taken into account or
relevant considerations were not
considered
(Section 6
(2) (e) (iii))
or that it was not rationally connected to the information before the
administrator
(Section 6
(2) (f) (ii) (cc)). Mr. De Waal took time in
explaining that the perusal of the record ie
(Rule 53
record) made it
clear that the Department did not generally assess whether CIDB
registrations or other certificates such as Tax
Clearance
Certificates were valid for the entire evaluation period. I deal with
these issues comprehensively later in this judgment.
One of course
must have regard to cases such as
Jicama 17 (Pty) Ltd v West Coast
District Municipality
2006 (1) SA 116
(C) in which the Court
found
inter alia
that new reasons which are put forward for
the first time in answering papers cannot answer a review
application. The Court cited
with approval dictums in
R v
Westminister City Council, Ex Parte Erinakov
[1996] 2 ALL ER 302
(CA) at 315h -316d where it was held that allowing new reasons to be
presented would lead to “
a sloppy approach by the
decision-maker”, and would in many cases give rise to the new
reasons were “in fact second
thoughts designed to remedy an
otherwise fatal error exposed by the judicial review proceedings”.
I accept that unequal treatment of bidders is indeed inimical to the
fairness of the tender process. The authority of the latter
statement
is indeed
inter alia
All Pay Consolidated v Chief Executive
Officer, SASSA
2014 (1) SA 604
(CC) paras 39 -40.
[25]
Mr. De Waal relying on
Nucon Roads and
Civils (Pty) Ltd v MEC For Department of Public Works, Roads and
Transport: N.W. Province and Others
(M71/14)
[2014] ZANWHC 19
(8 August 2014) contended that Afriline’s
principle submission is that the validity of its CIDB grading must be
determined
with reference to the position at closing day of the
tender. He went so far as to contend that a bidder may even obtain a
higher
CIDB garding post-closing day and hence may become eligible
for an award for which it did not qualify at closing day. He referred
in this regard to
Icon Construction
(Pty) Ltd v Dihlabeng Local Municipality and Others
(A90/2015)
[2015] ZAFSHC 205
(10 September 2015 where the Court held
inter alia
that:
“
I
agree with tile submissions of Icon and Esor that the interpretation
of and reliance placed by the Municipality on
Regulation 25(1A)
of
the Regulations to the
Construction Industry Development Board Act 38
of 2000
, is incorrect. If the words in
Regulation 25(1A)
“...but
who is capable of being so registered prior to the evaluation of
those submissions may be evaluated ...” were
intended to mean
that documentation to supplement a bid can be filed at any time up to
the date that the bids are physically assessed,
it would not only
make a mockery of the closing date for submissions, but would lead to
an untenable situation that those who did
not qualify at the closing
date, and only later did so, would be unduly preferred, to the
prejudice and detriment of other bidders
who met all requirements at
the closing date.”
I
hasten to point out that the above quoted portion of the Free State
bench does not (in my view) provide support to the contention
advanced by Mr. De Waal in this regard. I undertake to deal with the
relevant provisions of the Construction Industry Development
Board 38
of 2000 later in this judgment.
[26]
Similarly, Mr. Schreuder contended that the Department’s
conclusion that the letter of Martin & East (Pty) Ltd to
the
effect that TT Innovations (Pty) Ltd was a division of it is untrue,
is cynical and irrational. In Mr. Schreuder’s view
there was no
logical and rational basis for the rejection of this information
which had been placed before the Department. Relying
on
Chairman,
State Tender Board v Digital Voice Processing (Pty) Ltd; Chairman,
State Tender Board v Sneller Digital (Pty) Ltd and
Others
2012
(2) SA 16
(SCA) he contended that the decision to reject this
information was irrational and no rational basis existed for the
Department’s
conclusion. In the
Chairman, State Tender Board
case
supra
the Court talking to the requirement of
rationality described same as follows:
“
[40]
In order to be rational, the decision must be ‘based on
accurate findings of fact and a correct application of
the law’.
That being so, no rational basis existed for the STB’S
conclusions. The administrative action that it took
was not
rationally connected to the information before it as required by
Section 6
(2) (f) (ii) (cc) of the PAJA”.
Mr.
Schreuder submitted that the Department could easily have determined
the correct position by way of an enquiry into the public
records of
the Registrar of Companies or by way of enquiry with the
sub-contractor concerned. He referred me to
Aurecon
South Africa (Pty) Ltd v Cape Town City
2016 (2) SA 199
(SCA) para [43] at 218 where the following appears:
“……
.
Legal validity is concerned not only with technical, but also with
substantial correctness, which should not always be sacrified
for
form. I do not understand AllPay to overturn this principle.
There the court pointed out – “Once a
particular
administrative process is prescribed by law, it is subject to the
norms of procedural fairness codified by PAJA.
Deviations from
the procedure will be assessed in terms of those norms of procedural
fairness. That does not mean that administrators
may never
depart from the system put in place or that deviations will
necessarily result in procedural fairness, but it does mean
that,
where administrator depart from procedures, the basis for doing so
will have to be reasonable and justifiable, and the process
of change
must be procedurally fair. (para [40])”
Mr.
Schreuder was correctly concerned that the Bid Evaluation Committee
on the insistence of the Provincial Bid Evaluation Committee
changed
its earlier finding and recommendation that the tenders of Asla and
Afriline were responsive.
[27]
On Mr. Schreuder’s contention the Bid Evaluation Committee’s
action of changing its finding and recommendation
were unauthorised
(Section 6
(2) (a) (ii) of PAJA), procedurally unfair
(Section 6
(2)
(c) of PAJA), was a result of irrelevant considerations being taken
into account or relevant considerations not being considered
(Section
6
(2) (e) (iii) of PAJA) or as a result of the Bid Evaluation
Committee’s action itself not being rationally connected to the
purpose for which it was taken, the purpose of the empowering
provision or the information before the Bid Evaluation Committee
(Section 6
(2) (f) (ii) of PAJA). Mr. Schreuder was so critical of
the handling of the tenders by the Bid Evaluation Committee such that
he
contended that the statutory process that it followed forms part
of what was referred to as the “
means”
in
Albutt v Centre for the Study of
Violence and Reconciliation and Others
2010 (3) SA 293
(CC) para [51]. In the latter paragraph the
Constitutional Court held, inter alia, the following:
“…
..
but, where the decision is challenged on the grounds of rationality,
Courts are obliged to examine the means selected to determine
whether
they are rationally related to the objective sought to be achieved.
What must be stressed is that the purpose of
the enquiry is to
determine not whether there are other means that could have been
used, but whether the means selected are rationally
related to the
objective sought to be achieved. And, if, objectively speaking,
they are not, they fall short of the standard
demanded by the
Constitution.”
I
am in full agreement with the sentiments postulated above by the
Constitutional Court. Indeed rationality involves both substantive
and procedural issues and is thus both the process by which the
decision is made and the decision itself must be rationality related.
See
DA v President of the Republic of
South Africa
2013 (1) SA 248
(CC).
[28]
It is of importance that I agree that in review proceedings such as
these the inquiry regarding which documents were before
the
decision-maker at the time that the decision was taken is actually
confined to Rule 53 record. The purpose of the record is
to enable
the Applicant and the Court to fully assess the lawfulness of the
decision-making process. See for instance
Cape Town City v South
African National Road Authority and Others
2015 (3) SA 386
(SCA)
in para [36] where the Supreme Court of Appeal stated, inter alia,
“
when an Applicant in review proceedings files its
supplementary affidavit, after having had sight of the record, it is
in effect
fully stating its case for the first time. …”
Indeed the Applicant filed their supplementary affidavits herein and
these contain more details than contained in the original
founding
affidavits. This is because they had had sight of the Rule 53 record.
The original Rule 53 record not having found its
way to the judge
seized with the matter for reasons beyond my comprehension, I derived
assistance from Rule 53 record (copy) handed
over by Mr. De Waal. In
Mr. Schreuder’s submission the Department should have accepted
(at the very least) that Asla substantially
complied with the
requirement to submit a Tax Clearance Certificate in respect of its
sub-contractor. As pointed out above the
Bid Evaluation Committee on
the insistence of the Provincial Bid Evaluation Committee changed its
earlier finding and recommendation
that the tenders of Asla and
Afriline were responsible. Mr. Schreuder (just like Mr. De Waal) was
extremely concerned about the
changed decision.
[29]
It is common cause that the review grounds advanced by both
Applicants (ie Afriline and Asla) are similar. The award of tender
to
Exeo is criticised on the basis that the Applicants contend that it
did not submit an Original Tax Clearance Certificate as
part of its
tender. This assertion arose from what the consultants for the
Project (Element Consulting Engineering) stated in their
Tender
Evaluation Report. They stated that “
due
to the printing quality”
Exeo’s
Tax Clearance Certificate “does not seem to be an original”.
It would appear that both Afriline and Asla
then seek to draw from
Element’s abovementioned statement that Exeo must have
submitted a copy of its Tax Clearance Certificate.
It is common cause
that Exeo is not the author of this Tax Clearance Certificate. The
author is SARS. In the Answering Affidavit
filed on behalf of the
First Respondent and deposed to by Mr. Motsoenek the Chief Director:
Supply Chain and Facilities Management
Services in the Department of
Rural Development and Land Reform the following important
clarification in this regard appears:
“
120.2
The consulting engineers therefore did not express a definitive view
on this issue. In any event, during the evaluation and
adjudication
process conducted by the Bid Evaluation Committee, the Provincial Bid
Adjudication Committee and the National Adjudication
Committee, it
was indeed found that Exeo had submitted an Original Tax Clearance
Certificate in respect of itself”.
I
am not certain, in any event, how much reliance this Court needs to
place on the unsigned report of Element in which a view is
expressed
that Exeo’s Tax Clearance Certificate appears to be a copy
instead of an original. This was not at all a categorical
finding by
Element in respect of the Tax Clearance Certificate of Exeo. This was
merely an expression of reservation based on the
appearance of the
Certificate. As Mr. Charles Cook of Exeo explained in the Answering
Affidavit filed on behalf of the Second Respondent
(Exeo) “
the
quality of the printed tax certificates depends on the condition of
the cartridges of the printers used by SARS. From time to
time the
quality of cartridges is such that the originally printed
certificates appear to be copies.”
It would appear that reliance placed by both Afriline and Asla on the
alleged failure to submit an Original Tax Clearance Certificate
by
Exeo is indeed totally misplaced. In the first place the consultants
were appointed to assist the Department with the evaluation
of the
tenders as regards technical matters. It is not my understanding that
the consultants were tasked with conducting an evaluation
and
consideration of the tenders as to whether they were responsive or
not. Only the Bid Evaluation Committee, the Provincial Bid
Adjudication Committee and the National Bid Adjudication Committee
could make a determination whether a tenderer’s tender
was
responsive or not. Strangely this is also conceded by Afriline when
it stated that “the final evaluation and adjudication
of the
bids remain the responsibility of the Department”. This should
be a non-issue because the consultants merely expressed
their concern
with the quality of Exeo’s Tax Certificate and they did not
conclude that it was not an Original Tax Clearance
Certificate
emanating from the South African Revenue Services. There is no merit
to this ground of review at all.
[30]
As set out earlier in this judgment Afriline and Asla contend that
given the fact that their proposed and/or nominated sub-contractor,
TT Innovations (Pty) Ltd, is a sub-division of Martin and East (Pty)
Ltd, it follows that their submission of a Tax Clearance Certificate
for Martin and East (ostensibly on behalf of TT Innovations)
effectively rendered their tenders compliant with the mandatory
requirement
relating to the furnishing of a Tax Clearance Certificate
for their proposed and/or nominated sub-contractor, TT Innovations
(Pty)
Ltd. They amplified their assertion by pointing to the 14
January 2016 letter of Martin and East in which it is stated that
following
a merger between TT Innovations and Martin & East on 1
March 2014, TT Innovations had become a division of Martin &
East;
and that Martin & East would contract in all tenders
submitted after 1 September 2014 via TT Innovations (as a division of
Martin & East) and henceforth assume all legal and contractual
responsibilities, obligations and liabilities for TT Innovations.
These two Applicants (Afriline and Asla) assert that the Department
had committed material error by erroneously assuming that the
subcontracting party was TT Innovations as an independent entity when
in fact the subcontracting party was to be TT Innovations
as a
division of Martin & East.
[31]
But it remains important to point out that the allegations advanced
by and/or on behalf of Afriline and Asla as regards TT
Innovations do
not seemingly square with the facts and the documents which served
before the various committees, in particular
the National Bid
Adjudication Committee (which ultimately awarded the tender to Exeo)
In Form A: (Schedule of Proposed Subcontractors)
of the tender
document that they intended to use TT Innovations and not Martin &
East as sub-contractor. These applicants made
no reference at all to
Martin & East as their sub-contractor in their tender documents.
Indeed the only inescapable inference
to be drawn from this is that
TT Innovations was indicated as an independent entity. Accordingly,
both Afriline and Asla were required
to submit a Tax Clearance
Certificate for their proposed sub-contractor, TT Innovations, (and
thus not Martin & East) which
they did not do. Afriline and Asla
were certainly required to comply equally and fairly with the
mandatory requirements of the
tender process which were documented
earlier in this judgment. I referred
supra
to cases such as
Loghdey
;
Westinghouse
and
Metro Projects
.
These cases talk to compliance with the mandatory requirements of the
tender process.
[32]
Clearly, by submitting a Tax Clearance Certificate for Martin &
East (instead of that belonging to TT Innovations) it does
appear
that Afriline and Asla were in fact engaged in an attempt to
substitute their proposed sub-contractor (TT Innovations) with
Martin
& East. Of course the tender process does not allow such
substitution. It is important to mention that the fact that
Exeo
submitted a Tax Clearance Certificate for the same entity (TT
Innovations) demonstrates that TT Innovations is indeed an
independent entity properly in good standing with SARS and is not a
division of Martin & East. In the same Tax Clearance Certificate
TT Innovations is reflected as a separate company with its own
company registration number as well as the income tax number,
VAT/diesel
registration, UIF registration and SDC registration.
When one compares Martin & East’s and TT Innovations’
Tax Clearance Certificates one notices different registration numbers
for income tax, VAT, PAYE, UIF and SDC. Certainly these companies
are
independently registered with SARS. Another compelling indicator of
TT Innovations continued independent existence as a company
(this
despite the resolution to have same merged with Martin & East in
terms of Section 44 of the Income Tax Act) is the certificate
issued
by the Companies and Intellectual Property Commission (“CIPC”).
The latter certificate shows that TT Innovations
was still a
registered company actively in business as at 24 November 2015. It is
important to mention that the latest CIPC report
dated 29 April 2016
demonstrates as well that TT Innovations is still actively in
business. Of course it is not the contention
of Afriline and Asla
that TT Innovations is presently not in business and not trading.
They specifically proposed TT Innovations
as their sub-contractor.
They did not , for instance propose Martin & East (an entity they
now describe as the mother body)
as their sub-contractor. If for
instance they did so, on this aspect their bids would have been found
to be responsive because
it is a Tax Clearance Certificate of Martin
& East which they submitted. It is certainly not correct to
contend as Afriline
and Asla did that TT Innovations
is “not
a legal entity in its own right”.
That assertion is not at
all consistent with the contents of TT Innovations’ letter
dated 14 January 2016. The latter letter
does not state that TT
Innovations stopped trading and no longer exists.
[33]
Noticeably, the Applicants suggest that the Department should have
made further enquiries relating to their failure to submit
a Tax
Clearance Certificate for TT Innovations in view of the fact that
Exeo had submitted a Tax Clearance Certificate for TT Innovations.
What the Applicants, in my view, seemingly lose sight of is that
enquiry by the Department in this regard would have resulted in
Afriline and Asla being afforded a further opportunity to supplement
their bids by submitting a Tax Clearance Certificate for TT
Innovations. It is trite that to do so, would have tainted the tender
process with unfairness and that would certainly have constituted
a
reviewable irregularity which would have vitiated the whole tender
process. In my view the assertions that the National Bid Adjudication
Committee had committed a material error of fact lack foundation and
they are pertinently incorrect. Afriline and Asla themselves
made a
fundamental error in not submitting a Tax Clearance Certificate of an
entity they proposed would be their sub-contractor.
The fact is that
when it evaluated Afriline’s, Asla’s and Exeo’s
tenders, clearly the National Bid Adjudicating
Committee (on
objective information at its disposal) reasonably concluded that the
sub-contractor they intended to use would be
TT Innovations as
registered with SARS as a taxpayer which was in “
Good
Standing”
and which as certified
by SARS, was a taxpayer which “has complied with the
requirements as set out in Section 256 (3) of
the Tax Administration
ACT. These two Applicants actually disqualified themselves in respect
of the sub-contractor’s Tax
Clearance Certificate. It is only
convenient now for them to apportion blame to the Department.
[34]
Afriline’s other ground pertains to its CIDB grading which
lapsed on 15 January 2016 prior to the consideration and the
award of
the tender. I promised to say a few words on the
Construction
Industry Development Board Act 38 of 2000
. In terms of
Section 18
a
contractor may not undertake, carry out or complete any construction
works or portion thereof for public sector contracts, awarded
in
terms of competitive tender or quotation, unless he or she is
registered with the CIDB and holds a valid registration certificate
issued by the CIDB.
Section 20
provides that registration by the CIDB
is valid for a period of three years and that a registered contractor
must apply for renewal
of registration three months before the
existing registration expires. The CIDB is under no obligation to
approve an application
for renewal by reason of the fact that the
contractor is at that stage registered with the Board.
[35]
The registration process is regulated by the regulations promulgated
under the Act itself. The Construction Industry Development
Regulations were published under GN692 in GG26427 on 9 June 2004 in
terms of Section 33 of the Act. The 2004 Regulations make provision
for different classes of construction work. The different classes are
listed in Schedule 3 and include civil engineering works
with the
designation “CE”. The tender in the instant matter
relates to that class of construction works. Regulation
17 provides
that a contractor registered in a contractor grading designation
indicated in column 1 of Table 8 is considered to
be capable of
undertaking a contract in the range of tender values indicated in
column 2 of that table in the class of the construction
works to
which the category of registration of that contractor relates. It is
not necessary to set out Table 8
infra
.
The Project
in casu
entails civil engineering and consequently the minimum grading
required by the 2004 Regulations is 8CE. Afriline contends that
its
tender should have been considered (and the tender process should
have been concluded) prior to the expiry of its CIDB registration.
It
must be borne in mind that the closing date for the submission of
tenders was subsequently amended to Friday 23 October 2015
at 11h00.
Thus the tender submitted had to be valid for a period of 90 days
from the date of submission ie 23 October 2015 until
22 January 2016.
In paragraph 45 of the answering affidavit this issue is dealt with
and there is no apparent denial of this in
replying papers:
“
45.
The Department also addressed a letter dated 18 December 2015 to the
tenderers in which the Department requested
the tenderers to consent
that the tender validity period –which was due to expire on 22
January 2016 – be extended
as the tenderers were still under
consideration. The tenderers were requested to consent to an
extension of the validity period
by a period of two months to 22
March 2016. A similar letter was addressed to all the other
tenderers. Including Asla, Exeo and
Afriline. I attach hereto as
annexure “K”, a letter addressed to Afriline. This letter
also indicated that:
“
If
the extension of the validity period is subject to amendments in any
respect, the reasons for and the nature of the amendment
must be
clearly indicated in a letter”.”
[36]
It clearly was incumbent upon Afriline to ensure that its
registration was valid during the validity period of its tender.
But
the fact of the matter is that Afriline’s CIDB registration
expired on 15 January 2016, a date which is both before 22
January
2016 (the initial validity period) and the subsequently extended
validity period to 22 March 2016 (as requested in the
letter dated 18
December 2015 (Annexure “K”). At the risk of repeating
what I have referred to already Afriline contends
that the validity
of its CIDB grading ought to be determined with reference to the
position of the closing date for the submission
of tenders. Afriline
referred to
Section 18
(1) of the
Construction Industry Development
Board Act (referred
to
supra)
. It is apposite to set out the
relevant provisions of
Section 18
and these provide as follows:
“
18.
Unregistered Contractors
(1)
A contractor may not undertake,
carry out or complete any construction works or portion thereof for
public sector contracts, awarded
in terms of competitive tender or
quotation, unless he or she is registered with the Board and holds a
valid registration issued
by the Board.
(2)
Any contractor who carries out or
attempts to carry out any construction works or portion thereof under
a public sector contract
and who is not a registered contractor of
the Board in terms of this Act, is guilty of an offence and liable,
on conviction, to
a fine not exceeding ten percent of the value of
the contract so carried out.”
It
is of importance, however, to note that Regulation 25 (9) (a) of the
CIDB Regulations provides as follows:
“
25(9)
An employer must, before awarding a construction works contract
satisfy him or herself that the contractor
concerned-
(a)
Is registered in terms of these
regulations;”
[37]
I have pointed out in the introductory portion of a discussion
regarding the CIDB that Section 20 (2) of the Act obliged Afriline
to
apply for the renewal of its registration three months prior to its
CIDB registration expiring. In other words, in view of the
fact that
Afriline’s registration (admittedly) expired on 15 January
2016, Afriline should have applied for the renewal of
its
registration by 15 October 2015. Notably, this date is prior to the
date when Afriline submitted its tender on the closing
date of 23
October 2015. The fact is that Afriline did not apply for the renewal
of its registration before 23 October 2015. This
review ground too
lacks merit because prior to the date when the tenders were evaluated
and particularly prior to the subsequent
date of the award of the
tender (1 March 2016) Afriline’s CIDB registration was not
valid. It had lapsed on 15 January 2016.
The unfortunate fact is that
as at 1 March 2016 when the tender was awarded to Exeo, Afriline was
not registered in terms of the
CIDB Act. I am in full agreement with
the submission by Mr. Jacobs SC that the reinstatement of Afriline’s
CIDB registration
on 11 May 2016 (long after the First Respondent had
served its answering affidavit on 28 April 2016) indeed has no
bearing on the
evaluation and award of the Tender as at 1 March 2016
since the reinstatement of its registration was clearly effected
ex
post facto
the award of the Tender. I
hasten to add that the decision of the National Bid Adjudicating
Committee to reject Afriline’s
tender for want of compliance
with the mandatory requirement that tenderers had to be registered
with the CIDB with a grading of
8CE, in my view, cannot be faulted.
As far as the alleged different inconsistent treatment of tenderers
is concerned, it suffices
to merely mention that the allegation has
no foundational grounds. I say so because Asla was registered in
terms of the CIDB Act
at the time when the tender was awarded to Exeo
on 1 March 2016. Clearly Asla was not disqualified on the basis of
not being registered
in terms of the CIDB Act. I do not comprehend
the contention that Exeo should also have been excluded because its
own Tax Clearance
Certificate had expired on 8 March 2016 before the
extended tender expiry date of 22 March 2016. The point is that the
tender was
already awarded to Exeo on 1 March 2016 and this rendered
irrelevant the subsequent expiry of Exeo’s Tax Clearance
Certificate
(after 1 March 2016). I am unable to find that
irregularities occurred in the awarding of the tender to Exeo.
ORDER
[38]
In the circumstances I make the following order:
(a)
The application to strike out certain parts of replying affidavits is
dismissed with costs.
(b)
The review applications under case numbers 4157/16 and 5222/16 are
hereby dismissed.
(c)
The interim interdicts issued in respect of case numbers 4157/16 and
5222/16 on 18 March 2016 and 8 April 2016 respectively
are hereby
discharged.
(d)
The Applicants are ordered to pay the First Respondent’s costs
and such costs shall include the costs occasioned by employment
of
two counsel.
D
V Dlodlo
Judge
of the High Court