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[2013] ZAGPJHC 301
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Red Ant (Pty) Ltd v Mogale City Municipality and Others (16813/2012) [2013] ZAGPJHC 301 (22 March 2013)
REPUBLIC
OF SOUTH AFRICA
SOUTH
GAUTENG HIGH COURT, JOHANNESBURG
Case
No. 16813/2012
DATE:
22 MARCH 2013
ELETRONIC
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
RED
ANT (PTY)
LTD
................................................................................................
Applicant
And
MOGALE
CITY
MUNICIPALITY
.............................................................
First
Respondent
MAFOKO
SECURITY SERVICES (PTY) LTD
...............................
Second
Respondent
BOSASA
SECURITY SERVICES (PTY) LTD
…...............................
Third
Respondent
FIDELITY
SECURITY SERVICES (PTY) LTD
.................................
Fourth
Respondent
NATIONWIDE
SECURITY
CC
................................................................
Fifth
Respondent
CHANGING
TIDES 208 (PTY)
LTD
......................................................
Sixth
Respondent
JUDGMENT
MEYER,
J
[1]
Fidelity Security Services (Pty) Ltd (‘Fidelity’) seeks
the review and setting aside of a decision of Mogale City
Local
Municipality (‘Mogale City’) taken on 19 March 2012 to
award a tender to Mafoko Security Patrols (Pty) Ltd (‘Mafoko’)
for the provision of armed and unarmed security services to Mogale
City for a period of three years commencing on 1 April 2012
and of
the contract that was concluded between Mogale City and Mafoko on 29
March 2012 pursuant to such award. Red Ant Security
Services Pty Ltd
(‘Red Ant’) and Fidelity submitted bids for the same
contract, but both companies were disqualified.
The tender is worth
approximately R2.5 million per month and its estimated total value is
R86,4 million. It is said to be the
biggest tender awarded in
Mogale’s history.
[2]
This matter began with a review application brought by Red Ant on 11
May 2012, wherein it sought the setting aside of the award
of the
tender to Mafoko and an order substituting Red Ant for Mafoko as the
successful tenderer or, alternatively, an order remitting
the
decision to Mogale City for reconsideration on the basis that
thirteen employees of Mogale City might then not be involved
in the
reconsideration of the tender award (‘Red Ant’s
application’). Mogale City, as the first respondent,
opposed
Red Ant’s application. It delivered the record in terms of Rule
53 of the Uniform Rules. Red Ant supplemented its
founding papers
and amended its notice of motion in terms of Rule 53(4) on 27 July
2012. Mogale City filed its answering affidavit
on 10 September
2012. Fidelity, as the fourth respondent, also filed an answering
affidavit on 14 September 2012, wherein it supported
the relief
claimed by Red Ant, except for the relief relating to the
substitution of Red Ant for Mafoko, which it opposed. Red
Ant filed
its replying affidavit on 12 October 2012, wherein it abandoned its
prayer for substitution and it accepted the stance
of Fidelity that
the appropriate order would be one of remittal for a fresh decision.
[3]
On 6 December 2012, Red Ant’s attorneys of record filed a
notice of withdrawal of Red Ant’s application. The notice
of
withdrawal did not tender costs. On 10 December 2012, Fidelity’s
attorney received a letter from Red Ant’s attorneys
informing
him that Red Ant and Mafoko had negotiated a deal in terms of which
Mafoko had agreed to cede 35% of its contract with
Mogale City to Red
Ant. Such deal was negotiated despite Fidelity’s interest in
the review application and Red Ant’s
own allegation that Mogale
City’s disqualification of Fidelity from the tender process was
procedurally unfair and rendered
unlawful the award of the tender and
the conclusion of the contract with Mafoko.
[4]
On 13 December 2012, Fidelity brought a so-called counter-application
(‘Fidelity’s counter-application’) in
which it
seeks the following relief:
1.
It is declared that this application is one of urgency and the
applicant’s failure to comply with the Rules of this Court
is
condoned.
2.
The fourth respondent is given leave to bring this
counter-application.
3.
The decision(s) of the first respondent of 19 March 2012 and/or
thereafter to award tender No: SS (T&S) 01/2012 to the second
respondent is reviewed and set aside.
4.
The contract between the first respondent and the second respondent
pursuant to tender No: SS (T&S) 01/2012 is set aside
and declared
void ab initio.
5.
The decision of the first respondent, taken on or about 10 December
2012, to allow the second respondent to cede 35% of its contract
to
the applicant pursuant to tender No: SS (T&S) 01/2012 is reviewed
and set aside.
6.
The contract of cession between the second respondent and the
applicant is set aside and declared void ab initio.
7.
Directing that the first respondent re-evaluate the bids submitted
for tender No: SS (T&S) 01/2012 and re-award the contract
within
4 weeks of the date of this order or any other period that the court
may determine.
8.
The first respondent, applicant and any other respondent that oppose
this application are ordered to pay the fourth respondent’s
costs in the application and counter application, including the costs
of two counsel.
9.
The applicant is granted further or alternative relief.
[5]
Only Mogale City opposed Fidelity’s counter-application. Its
answering affidavit was filed on 10 January 2013. Fidelity’s
replying affidavit was filed on 11 January 2013. Fidelity’s
heads of argument were filed on 8 February 2013, and those of
Mogale
City on 14 February 2013. The date specially allocated for the
commencement of the hearing of Fidelity’s counter-application
was Monday, 4 March 2013. The hearing of the matter was concluded
during the afternoon of Wednesday, 6 March 2013.
[6]
A judgment in this matter is urgently required. See: Millenium
Waste Management (Pty)Ltd v Chairperson Tender Board: Limpopo
Province and Others
2008 (2) SA 481
(SCA), para [34]. The contract
in issue has a duration of three years. It has now run for almost
one year. This judgment will
accordingly be relatively brief and the
focus will be on aspects that I consider decisive of the matter.
[7]
Fidelity seeks leave ‘to bring this counter-application’
in prayer 2 of its notice motion. Such leave it seeks
in terms of
Rule 24(2). Rule 6(7) permits a party in any application proceedings
to bring a counter-application. Rule 24 deals
with counterclaims in
action proceedings. Fidelity’s contention is that although
Rule 24 is not listed in Rule 6(14) as
one of the rules that are
applicable to applications it should nevertheless govern the
procedural aspects relating to counter-applications,
because: Rule 6
is silent on that; Rule 24 provides a ‘convenient and
sensible’ procedure also for counter-applications;
no party
will be prejudiced through the application of such procedure; and
there is case law authority - such as Academy of Learning
(Pty) Ltd v
Hancok and Others
2001 (1) SA 941
(CPD), at 950G, and Reymond v
Abdulnabi and Others
1985 (3) SA 348
(WLD), at 349E – F -
supporting the contention that it falls within the inherent
jurisdiction of a superior court to adopt
rules applicable to actions
in applications.
[8]
The competency of the counter-application was not challenged in
Mogale City’s heads of argument. Its counsel, Adv Mansingh
who
appeared with Adv Mofokeng, informed me at the commencement of the
hearing that Mogale City accepts that the counter-application
was
properly before this court. The competency of the
counter-application was only challenged on the second day of the
hearing
by way of retraction by counsel for Mogale City of the
concession that had been made at the commencement of the hearing. It
was
then submitted on behalf of Mogale City that Fidelity ought to
have enforced its claim against Mogale City by way of a third party
notice in accordance with the provisions of Rule 13.
[9]
I am of the view that the attorney for Fidelity erred in bringing
Fidelity’s counter-application after Red Ant’s
application had been withdrawn in terms of Rule 41. Insofar as Red
Ant’s notice of withdrawal does not embody a consent
to pay
costs, Fidelity may, in terms of Rule 41(c), ‘…apply to
court on notice for an order for costs.’ It
was no longer open
for Fidelity to bring a counter-application under Rule 6(7) in
proceedings that had been withdrawn. I accordingly
need not decide
whether the provisions of Rule 24 are applicable to applications or
whether Fidelity ought to have issued and served
on Mogale City a
third party notice in accordance with the provisions of Rule 13.
Fidelity ought to have enforced its claim against
Mogale City by way
of a separate application.
[10]
Fidelity’s counter-application, however, is in substance a
fresh application. It was served on all the parties. It
comprises a
founding, answering and replying affidavit. In paragraph 14 of its
answering affidavit Mogale City specifically incorporated
its
answering affidavit and annexures thereto filed in Red Ant’s
application as part of its opposition to Fidelity’s
counter-application. The record that was delivered in terms of Rule
53 in Red Ant’s application has been relied upon by
Mogale City
and Fidelity. Neither party was alive to the issue that Fidelity
ought to have enforced its claim against Mogale City
by way of a
separate application until I raised it with counsel during the course
of the hearing. The entire matter was argued
over three court days.
There is no prejudice to Mogale City if heed is not taken of the
procedural irregularity in this matter.
Doing so will interfere with
the expeditious and more inexpensive present decision of this matter
on its real merits. Any further
delay in the finalisation of this
matter may drastically reduce or even defeat the granting of
effective relief. See: Trans-African
Insurance Co Ltd v Maluleka
1956 (2) SA 273
(A), at 278F – G; Federated Trust Ltd v Botha
1978 (3) SA 645
(A), at 654D – E. I am in all the
circumstances of the view that the interests of justice require me to
exercise my inherent
jurisdiction by overlooking the procedural
irregularity in order to avoid injustice. See: Oosthuizen v Road
Accident Fund
2011 (6) SA 31
(SCA), para 19; South African
Broadcasting Corporation Ltd v National Director of Public
Prosecutions and others
[2006] ZACC 15
;
2007 (2) BCLR 167
(CC), paras 35 – 36;
PFE International Inc (BVI) and others v Industrial Development
Corporation of South Africa Ltd
2013 (1) SA 1
(CC), paras 30 –
33.
[11]
I now turn to the merits of this matter. In its answering affidavit,
Mogale City confirms that it was Mafoko’s intention
to attempt
to cede 35% of the contract to Red Ant, but it says that no agreement
of cession was indeed concluded between them.
Mafoko’s
attorneys advised it on 11 December 2012, which date was after the
launch of the counter-application, to suspend
the execution of the
cession. Fidelity’s counsel, Adv C Steinberg who appeared with
Adv N Ferreira, on behalf of Fidelity
accordingly abandoned the
relief prayed for in prayers 5 and 6 of Fidelity’s
counter-application.
[12]
Fidelity was the successful bidder in respect of Mogale City’s
tender (No. SS (P&S) 06/2011) for the rendering of
security
services to all sites situated within the jurisdiction of Mogale City
Local Municipality for a period of six months.
As a result thereof
Fidelity rendered security services to Mogale City. The contract
duration was extended until the end of January
2012.
[13]
Mogale City issued an invitation to bid (No. SS (T&S) 01/2012)
during July 2011 for the rendering of such security services
for a
period of three years. The invitation to bid provides that tenders
would be evaluated ‘… in terms of the 90/10
points
system which awards points on the basis of 90 points for price and 10
points for contract participation goals. Preference
points are
offered to tenderers for HDI [historically disadvantaged individuals]
(6 points) and for Promotion of Mogale City-based
Enterprises (4
points).’ Tenders would first be assessed for functionality.
Only those bids that met the minimum functionality
requirement, which
was 48 out of 70 points, would proceed for assessment in terms of the
90/10 point system. The closing date
for the submission of bids was
1 August 2011.
[14]
The inclusion of these provisions in the invitation to bid was in
line with Mogale’s City’s own Supply Chain Management
Policy (‘the SCM Policy’), which governed the tender
process. The SCM Policy, in turn, is informed by legislation,
such
as the
Local Government: Municipal Finance Management Act 56 of 2003
and its regulations, the
Preferential Procurement Policy Framework
Act 5 of 2000
and its regulations, and s 217 of the Constitution of
the Republic of South Africa, 1996, which provides that when an organ
of
state contracts for goods and services ‘…it must do
so in accordance with a system which is fair, equitable, transparent,
competitive and cost-effective.’ This is the golden thread
that runs through the applicable legislation.
[15]
Messrs Nchefu and Korff of Mogale City’s Department of Security
and Social Services (‘the department’) were
assigned to
assess the functionality and financial proposals of the bidders. The
department is the entity responsible for providing
security services
to Mogale City. Nchefu and Korff each separately evaluated the bids
during the functionality evaluation stage,
which was conducted
between 11 October 2012 and 26 October 2012. The final score each
bidder received represented the average
of the individual scoring by
Nchefu and Korff. Their functionality score sheets reflect a
functionality score of 36 points given
by Nchefu to Mafoko and 43
points given by Korff. The functionality score sheets reflect an
average score of 39.5 that was given
to Mafoko for functionality,
which was below the minimum required score of 48 points. Red Ant’s
average score for functionality
is reflected as 65.5 points and that
of Fidelity as 66.5 points.
[16]
The scores were captured in the department’s report to the Bid
Evaluation Committee (‘BEC’), which committee
in terms of
the SCM policy evaluates bids in the first instance and submits its
report and recommendations regarding the award
of bids to the Bid
Adjudication Committee (‘BAC’). The BAC considers the
report of the BEC and either endorses the
BEC recommendations for the
accounting officer’s approval or it makes another
recommendation to the accounting officer.
[17]
Mafoko, however, was recorded as having obtained 48.5 points for
functionality in the department’s report to the BEC.
Fidelity
was recorded as having obtained 66.5 points and Red Ant 65.5 points.
The BEC accepted all three as eligible to move
on to the next stage
of the assessment. The scoring obtained by the front runners at
the next stage of the assessment –
the 90/10 system prescribed
by the Preferential Procurement Regulations of the
Preferential
Procurement Policy Framework Act 5 of 2000
- were 93.72 points by Red
Ant, 92.24 points by Fidelity and 91.63 points by Mafoko.
[18]
Regulation 38(1)(c)
of the
Municipal Supply Chain Management
Regulations provides
that
‘
[a]
supply chain management policy must provide measures for the
combating of abuse of the supply chain management system, and
must enable the accounting officer –
to
check the national treasury’s database prior to awarding any
contract to ensure that no recommended bidder, Or any of its
directors, is listed as a person prohibited from doing business with
the public sector.’
[19]
The requirement is reflected in paragraph 38(1)(c) of the SCM
Policy, which provide that
‘
[t]he
accounting officer must – check the National Treasury’s
database prior to awarding any contract to ensure that
no recommended
bidder, or any of its directors, is listed as a person prohibited
from doing business with the public sector.’
[20]
One of Fidelity’s directors, Mr. Godfrey Jack (‘Jack’),
was so listed on National Treasury’s database.
National
Treasury ‘blacklisted’ him from doing business with any
organ of state for a period of 10 years as from
20 November 2003
until 19 November 2013. It is undisputed that Fidelity only became
aware of Jack’s blacklisting by National
Treasury on 4
September 2011. Jack, on 6 September 2011, amicably resigned as a
director of Fidelity’s board of directors
and Mr Simon Mahlangu
was on the same day appointed in his stead. Jack’s
blacklisting only came to the attention of Mogale
City on 8 November
2011.
[21]
I interpolate to mention that in application proceeding between Jack
and Fidelity as the applicants and the Chairperson: Bid
Adjudication
Committee National Treasury, the Director-General of the National
Treasury and the Minister of Finance as the respondents,
the North
Gauteng High Court, on 10 May 2012, set aside the decision to place
Jack’s name on the National Treasury’s
database of
restricted suppliers and an order was granted to remove his name
within 5 days of the order. The other relief claimed
by Jack and
Fidelity in those proceedings was postponed sine die to the opposed
motion court roll. On 16 August 2012, the North
Gauteng High Court
issued a further order in those proceedings, which is that Jack’s
name ‘… is deemed for all
purposes never to have been
included on the National Treasury’s database of restricted
suppliers.’
[22]
The issue of the blacklisting of a director of Fidelity was discussed
at BEC meetings. The minutes of the BEC meeting of 9
January reflect
that Nhefu advised the BEC that Mogale City and the department would
be privileged ‘in terms of service delivery’
if the
tender is awarded to Fidelity due to its track record and the ‘very
high’ score it had achieved during the bid
evaluation process.
The minutes of the BEC meeting on 11 January 2012 reflect that the
BEC at that stage recommended that the
tender be split between
Fidelity and Red Ant due to the ‘small margin and difference’
between the two. Fidelity had
scored 92.24% and Red Ant 93.72%
According to this recommendation it was only in the event that
Fidelity refused the offer of
a split that Mafoko would enter the
picture.
[23]
On 13 January 2012, the BEC received a report and obtained legal
advice regarding Fidelity. It decided to disqualify Fidelity
from
the tender. The minutes reflect that the chairperson requested
advice from Mogale City’s legal adviser regarding Fidelity’s
position as a bidder. His advice was that Fidelity had had the
opportunity to respond to Mogale City regarding its shareholders,
but
that ‘… there was no proof of such information
received.’ For this reason he was of the view that it was
not
advisable to consider Fidelity’s bid. On 16 January 2012, the
BEC signed its recommended proposal, which would serve
before the
BAC. It inter alia recommended that Red Ant be awarded 60% and
Mafoko 40% of the contract.
[24]
The BAC, at its meeting on 20 January 2012, approved the
recommendation of the BEC. The BAC submitted its recommendation to
Mr Mashitisho, the municipal manager and accounting officer.
Mashitisho referred the recommendations back to the BEC and BAC to
investigate possible impropriety by Red Ant. Information had been
brought to his attention that Red Ant had hosted a party and
offered
gifts to the department and senior members of the department.
Regulation 29(6)
of the
Municipal Supply Chain Management Regulations
provides
that ‘[t]he accounting officer may at any stage of a
bidding process refer any recommendation made by the evaluation
committee
or the adjudication committee back to that committee for
reconsideration of the recommendation.’
[25]
The final BEC recommendations dated March 2012 inter alia include a
recommendation that Fidelity was disqualified for the following
reasons: Fidelity had not officially responded to allegations that
one of its shareholders was on the Treasury blacklist; the
information obtained about Fidelity’s directors was not
obtained in connection with this bidding process and may accordingly
not be taken into account; and Fidelity’s tender had to be
evaluated according to the information it contained when submitted,
which was that Jack was listed as a shareholder. It was recommended
that Red Ant be disqualified because of the gifts and donations
it
had bestowed on the department and officials of the department.
Bosasa was the fourth highest scorer at 81.91 points. The
recommendation was that ‘… Mafoko be awarded 70% and
Bosasa 30% of the total value of the contract, subject to negotiation
of the rates of Bosasa in order to align them with the rates as
tendered by Mafoko.’ Mashitisho, however, awarded the whole
tender to Mafoko after Bosasa had declined the award of 30% of the
contract.
[26]
One of Fidelity’s grounds for review is that its
disqualification was unlawful. A stated reason for disqualifying
Fidelity
was that it had not responded to queries from Mogale City
officials regarding the blacklisting of Jack. The evidence, however,
reveals that during November 2011, and before the decision to
disqualify Fidelity had been taken, it appraised Mogale City of the
facts that it only became aware of the blacklisting of Jack on 4
September 2011; that he amicably resigned on 6 November 2011;
and
that Mahlangu was appointed as a new director of Fidelity in his
stead. Fidelity also furnished Mogale City with supporting
documentation, including a formal announcement that Mahlangu had
replaced Jack on Fidelity’s board of directors; the resolution
of the board of directors appointing Mahlangu as a director; a
certificate of good standing from the Private Security Industry
Regulatory Authority issued on 14 October 2011, confirming that Jack
was no longer a director of Fidelity; and documents from
the
Companies and Intellectual Property Commission confirming Jack’s
resignation. The inescapable conclusion on all the
evidence
presented in this application is that members of the BEC received
Fidelity’s response and the documents which Fidelity
furnished
to Mogale City and that such information and documents served before
and were considered by the BEC and the BAC in connection
with the
bidding process in question. The fact that Mogale City initially
requested the information and that it was furnished
by Fidelity in
connection with the contract concluded between them pursuant to
another tender (No SS(P&S) 06/2011) do not advance
the case of
Mogale City.
[27]
Mogale City’s counsel submitted that ‘[in] any event, the
decision to disqualify Fidelity was not on the basis
that it failed
to respond to queries but rather that from the outset it was
disqualified …’. The submission is that
Mogale City had
no power to take Jack’s resignation into account when it
considered Fidelity’s bid since his name was
listed as a
director of Fidelity at the time when Fidelity’s bid was
submitted. Mogale City’s counsel submitted that
‘Fidelity’s
submission of the bid was void ab initio by operation of law.’
There is, in my view, no merit in
these submissions.
[28]
The clear and unambiguous language used in paragraph 38(1)(c) of the
SCM Policy and in
regulation 38(1)(c)
of the
Municipal Supply Chain
Management Regulations to
which I have referred earlier on in this
judgment refutes the contention of Mogale City that a bidder is to be
disqualified ab
initio if it or any of its directors was listed on
the National Treasury’s database at the time of the submission
of its
bid. The National Treasury’s database must be checked
‘prior to awarding any contract’ and this must be done
to
ensure that no ‘recommended bidder or any of its directors’
is listed as a person prohibited from doing business
with the public
sector. The accounting officer is accordingly obliged to check the
National Treasury’s database at any stage
prior to awarding the
contract. A recommended bidder will not be disqualified if its name
or that of its director has been removed
from the National Treasury’s
database prior to the contract being awarded.
[29]
Mogale’s City’s counsel submitted that for the decision
makers to have considered Fidelity’s bid in the light
of Jack’s
resignation would have constituted a material amendment to the bid
that would have amounted to unlawful administrative
action. I
disagree with this submission. It is not Mogale City’s case
that the directorship of Jack was in any way material
in Fidelity
having been chosen as one of the front runner bidders or that the
appointment of Mahlangu as a director of Fidelity
would have
adversely affected Fidelity’s position as such or that such
circumstances would have had any impact on the points
awarded to
Fidelity in the assessment of its bid. I agree with the submission
made by Fidelity’s counsel that such information
in the
circumstances amounted to no more than an update regarding the
personnel and directors of Fidelity. The ‘ever-flexible
duty
to act fairly’ entitled the BEC in the unusual circumstances of
this matter to have requested Fidelity to clarify the
position with
regard to Jack’s directorship and it enjoined the BEC to take
the information it had obtained in consequence
thereof into account
in its deliberations. See: Metro Projects CC v Klerksdorp Local
Municipality
2004 (1) SA 16
(SCA), para 13.
[30]
Fidelity, to the knowledge of the BEC and BAC, did not have a
director whose name was listed on National Treasury’s database
at the time when the decision to disqualify Fidelity was taken. Jack
resigned as a director of Fidelity on 6 September 2011.
The BEC’s
final report in which it recommended the disqualification of Fidelity
was dated March 2012.
[31]
in Oudekraal Estates (Pty Ltd v City of Cape Town and Others
2004
(6) SA 222
(SCA), para [27], the Supreme Court of Appeal held that
until invalid administrative action – and the consequences
thereof
– ‘… is set aside by a court in
proceedings for judicial review it exists in fact and it has legal
consequences
that cannot simply be overlooked.’ Per Howie P et
Nugent JA. The order of the North Gauteng High Court that set aside
the
decision to place Jack’s name on the National Treasury’s
database of restricted suppliers and in terms whereof his name
is for
all purposes deemed never to have been included on the National
Treasury’s database of restricted suppliers, in my
view,
removes the decision to list his name and the legal consequences
thereof from the range of the principle that invalid administrative
action ‘exists in fact and has legal consequences that cannot
simply be overlooked.’ The decision to disqualify Fidelity
for
the reason that Jack’s name was listed on the National
Treasury’s database of restricted suppliers was accordingly
premised on an error of fact even though the decision makers were
ignorant of the true factual position.
[32]
I am accordingly of the view that the decision to disqualify Fidelity
was based on a failure to take relevant considerations
into account
and that it should be reviewed in terms of s 6(2)(e)(iii) of the
Promotion of Administrative Justice Act 3 of 2000
(‘PAJA’).
Such decision was also based on material mistakes of fact and it
falls to be reviewed for that reason.
See: Pepcor Retirement Fund &
Another v Financial Services Board & Another
2003 (6) SA 38
(SCA), para 47.
[33]
Another ground for review raised by Fidelity is that Mogale’s
award of the tender to Mafoko was unlawful and falls to
be set aside
since Mafoko’s bid should have been eliminated at the
functionality stage of the evaluation process.
[34]
Regulation 8(1) of the Preferential Procurement Regulations provides
that ‘[a]n organ of state must, in the tender documents,
indicate if, in respect of a particular tender invitation, tenders
will be evaluated on functionality and price’ and regulation
8(5) provides that ‘[t]he conditions of tender may stipulate
that a tenderer must score a specified minimum number of points
for
functionality to qualify for further adjudication.’
[35]
The Bid Specification Checklist stated that a minimum of 48 points
for functionality was required to meet the requirements
of the
tender. The functionality score sheets of Nchefu and Korff reflect
that they awarded an average score of 39.5 points to
Mafoko for
functionality. However, when Nchefu recorded the functionality
results in the recommendations to the BEC and the BAC,
Mafoko’s
score was recorded as 48.5 points. That score of 48.5 points was
thereafter reflected in the BEC recommendations
to the BAC and in the
BAC’s recommendations to the accounting officer.
[36]
Mogale City’s response is that if there had been any mistake in
the recording of the scores of Mafoko and of the other
bidders, such
errors would have been rectified by Nchefu, who prepared the written
recommendations that were ultimately acted upon.
Mogale City’s
counsel submitted that ‘Nchefu and Korff obviously re-evaluated
the initial functionality scoring based
on the patent errors in the
first round.’ Counsel also submitted that ‘[t]he revised
scoring, from the documentation
per se, is evidently correct.’
Mogale City’s response and the submissions of its counsel in
this regard amount to
mere speculation. Mogale City failed to put up
affidavits from either Nchefu or Korff to explain whether Mafoko’s
score
captured on the functionality score sheets was in fact
incorrect, whether they ‘revised’ it for that reason as
was
suggested in the heads of argument of Mogale City’s
counsel, and whether they included its correct functionality score in
the recommendations to the BEC.
[37]
Mogale City accordingly did not refute the case put up by Fidelity
that Mafoko’s bid failed to meet the minimum qualifying
score
for functionality. It must accordingly be accepted that the decision
makers did not take the relevant consideration that
Mafoko had not
passed the functionality threshold requirement into account. The
award was also unfair insofar as a different standard
was applied to
Mafoko. Tenderers should be treated fairly in relation to each
other. An essential element of fairness is the
‘…
equal treatment of tenders.’ Metro Projects CC v Klerksdorp
Local Municipality
2004 (1) SA 16
(SCA), para [14]. The decision to
award the tender to Mafoko should accordingly be reviewed in terms of
secs 6(2)(iii) and 6(2)(c)
of PAJA. It also falls to be reviewed in
terms of the principle of legality, because the decision makers’
decision was based
on a material error of fact that Mafoko had
fulfilled the threshold functionality requirement of the tender.
[38]
I am in all the circumstances of the view that the decision to award
the tender to Mafoko and the contract that was concluded
between
Mogale City and Fidelity pursuant to such decision should be reviewed
and set aside and that an order in terms of s 8(1)(c)(i)
of PAJA
should be granted remitting the matter for reconsideration by Mogale
City. It is not necessary for me to consider the
applicant’s
other grounds for review.
[39]
Fidelity, in terms of prayer 8 of its counter-application, seeks that
Mogale City, Red Ant and any other respondent that opposes
its
counter-application be ordered to pay its costs of Red Ant’s
application and of its counter-application, including the
costs of
two counsel. Fidelity’s counsel, however, submitted that
Mogale City should pay Fidelity’s costs of Red Ant’s
application and of Fidelity’s counter-application. Red Ant’s
notice of withdrawal does not embody a consent to pay
costs and I
consider it more appropriate for Fidelity to follow the procedure
prescribed by Rule 41(c) insofar as the costs of
Red Ant’s
application are concerned. No reason exists why the costs of the
counter-application should not follow the event.
The employment of
two counsel on behalf of each party cannot be said to have been
extravagant or over-cautious and the costs of
two counsel should in
my view be authorised.
[40]
In the result I make the following order:
1.
The decision(s) of the first respondent of 19 March 2012 and/or
thereafter to award tender No SS (T&S) 01/2012 to the second
respondent is reviewed and set aside.
2.
The contract between the first respondent and the second respondent
pursuant to tender No SS (T&S) 01/2012 is set aside and
declared
void ab initio.
3.
The first respondent is to re-evaluate the bids submitted for tender
No SS (T&S) 01/2012 and re-award the contract within
4 weeks of
the date of this order.
4.
The first respondent is ordered to pay the fourth respondent’s
costs of the counter-application, including the costs of
two counsel.
P.A.
MEYER
JUDGE
OF THE HIGH COURT
22
March 2013
Date
of hearing: 4 – 6 March 2013
Date
of judgment: 22 March 2013
Fourth
respondent’s counsel: Adv C Steinberg and Adv N Ferreira
Fourth
respondent’s attorneys: Blake Bester Inc
Ref:
Mr P Bester
First
respondent’s counsel : Adv URD Mansingh and Adv T Mofokeng
First
respondent’s attorneys: Tshisevhe Gwina Ratshimbilani (TGR) Inc
Ref:
Mr MT Matsau