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[2018] ZAGPJHC 454
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Mobile Telephone Networks (Pty) Ltd v Transnet Soc Ltd and Another (2017/33335) [2018] ZAGPJHC 454 (18 June 2018)
REPUBLIC
OF SOUTH AFRICA
THE
HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE NO
2017/33335
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: YES
In
the matter between:
MOBILE
TELEPHONE NETWORKS (PTY) LTD
Applicant
and
TRANSNET
SOC LTD
First
Respondent
VODACOM
(PTY) LTD
Second
Respondent
JUDGMENT
Headnote
Vodacom
was disqualified from a tender process and MTN was awarded the
tender.
Vodacom
was disqualified because in a table of answers to questions it put in
N/A instead of a Rand value.
Vodacom
contended this was not an irregularity and was in any event
immaterial – on the facts – held it was a material
non-compliance which Transnet was not authorised by the bis
specifications to overlook – the requirement of a numeric
answer
was critical to composing a matrix for comparisons with other
bidders and was a legitimate requirement
Vodacom
alleged MTN was no compliance in several respects – On the
facts, held that MTN was not non-compliant
Application
dismissed with costs
SUTHERLAND
J:
Introduction
[1]
This case is about a challenge to the award of a tender. The
controversy arises from the disqualification of MTN
and from the
non-disqualification of Vodacom from that tender process. More
specifically:
1.1.
Did MTN fail to comply with mandatory requirements of a Request for
Proposal (RFP) in that it
wrote into a prescribed block of the
pricing schedule “N/A” instead of “R0”, and
was MTN, on that ground,
correctly disqualified from the tender
process? If not, should not the award of the tender be set aside?
1.2.
Independently of the first question, in respect of Vodacom:
1.2.1.
Should it not have been disqualified for failing to submit
unequivocally to the Service Level Agreement
(SLA) stipulated by
Transnet?
1.2.2.
Should it not have been regarded as having failed the stipulated
threshold for technical compliance?
1.2.3.
Was it illegitimately allowed to augment its bid?
If
so, ought not the tender awarded to it, be set aside, along with the
contract concluded with Transnet, pursuant thereto?
[2]
The RFP set out its evaluation methodology. As it is pertinent to the
various controversies, stages 1 to 3 are cited in full:
“
6
EVALUATION
METHODOLOGY
Transnet
will utilise the following methodology and criteria in selecting a
preferred Service Provider, if so required:
NB:
Evaluation
of the various stages will normally take place in a sequential
manner. However, in order to expedite the process, Transnet
reserves
the right to conduct the different stages of the evaluation process
in parallel.
[1]
In such instances the evaluation of bidders at any given stage must
therefore not be interpreted to mean that bidders have necessary
passed any previous stage(s).
6.1
STAGE
ONE: Test for Administrative Responsiveness
The
test for administrative responsiveness will include the following:
Administrative responsiveness
check
RFP Reference
·
Validate whether bid has
been lodged on time
Section 1 paragraph 3
·
Validate whether all
returnable documents and/or schedules were duly competed and
returned by the closing date and time
Section 4
·
Validate whether the bid
documentation has been duly signed by the respondent
All Sections
·
Verify the validity of all
returnable documents
Section 4, page 46 and 47
·
Certificate of attendance of
compulsory RFP briefing or singing of the attendance register
Section 9
The
test for administrative responsiveness [stage One] must be passed for
a Respondent’s Proposal to progress to stage Two
for further
pre-qualification
6.2
STAGE
TWO: Test for Substantive Responsiveness to RFP
The
test for substantive responsiveness to this RFP will include the
following:
Check for substantive
responsiveness
RFP Reference
·
Whether any general
pre-qualification criteria set by Transnet, have been met
Section 1 paragraph 8,
Section 4-validity period
Section 4- Returnable documents
·
Determine whether the Bidder
provided an indication (%) of their National Network Coverage
across all nine (9) Provinces
Annexure F
·
Determine whether the Bidder
provided a valid ICASA Licence [individual Electronic
Communications Network Services (IECNS)]
Section 4 – Returnable
documents
·
Whether the Bid contains a
priced offer (completed pricing schedule with the settlement and
without the settlement); populated
in alignment to the Notes to
Pricing
Section 3, page 23 to 40
·
Whether the Bid materially
complies with the scope and/or specification given
Section 2 – Scope of
Requirements
·
Whether any AD
pre-qualification set by Transnet has been met as follows:
-
A
commitment that the monetary value of all SD initiatives to be
undertaken by the Respondent ill not be less than
30%
of the contract value
Section 11
The
test for substantive responsiveness [Stage Two] must be passed for a
Respondent’s Proposal to progress to Stage Three
for further
evaluation
6.3
STAGE
THREE: Minimum Threshold 70% for Technical Criteria
The
test for the Technical and Functional threshold will include the
following:
Technical Criteria
% Weightings
RFP Reference
Technical Questionnaires Responses
50%
Annexure A
Acceptance of SLA targets
50%
Section 3, page 43 and Annexure
E
Total
Weighting: 100%
Minimum
qualifying score required: 70%
The minimum threshold for
technical/functionality [stage Three] must be met or exceeded for a
Respondent’s Proposal to progress
to Stage Four for final
evaluation
Transnet
reserves the right to lower the threshold for Technical from 70% to
60% if no Bidders pass the predetermined minimum threshold
in respect
of Technical.”
[3]
The various issues are addressed in turn.
THE
DISQUALIFICATION OF MTN
[4]
The controversy is crisp.
The
Facts
[5]
The RFP contained several stipulations which had to be strictly
complied with. Among such stipulations was a set of instructions
relevant to a document entitled “Notes to Pricing”. This
concerned a list of 33 devices in a pricing schedule in respect
of
which separate bids were solicited. Section 3A sets out the
instructions. The rigidity of the instructions, especially (e) and
(g) bears noting:
“
Section
3A: PRICING SCHEDULE (3 YEAR PROPOSITION)
Exclusive of the Settlement/Buy-out
Notes to pricing:
a) Prices must be
quoted in
South African Rand
(exclusive of VAT).
b) Prices to be
submitted using the two (2) options i.e exclusive of the
settlement/buy-out and inclusive of the
settlement/ buy-out. Failure
to provide both options
will result in disqualification. The
settlement/ buy-out value will be provided to the Respondents at the
briefing session.
c) Should the
current service provider bid for this tender, the pricing option
exclusive of the settlement/ buy-out
option will be utilised for
evaluation purposes to facilitate a like-for-like comparison of the
offers. The pricing option inclusive
of the settlement amount will be
utilised for Transnet to gain an understanding of the Total Cost of
Ownership (TCO) over the contract
term should a new service provider
be appointed.
d) Should the
current service provider not bid, the pricing options inclusive of
the settlement buy-out will be
utilised for evaluation purposes.
e) To facilitate a
like-for-like comparison bidders must submit pricing
strictly in
accordance with this pricing schedule and not utilise a different
format.
Deviation from this schedule
will
result in a bid
being declared non- responsive.
f) Please note
that should you have offered a discounted price(s), Transnet will
only consider such price
discount(s) in the final evaluation stage if
offered on an unconditional basis.
g) Respondents are
required to complete all the
green blocks with numeric South
African Rand values (exclusive of VAT), no other wording or blank
spaces will be accepted
in the pricing schedule below. Failure to
do so
will result in disqualification.”
(The
emphasis is in the original text)
[6]
In addition to these instructions, the pricing schedule, itself,
immediately before the list of devices, reminded the persons
filling
in the prescribed document thus:
“
Note:
Respondents
are required to provide (South Africa rand, at cost) for each of the
handsets listed below.
Devices
(brand and models) listed below are not conclusive, however to
facilitate a like for like comparison, Bidders are prohibited
from
providing any alternative mobile device makes or models other than
the ones listed in the table below: failure to comply will
result in
disqualification’
[7]
A briefing session was held with potential bidders about what was
required to be done in filling out the prescribed forms of
the RFP.
(It is noteworthy that this bid process was a resumed process after
the earlier bid process (The 2015 RFP) had been
aborted because the
bidders had been held to unresponsive. More it said about that
episode hereafter).
[8]
The Minute
[2]
of the briefing
session records, among others, the following exchange:
“
Q:
What happens if models listed on the RFP are outdated?
A:
Please try to complete the pricing to ensure that we can evaluate
like -for -like. The models listed have been checked and are
currently available in the market.”
[9]
A transparency used at the presentation at the briefing session,
again shouted out the instructions.
[3]
Moreover, an example was put up too; it illustrated, graphically, the
pricing schedule with devices listed with rand prices adjacent
thereto and including a “R0” entry. If that was not
enough, a balloon alert on the example proclaimed once again the
very
same instructions.
[4]
[10]
How did MTN react to all of these injunctions and warnings? MTN
filled in the blocks for 4 devices in the pricing schedule:
“N/A”
rather than “R0”.
[5]
[11]
A letter was sent by Transnet informing Vodacom of its
disqualification. In that letter the reason given was:
“…
.
your company was unsuccessful… based primarily on ….failure
to comply with the RFP specification, ie the notes to
pricing under
section 3, note (g) of the RFP document, which stated the
following:
“
Respondents
are required to complete all the green blocks with numeric SA rand
values (exclusive of VAT), no other wording or blank
spaces will be
accepted in the pricing schedule below. Failure will result in
disqualification”
[12]
The first question to pose is whether the MTN’s response was in
compliance with the strict instructions. The answer is
plain; it was
not. The instructions were clear. They were not followed. MTN was
disqualified. Is this decision irregular?
The
evaluation
[13]
The approach is a two-stage test, determining, first, if an
irregularity or deviance by the Organ of State occurred, and at
the
second stage assessing its materiality in relation to the purpose for
which it was prescribed. In
Allpay Consolidated Investment
Holdings (Pty) and Others v Chief Executive Officer South
African social Security Agency
and Others
2014 (1) SA 604
(CC) it
was
held:
“
[27]
….deviations from fair process may themselves all too often be
symptoms of corruption or malfeasance in the process.
In other
words, an unfair process may betoken a deliberately skewed process.
Hence insistence on compliance with process formalities has a
threefold purpose:
(a)
it ensures fairness to participants in the bid process;
(b)
it enhances the likelihood of efficiency and optimality in the
outcome; and
(c)
it serves as a guardian against a process skewed by corrupt
influences.
[28]
Under the Constitution there
is no need to conflate procedure and merit. The proper approach is to
establish, factually, whether
an irregularity occurred. Then the
irregularity must be legally evaluated to determine whether it
amounts to a ground of review
under PAJA. This legal evaluation must,
where appropriate, take into account the materiality of ant deviance
from legal requirements,
by linking the question of compliance to the
purpose of the provision, before concluding that a review ground
under PAJA has been
established.
[40]
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. That does not mean that administrators
may never depart
from the system put in place or that deviations will necessarily
result in procedural unfairness. But it
does 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.
[14]
The RFP prescribed plainly what had to be done by bidders. MTN did
not follow the instructions. Could Transnet excuse MTN?
There is no
implied or tacit discretion to condone non-compliance with a
stipulation in the RFP. The absence of such a power was
addressed in
Minister
of Environmental affairs and Tourism v Pepper Bay Fishing (Pty) Ltd
2004 (1) SA 308
(SCA)
which dealt with a failure to pay a fee on time and the failure to
supply a copy of the bid submission:
“
[31]
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 (see, for example,
Le
Roux and Another v Grigg-Spall
1946 AD 244
at 252;
South
African Co-operative Citrus Exchange Ltd v Director-General: Trade
and Industry and Another
[1997] ZASCA 6
;
1997
(3) SA 236
(SCA)
([1997]
2 B All SA 321) at 241 (SA)). 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.
[32]
Once it is appreciated that the key to the question lies in the
general notice as a whole, the obvious starting point is to construe
the special provisions of the invitation and the instructions that
Pepper Bay and Smith had failed to comply with. ….[T]he
provisions of the invitation pertinent to the Pepper Bay case,
on their plain wording, clearly state that the application
fee
must
be paid at the time that the application is lodged. Paragraphs 15 and
16 of the instructions are similarly couched in peremptory
terms. An
applicant '
must
pay' the application fee and '
must
pay
the application fee promptly and timeously'. The general principle
is, of course, that language of a predominantly imperative
nature such as 'must' is to be construed as peremptory rather than
directory unless there are other circumstances which negate
this
construction (see eg
Sutter v Scheepers
1932 AD 165
at 173 -
4)…. An even more significant indication that timeous payment
of the application fee is peremptory is that
the invitation
contains an explicit sanction for non-compliance with the provision -
an application submitted without proof of
proper and timeous payment
will not be considered (cf
Sutter v Scheepers (supra
at 174)).
There is also the more general consideration that where, as in the
present case, a statute provides for the
acquisition
of a
right or privilege - as opposed to the
infringement
of an
existing
right or privilege - compliance with formalities that
are prescribed for such acquisition, should be regarded as
imperative. (See
eg
R v Noorbhai
1945 AD 58
at 64;
South
African Citrus Exchange Ltd v Director-General: Trade and Industry
and
Another (supra
at 241E - I).) In the end, these
considerations leave no room for any construction of the specific
provisions that Pepper Bay had
failed to comply with, which allows
for a discretion on the part of the Chief Director to condone such
non-compliance.
[33]
The same holds true of the provisions which are relevant in the case
of Smith. Again, the instructions inform the prospective applicant
(in para 1) that 'you
must
fill in the application form and attach the necessary documents in
the manner described below' and (in para 10) that 'you
must
submit one (1) original and two (2) copies of the application'. It is
true that the instructions do not contain an express sanction
for non-compliance with these provisions. Such a sanction is,
however, provided for in the invitation which warns the prospective
applicant that no application (consisting of,
inter
alia
,
an original application form together with two copies) received after
the stated deadline of midday on 13 September 2001 'will
be accepted
or considered'.
[15]
As to the question whether MTN’s deviation was material and
thus objectively inexcusable, in
Dr JS Moroka Municipality and
others v Betram (Pty) Ltd
[2014] 1 All SA 545
(SCA),
dealing with
the failure to submit an original tax certificate rather than a copy,
it was held:
[10]…..
Essentially it was for the municipality, and not the court, to decide
what should be a prerequisite for a valid tender,
and a failure to
comply with prescribed conditions will result in a tender being
disqualified as an “acceptable tender”
under by the
Procurement Act unless those conditions are immaterial, unreasonable
or unconstitutional.
[11]
…..[It was submitted], however, that the appellants should
have been satisfied with the copy provided and that the failure
to
provide an original was something which the appellant could and
should have condoned.
[12]
The immediate difficulty I have with this argument relates to its
underlying premise that there existed a discretion to condone
a
failure to comply with any of the minimum qualifying requirements set
out in the tender invitation. The respondent was unable
to point to
such a discretion being afforded in any of the relevant legislation
or regulation and, as Brand JA said in
Pepper Bay:
“
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.”
[15]
…... A bid that does not satisfy the necessary prescribed
minimum qualifying requirements simply cannot be viewed as
a bid
“validly submitted”.
[16]
In these circumstances, it is clear that there was no discretion to
condone a failure to comply with the prescribed minimum
prerequisite
of a valid and original tax clearance certificate. That being so, the
tender submitted by the first respondent was
not an “acceptable
tender” as envisaged by the Procurement Act and did not pass
the so-called “threshold requirement”
to allow it to be
considered and evaluated. Indeed, its acceptance would have been
invalid and liable to be set aside – as
was held by this Court
in
Sapela
Electronics.
On
this basis, the appellants were perfectly entitled to disqualify the
first respondent’s tender as they did.”
[16]
MTN contends that there is no material difference between writing
“N/A” and “R0”. Moreover, it contends
that
what “NA” meant was clear from a portion of its bid
documents. The document in question is a page which
appears to
be typed up version of the pricing schedule.
[6]
At the very bottom of the page of this document is a paragraph headed
‘Assumptions’. A similar paragraph does not appear
on the
principal pricing Schedule. It includes several remarks, the last of
which states:
“
N/A indicates devices that are either
not type approved or sourced by MTN. However, MTN will assist
transnet (sic) in procuring
these or alternative devices.’
How
it fits into the documents submitted by MTN is not apparent from the
papers nor was counsel able to account for its geography.
It was
submitted that it was part of the pricing schedule, but this is not
apparent, not least of all because the pricing schedule
runs to 71
numbered pages and this document is not part of that series. The list
of devices is on pages 25-26 of the 71.
[17]
The contention was advanced that the scrutineer of the bid submission
had available this additional information and therefore
the meaning
of “N/A” was readily apparent. This is not a cogent
argument. Self-evidently, how would the scrutineer
know where to
look, and moreover, why would it be thought that an explanation of
“N/A” was tucked away which could
be consulted.
[18]
However, even if, by some means, merit could be distilled from this
argument, it is wholly beside the point. MTN had
been
instructed with wearisome repetition how to fill in the schedule. It
simply ignored the instruction. Whether the meaning of
the aberrant
inscription was divined or not, the scheme of data presentation
demanded by Transnet was thwarted.
[19]
The disclaimers expressed by Transnet were alluded to as support for
an injunction in the RFP to seek clarification from a
bidder at all
stages. This is not a cogent contention. The thrust of the
disclaimers is the right of Transnet not to award
any tender and to
be entitled to interrogate the information presented by demanding
proofs. For example, they provide:
“
10.13:
validate any information submitted by respondents in response to this
bid. This would include but is not limited to requesting
the
respondents to provide supporting evidence ….”
[7]
These
disclaimers do not qualify nor override the rigid stipulations of
paragraph 3A and the pricing list requirements.
[20]
A further argument on behalf of MTN was based on an allusion to this
sentence, apparently a guide to the scrutineers, applicable
to stage
1:
“
Procurement
conducts to highlight non-responsive (complaint) bids and attempts to
obtain outstanding documentation from respondents
prior to declaring
them non-responsive and eliminating bids” (sic)
The
grammar may be a trifle suspect, but its meaning is plain –
make sure the bidders have not inadvertently left out any
prescribed
documents. This courtesy does not address a failure to fill in the
documents as expressly directed.
[21]
In my view, on the facts, the numeric value instruction in section 3A
prescribed by Transnet was material because:
2.1.
The requirement of a strict uniform format was to facilitate a like
with like comparison.
The information in the bid submission was
requested in both digital and hardcopy format. It must be inferred
that the data was
probably destined for capture into a matrix,
whether computerised or manual. A failure to comply as strictly
instructed inhibited
a clean process of comparison and would have
required the officials of Transnet to make assumptions, attribute
interpretations
and in general intrude into the process judgments on
the meaning of answers were they not to conform to the format
prescribed.
“N/A” does not have an obvious uniform
meaning. In my view most readers might have thought it meant “not
applicable”
but MTN’s special meaning was the .least
likely to be guessed.
21.2.
MTN’s decision not to comply inhibited the achievement of the
objective of a perfect qualitatively- neutral
comparison. Transnet
was entitled to demand compliance to facilitate its purposes, which
were demonstrably rational in relation
to its purpose and eminently
reasonable.
[22]
Some reference was made to an earlier aborted RFP in which both MTN
and Vodacom were disqualified. Strictly speaking, that
episode is
irrelevant. However, MTN was disqualified in that exercise for the
same reason as it was disqualified in the current
process. MTN
alleges it was ignorant of the reason. However, the letter informing
it made the reason plain.
[8]
Moreover, it is sufficient to compare the specifications in respect
of the pricing list in the two RFPs to be alerted to the material
amplification in the latter RFP as to the need for strict compliance
with the format of the replies, amplifications plainly designed
to
make absolutely and unequivocally clear what was required.
[9]
Part of MTN’s articulated grievance was that in the aborted bid
process it had filled in the pricing schedule in identical
terms and
been promoted up to the next stage. This is correct, but MTN allows
no weight to the fact that it was disqualified
ex
post facto
when the RFP was withdrawn.
[23]
It is plain that MTN was not compliant. Had Transnet overlooked it,
it would have committed a material irregularity. Accordingly,
the
disqualification of MTN was proper as it was indeed unresponsive in a
material respect.
SHOULD
VODACOM HAVE BEEN DISQUALIFIED?
[24]
The complaints advanced are, to some extent, facets of a single
broader complaint. For analysis purposes, they are distinguished
and
are addressed in turn.
The
70% threshold for technical capacity
[25]
The RFP provided that Bidders who complied with the formalities
stipulated in stage 1 and who therefore were ‘responsive’
would be promoted to stage 2, and if responsive in stage 2 they would
be promoted to stage 3 and so on. Vodacom, alone, was found
by
Transnet, to have satisfied stage 1 requirements of responsiveness
and was promoted to stage 2 and thereafter to stage 3.
[26]
At stage 3, as indicated above, technical competence and capacity
were assessed along with what described as ‘acceptance
of
service levels’. As regards technical competence the RFP
stipulated that a bidder had to exceed a 70% evaluation threshold
to
pass on to the next stage. The assessment was structured in two equal
parts each carrying a 50% weighting; ie the responses
to the
technical questionnaire, and acceptance of the SLA targets. However,
the RFP contained a caveat: “Transnet reserves
the right to
lower the threshold for technical from 70% to 60 % if no bidders pass
the predetermined minimum threshold in respect
of technical”
[10]
[27]
The logical consequence of this was that in a case where only one
bidder was being evaluated, the
de
facto
threshold was 60 %. Vodacom had an initial score of 51.1% Prima
facie, it failed and on MTN’s perspective should have fallen
out in consequence thereof. Moreover, Stage three, by its very nature
of being an evaluative exercise, intrinsically contemplated
interrogation by Transnet of the technical aspects of the bidder’s
offering.
[28]
This is what indeed happened. The “Cross Functional Sourcing
Team” decided to obtain clarification from Vodacom.
The result
of the clarification exercise was a re-scoring to increase the score
to 63.5%. This exceeded the 60% threshold and permitted
Vodacom to be
promoted to stage 4.
The
illegitimate ‘clarification’ complaint
[29]
It was argued on behalf of MTN than anything other than a blind
totting up in relation to what was stated in the initial bid
submission was illegitimate. On what basis was the clarification
exercise that elevated Vodacom’s score from below 50% to
63%
justified? (Moreover, the underlying grievance articulated is that if
Vodacom had a chance to clarify its input on the technical
aspects,
why could not MTN get a chance to clarify “N/A”?)
[30]
The answer offered is that at stage three of the process
clarifications are appropriate to the purpose of that stage. First
there is no stipulation in the RFP which prohibits interrogation at
this stage and, in my view, it would have been anomalous had
there
been such an injunction, given the purpose of stage three in awarding
a score. Scoring inherently involves an allocation
of points as a
result of an evaluation. The bona fides of re-scoring has not been
attacked.
[31]
The clarification opportunity is not available nor appropriate at
earlier stages which deal with formalities and responses
to
standardised questions constructed to afford comparisons. Those stage
do not seek to plumb the intricacies of the bidder’s
specific
offering. No discrimination therefore occurred. The caveat is that
what took place was indeed a clarification not an augmentation.
[32]
Can ‘clarification,’ of itself, be augmentation? True
enough, ‘clarification’ cannot add any
fresh
substantive representation
as to technical capacity. It is however legitimate to submit to the
employers’ request for verification and explication of
that
which has already been represented. Its function is to explain,
eliminate obscurity of meaning, or settle which of contending
possible interpretations about the capacity of the bidder should
prevail. Permitting a clarification opportunity recognises
that
the use of language to express complexities is riven with potential
confusions, and no less, describing technology is, similarly,
inherently susceptible to innocent misunderstandings. Not to seek
clarification would be inherently imprudent.
[33]
The complained of alleged augmentation is that contained in an
attachment to an email from Vodacom.
[11]
It is said the document contains ‘new information’.
Obviously, it does – a ‘clarification’ bereft
of
additional information is possible to conceptualise, but in real
life, is too crimped a concept to be useful. The point to be
made is
that it serves to explain, not make out a fresh substantive claim.
The document sets out questions put to Vodacom, and
once asked,
Transnet was entitled to full answers and Vodacom was duty bound to
answer fully. It is the ambit of the question that
determines the
legitimacy of the exchange of information. In short, a discussion
about how the procedure or the apparatus works
is not augmentation of
the pitch initially put forward and is properly to be described as a
clarification. This exercise was not
conducted
per
se
for
comparative purposes, but rather to facilitate the officials of the
employer applying their minds to the proposition put forward
by the
bidder in question.
[34]
Notably, the complaint by MTN is short on detail about the effect of
the alleged novelties in the clarification in trespassing
into the
zone of a new substantive pitch. Rather the objective of the
complaint seems more of an effort to try to show an equivalence
between stage one rigidity for compliance, and a stage 3 flexibility
to achieve clarity. In my view, the juxta-positioning of the
two
stages for this purpose is inapposite.
A
guarantee of adherence to the SLA
[35]
The complaint about the need for unqualified adherence to the SLA
levels derives from the requirement that a bidder was required
to
‘guarantee’ that it would achieve service level targets
as set out in annexure “E” to the RFP. Because,
as it is
alleged, “E” was a document which it was mandatory to
return in terms of para 8.6 of the RFP, a failure to
comply should
mean the bidder was disqualified at stage 1.
[12]
[36]
The critical declaration by Vodacom is to be found in response to the
question posed in section 3, ‘service Levels,’
of the
RFP.
[13]
The relevant
portion reads thus:
“
3.1
….3.4
3.4
The service provider guarantees that it will achieve the minimum
service
levels
and the SLA targets provided in ‘E’.
3.5
Failure of the service provider to comply with stated service level
requirements will give Transnet the right to cancel the
contract in
whole, without penalty to Transnet….”
[37]
Immediately below these statements were two blocks, a YES and a NO,
to be ticked. Vodacom ticked “No” and wrote
in underneath
the blocks:
“
Vodacom
will work with Transnet to identify the material service levels to
which 3.5 can apply.”
[38]
Two arguments are advanced by MTN:
38.1.
First, the annotation is not strictly in compliance with the
requirements to state “yes” or “no”.
(By
implication, the argument is why disqualify MTN for a “N/A”
instead of a “R0” and not disqualify Vodacom
for not
answering the question by exclusively ticking one or other box?)
38.2.
Second, In the absence of an unequivocal acceptance, how could
Vodacom get any of the 50% score itemised
in the technical
evaluation? It should get 0%, for its “No”.
Logically then, on this thesis, the scoring is restricted
to one of
two outcomes, a 0 for “No” and 50% for “Yes”.
[39]
Transnet and Vodacom answer by contending that the provisions of
paras 6.1 and 6.2 of the RFP
[14]
do
not address themselves to service level targets, an item relevant
only in Stage 3, but address themselves rather, exclusively,
to stage
1 and 2. A plain reading of the text supports this view. It is argued
by Vodacom that its answer was not to be construed
as outright
negative, but merely qualified its acceptance by the additional
written words. Transnet argues, further, that even
if a bald “No”
had been entered that would not be a ground to disqualify for
non-responsiveness; it was a scoring issue,
as illustrated in the
stage 3 technical assessment, referred to elsewhere in this judgment
as a qualitative assessment.
[40]
Moreover, the argument on behalf of MTN overlooks the instruction
given about the “YES” or “NO” exercise
in
this regard:
“
13
INSTRUCTIONS TO
BIDDERS FOR COMPLETING THEIR SLA RESPONSES
13.1
The Service Provider or Bidder must complete the Services Levels or
Targets detailed in point 14 (table
5) below as follows:
13.1.1 Bidders must
indicate their acceptance of each Service Level set by Transnet by
ticking the ‘YES’
box below.
13.1.2
If the Bidder is unable to meet the minimum Service Level set by
Transnet, or wishes to propose a modified
minimum Service Level
target, the Bidder must indicate this by ticking the ‘NO’
box and
indicate
next to the ‘NO’ box column their proposed minimum
Service Level target.
Should the space provided be small, the Bidder must provide the
additional information as an Appendix and clearly reference such
Appendix for ease of evaluation” (emphasis added)
[41]
The reference to TABLE 5 is relevant because Vodacom, in that table,
provided the details of the alternatives it proposed,
several being
more onerous than those put forward by Transnet.
[15]
The Instructions cannot be understood to expect the details of
alternative service levels to be squeezed on the page where
“No”
and “Yes” appear. In Table 5 Vodacom set out its
suggestions made in respect of billing queries turnaround,
sim card
swaps, bulk requests and repairs of handsets. In MTN’s Table 5,
it too set out one qualification to the SLA, in
the identical format,
despite ticking “Yes”.
[42]
Thus, the complaints advanced by MTN about Vodacom’s bid are
meritless.
CONCLUSIONS
[43]
Accordingly, to sum up:
43.1.
MTN was properly disqualified, as it was non-compliant in a material
respect.
43.2.
It is demonstrable that Transnet did not commit any irregularities in
its treatment of Vodacom.
43.3.
No reason exists to set aside the award of the tender to Vodacom, nor
the contract subsequently concluded between
Transnet and Vodacom.
Costs
[44]
The costs should follow the result, including the costs of two
counsel
The
Order
1.
The application is dismissed.
2.
The award of the tender to Vodacom is declared to free of any
irregularities.
3.
The contract concluded between Transnet and Vodacom pursuant to the
award of the tender was validly
concluded.
4.
The Applicant shall bear the costs of both Respondents, including the
costs of two counsel.
_______________________________
Roland
Sutherland
Judge
of the High Court
Gauteng
Local division, Johannesburg
Hearing:
14 June 2018
Judgment:
18 June 2018
For
Applicant:
Adv
T. Motau SC,
with
him, Adv L. Kutumela and Adv H. Rajah,
instructed
by Werksmans.
For
First Respondent:
Adv
P. Kennedy SC,
with
him Adv T. Manchu,
instructed
by Motsoeneng Bill.
For
Second Respondent:
Adv
M. Chaskalson SC,
with
him Adv R. Tshetlo,
instructed
by Edward Nathan Sonnenbergs Inc.
[1]
It is likely that stages
1 and 2 were performed in parallel. The papers are ambivalent about
the stage at which MTN was disqualified.
It was unclear if MTN was
disqualified at stage 1 for a failure to be administratively
responsive because it failed to ‘duly
complete’ a
returnable document, or at stage 2 for breaching bullet no 4, which
required, for substantive responsiveness,
a bidder to have submitted
a bid which: ‘…contains a priced offer (completed
pricing schedule with the settlement
and without the settlement)
populated in alignment to the notes to pricing”. There is no
practical difference to the plight
in which MTN placed itself and it
is unnecessary to resolve that anomaly, as the letter notifying MTN
made clear what the reason
was for disqualification.
[2]
Pleadings
Bundle,
P126,
annex FA4 to FA.
[3]
Pleadings bundle, page
106.
[4]
Pleadings bundle, page
108.
[5]
Pleadings Bundle,
Page 135-136, annex FA4
to FA.
[6]
Pleadings
Bundle,
Page
178.
[7]
Pleadings bundle page 62.
[8]
Letter of 10 March 2017;
Pleadings bundle, page 288 reads thus:
“ …
The
cancellation of the tender is consistent with Section 3A, clause E
of the [RFP]’s document which states….respondents
are
required to complete all the green blocks in the pricing schedule
below. Failure to do so will result in disqualification”
in
this regard your bid failed to complete all the required information
in the pricing schedule as contained in the aforementioned
section
of the RFP document. This was a mandatory document which if not
fully and duly completed
will
result in a disqualification of the bid.”
[9]
The earlier RFP;
Pleadings Bundle, page 204, reads thus:
(c)
To facilitate like for like comparison bidders must submit pricing
strictly in accordance with this pricing schedule and not
utilse a
different format. Deviation from this pricing schedule
could
result in a bid being declared nonresponsive;
(e)
respondents are required to complete all the green blocks in the
pricing schedule below. Failure to do so
will
result in
disqualification.
[10]
RULE
53 record: para 6.3
Page
883, in Vol 8 of 16
[11]
Rule 53 Record: Page 1090 ff, in vol 11 of 16,
“M” ie, the ‘technical clarifications received
from bidder’
[12]
See:
Para
8.6 of the RFP, Pleadings bundle p61, Annex FA.1.1 to FA
[13]
Section 3 is found in Bundle C, Vol 3 of 10, at page 216
[14]
Cited
above in paragraph 2 of the judgment.
[15]
Bundle C, Vol 4 of 10,
pages 323ff.