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[2013] ZASCA 29
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AllPay Consolidated Investment Holdings (Pty) Ltd and Others v CEO of the South African Social Security Agency and Others (678/12) [2013] ZASCA 29; [2013] 2 All SA 501 (SCA); 2013 (4) SA 557 (SCA) (27 March 2013)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 678/12
Reportable
In the matter between:
ALLPAY CONSOLIDATED INVESTMENT
HOLDINGS (PTY) LTD
.........................................................
First
Appellant
ALLPAY FREE STATE (PTY) LTD
................................
Second
Appellant
ALLPAY WESTERN CAPE (PTY) LTD
...........................
Third Appellant
ALLPAY GAUTENG (PTY) LTD
.....................................
Fourth
Appellant
ALLPAY EASTERN CAPE (PTY) LTD
..............................
Fifth
Appellant
ALLPAY KWAZULU-NATAL (PTY) LTD
........................
Sixth Appellant
ALLPAY MPUMALANGA (PTY) LTD
.........................
Seventh
Appellant
ALLPAY LIMPOPO (PTY) LTD
......................................
Eighth
Appellant
ALLPAY NORTH WEST (PTY) LTD
................................
Ninth
Appellant
ALLPAY NORTHERN CAPE (PTY) LTD
........................
Tenth Appellant
MICAWBER 851 (PTY) LTD
.........................................
Eleventh
Appellant
MICAWBER 852 (PTY) LTD
...........................................
Twelfth
Appellant
MICAWBER 853 (PTY) LTD
......................................
Thirteenth
Appellant
MICAWBER 854 (PTY) LTD
.....................................
Fourteenth Appellant
and
THE CHIEF EXECUTIVE OFFICER OF
THE
SOUTH AFRICAN SOCIAL SECURITY
AGENCY
...............................................................................
First
Respondent
THE SOUTH AFRICAN SOCIAL
SECURITY
AGENCY
...........................................................................
Second
Respondent
CASH PAYMASTER SERVICES (PTY)
LTD
...............
Third Respondent
EZIBLUBHEDU INVESTMENT
HOLDINGS
(PTY) LTD
.........................................................................
Fourth
Respondent
FLASH SAVINGS AND CREDIT
COOPERATIVE
..................................................................
Fifth
Respondent
ENLIGHTENED SECURITY FORCE
(PTY) LTD
............................................................................
Sixth
Respondent
MOBA COMM (PTY) LTD
...........................................
Seventh
Respondent
EMPILWENI PAYOUT SERVICES
(PTY) LTD
..........................................................................
Eighth
Respondent
PENSION MANAGEMENT (PTY) LTD
.........................
Ninth Respondent
MASINGITA FINANCIAL SERVICES
(PTY) LTD
..........................................................................
Tenth
Respondent
THE SOUTH AFRICAN POST OFFICE
...................
Eleventh Respondent
ROMAN PROTECTION SOLUTIONS CC
.................
Twelfth Respondent
UBANK LIMITED
.....................................................
Thirteenth
Respondent
AFRICAN RENAISSANCE INVESTMENT
MANAGEMENT (PTY) LTD
..................................
Fourteenth
Respondent
STANDARD BANK GROUP LIMITED
....................
Fifteenth Respondent
NEW SOLUTIONS (PTY) LTD
..................................
Sixteenth
Respondent
ITHALA LIMITED
..................................................
Seventeenth
Respondent
KTS TECHNOLOGY SOLUTIONS
CONSORTIUM
..........................................................
Eighteenth
Respondent
Neutral citation:
AllPay
Consolidated Investment Holdings & others v The Chief Executive
Officer of the South African Social Security Agency &
others
(678/12)
[2013] ZASCA 29
(27 March 2013)
Coram:
NUGENT, PONNAN,
THERON, PETSE JJA and SOUTHWOOD AJA
Heard:
15 FEBRUARY 2013
Delivered: 27 MARCH 2013
Summary: Public tender –
whether irregularities invalidating contract – whether remedy
to be granted if contract had
been invalid.
___________________________________________________________
ORDER
___________________________________________________________
On appeal from North Gauteng High
Court (Matojane J sitting as court of first instance).
1. The appeal is dismissed with
costs.
2. The cross-appeal is upheld
with costs. The orders of the court below are set aside and
substituted with an order dismissing the
application with costs.
3. Both in this court and in the
court below the costs are to include the costs of three counsel where
three counsel were employed.
___________________________________________________________
JUDGMENT
___________________________________________________________
NUGENT JA (PONNAN, THERON, PETSE
JJA and SOUTHWOOD AJA CONCURRING)
[1] This is yet another case
concerning a public tender. On this occasion the tender was for the
payment of social grants. The body
that invited the tenders was the
South African Social Security Agency (SASSA) established under Act 9
of 2004. SASSA and its chief
executive officer are the second and
first respondents respectively. The contract was awarded to Cash
Paymaster Services (Pty)
Ltd (CPS) – the third respondent.
AllPay Consolidated Investment Holdings (Pty) Ltd – the first
appellant – also
tendered but was unsuccessful.
[2] Aggrieved at the award of the
contract AllPay and various associated companies
1
–
I will refer to them
collectively as AllPay – applied to the North Gauteng High
Court for orders setting aside the decision
to appoint CPS and the
contract that followed upon that decision. The relief sought was
amended in the course of the hearing before
the court below and I
deal with that later in this judgment. For the moment it is
sufficient to say that the court below (Matojane
J) declared ‘the
tender process [to be] illegal and invalid’ but also ordered
that ‘the award of the tender to
[CPS] is not set aside’.
AllPay now appeals the latter order and CPS cross-appeals the former
order, in both cases with the
leave of that court.
[3] It is as well at the outset
to clear the atmosphere in which this case has been conducted so as
to have certainty on what is
before us.
[4] Whatever place mere suspicion
of malfeasance or moral turpitude might have in other discourse it
has no place in the courts
– neither in the evidence nor in the
atmosphere in which cases are conducted. It is unfair if not improper
to impute malfeasance
or moral turpitude by innuendo and suggestion.
A litigant who alleges such conduct must do so openly and
forthrightly so as to
allow the person accused a fair opportunity to
respond. It is also prejudicial to the judicial process if cases are
adjudicated
with innuendo and suggestion hovering in the air without
the allegations being clearly articulated. Confidence in the process
is
built on transparency and that calls for the grounds upon which
cases are argued and decided to be openly ventilated.
[5] The affidavits of AllPay
evoke suspicion of corruption and dishonesty by innuendo and
suggestion but without ever making the
accusation directly and to a
degree that has carried over to the heads of argument filed on its
behalf. To clarify the position
AllPay’s counsel was asked at
the outset of the hearing whether corruption or dishonesty was any
part of its case, and that
was unequivocally disavowed. It confined
its case to what were said to have been fatal irregularities and it
was on that basis
that the appeal proceeded.
[6] But there have been many
twists and turns in the case and there was to be another twist even
after the appeal had been heard.
Some three weeks after the hearing
there arrived, unannounced, an application on behalf of AllPay to
introduce further evidence
into the appeal. AllPay said that the
evidence establishes that the tenders were evaluated dishonestly. Its
explanation for its
earlier disavowal was that the evidence came to
hand in admissible form only after the appeal had been heard.
[7] It is the practice of this
court that parties may not file new material after the hearing of an
appeal without the leave of
the court. There must be finality in
litigation and finality comes for the litigants once the appeal has
been heard. That was conveyed
to the attorneys of all the parties and
they were directed to refrain from doing so. The response from
AllPay’s attorneys
was to ask our leave to file the application
formally. After reading the application we refused the request
because even on its
face, without hearing the other parties, there is
no possibility that the application could succeed. I give the reasons
for that
briefly.
[8] The evidence sought to be
introduced was an affidavit of a certain Mr Kay. He related a
clandestine meeting with Mr Tsalamandris
– an employee of SASSA
who had provided administrative assistance when the tenders were
evaluated – at a restaurant
a year ago. In preparation for the
meeting Mr Kay purchased a device with which he recorded their
conversation.
[9] On the same day, after the
conversation, Mr Kay wrote to the attorneys for AllPay. He told them
in broad terms what Mr Tsalamandris
had said and that he had a
recording of the conversation. About a month later an anonymous
account of the conversation was published
in a Sunday newspaper.
[10] AllPay’s attorneys
listened to the recording shortly before its final affidavit was
filed. They said ‘they understood
the position to be that Mr
Kay was, at least at that stage, not willing for the content of the
recording to be made public or placed
before the court’ and for
that reason the recording was not tendered in evidence. What was
tendered instead was the newspaper
article reporting the
conversation, which was in due course struck out on the grounds that
it was hearsay.
[11] There the matter rested
until after the hearing of the appeal, when Mr Kay was asked, for the
first time, to depose to an affidavit,
which he readily agreed to do.
I will not attempt to decipher the opaque reasons given for why Mr
Kay was asked for an affidavit
after the appeal had been heard.
[12] I am not aware of any case
in which this court has admitted new evidence after an appeal has
been heard. Be that as it may,
even if the application had been
brought before the appeal was heard we would certainly have refused
it.
[13] It has been said many times
that new evidence will be admitted on appeal only where the
circumstances are exceptional. There
would need at least to be an
acceptable explanation for why the evidence was not placed before the
court below. In this case we
would also need an acceptable
explanation for why the application was not brought before the
hearing of the appeal. So far as that
is concerned, at no time before
the appeal was heard did AllPay even ask Mr Kay to depose to an
affidavit. An explanation is given
for why it did not do so when
filing its affidavits in the court below, but AllPay gives no clear
and forthright explanation for
not having asked him before the
appeal. On that ground alone the application would have failed.
[14] But that is the least of the
difficulties. It is also trite that the evidence would need to be
‘weighty and material’.
2
In
S
v N
3
Corbett JA pointed out that in
the vast majority of cases new evidence has not been allowed, and
where it has been allowed the evidence
has related to a single
critical issue. In this case if the evidence were to be admitted the
parties might just as well start the
case over again. What is now
sought to be introduced is a case entirely at odds with the case that
was presented. What is more,
far from being weighty, the evidence
carries no weight at all, and would not be admissible even if it had
been deposed to by Mr
Tsalamandris himself.
4
[15] The transcript discloses no
admissible evidence of dishonesty. Some facts alleged by Mr
Tsalamandris were not within his personal
knowledge – he said
that they were told to him by someone whose identity is not
disclosed. Those allegations are hearsay
that would not be admitted
into evidence on any ground.` The remaining facts he disclosed were
largely disclosures of what occurred
in the process of evaluating the
tenders, which are now disclosed in the voluminous record. For the
rest the allegations of dishonesty
made by Mr Tsalamandris were all
inferences he drew from those facts. Inferences drawn by a lay
witness are no more than expressions
of his or her opinion that are
not admissible in a court. It is for the court and not a lay witness
to decide what inferences should
properly be drawn from established
facts.
[16] It needs to be borne in mind
that the conversation took place a year ago before the record of the
evaluation process was produced
in this case. What occurred at the
meeting is that Mr Tsalamandris related to Mr Kay some of the events
that had occurred, made
allegations of dishonesty by inference from
the facts he disclosed, and invited Mr Kay to seek out evidence to
establish those
facts. The tenor of the conversation is captured by
his statement that ‘if you put all these little pieces together
you’ll
see’. Most of those ‘little pieces’
are now a matter of record, some will be in the knowledge of AllPay
if the
events occurred, but have not been advanced, and others were
capable of being established over the year the allegations have been
known to AllPay. It is extraordinary that AllPay should disavow
dishonesty and then think to place inferences before us through
the
mouth of Mr Tsalamandris.
[17] But in any event AllPay’s
advisers seem to overlook that the proceedings before us were brought
on application. Final
orders are granted in application proceedings
only on undisputed facts.
5
I think it can be safely assumed
that the inferences of dishonesty drawn by Mr Tsalamandris will be
denied by the other parties
– anything else would fly in the
face of everything they have said in this case – in which event
they would be irrelevant
to the adjudication of the case.
[18] I do not think it is
necessary to set out further reasons why the application could not
possibly succeed. If proper evidence
of corruption or dishonesty were
ever to emerge I am sure AllPay’s advisers are capable of
advising it on remedies it might
have. For the present I think we
should put aside the diversion and continue to decide the case that
was presented, in which dishonesty
was disavowed.
[19] A criticism levelled by
AllPay against SASSA highlights how a case of this kind ought not to
be approached. In the heads of
argument filed on its behalf AllPay
took SASSA to task for what was said to be its ‘unseemly and
spirited defence of CPS
as its preferred candidate’. In the
affidavits filed on its behalf it referred to SASSA’s ‘partisan
stance’.
Those criticisms cast the case as a squabble between
competitors as to who should have the bone, from which SASSA should
keep out.
Nothing could be further from the truth. Public procurement
is not a mere showering of public largesse on commercial enterprises.
It is the acquisition of goods and services for the benefit of the
public. What is under attack in this case is SASSA’s
performance of that duty on behalf of the public. The interests of
SASSA and those of the public are as material to this case as
those
of AllPay and CPS. When making any value judgments that might be
required in this case those interests must also be brought
to
account.
[20] The procurement of goods and
services by the state and other public entities is subject to various
legal constraints. Section
217(1) of the Constitution requires all
organs of state, when they contract for goods or services, to do so
‘in accordance
with a system which is fair, equitable,
transparent, competitive and cost effective’. That is taken up
in the
Public Finance Management Act 1 of 1999
, which provides in
s
51(1)(a)
(iii)
that the accounting authority of a public entity
(which includes SASSA) ‘must ensure that the public entity …
has
and maintains an appropriate procurement and provisioning system
which is fair, equitable, transparent, competitive and cost
effective’.
It has also been held that public procurement
constitutes ‘administrative action’ as contemplated by
the Promotion
of Administrative Justice Act 3 of 2000 (PAJA) and must
comply with the provisions of that Act.
[21] There will be few cases of
any moment in which flaws in the process of public procurement cannot
be found, particularly where
it is scrutinised intensely with the
objective of doing so. But a fair process does not demand perfection
and not every flaw is
fatal. It was submitted that the process of
procurement has a value in itself, which must lead to invalidity if
the process is
flawed irrespective of whether the flaw has
consequences, and extracts from various cases were cited to support
that proposition.
I do not think it is helpful to extrapolate from
selected statements made in cases decided in a different context. The
cases from
which the extracts were drawn did not concern the process
of tendering. I have pointed out that the public interest has a role
to play in cases of this kind. It would be gravely prejudicial to the
public interest if the law was to invalidate public contracts
for
inconsequential irregularities.
[22] Before turning to the course
the case has taken and the issues that arise it is convenient to
outline the background against
which the contract was concluded, and
the process that culminated in this contract.
[23] The state pays about 15
million social grants of one kind or another to about 10 million
recipients each month.
6
At one time the task of paying
those grants was the responsibility of the various provincial
authorities. SASSA was established
to bring the payment of social
grants under a single umbrella. What SASSA inherited when the
responsibilities of the provincial
authorities were assigned to it
was described in its affidavits as ‘disintegrated social
security systems, lack of uniform
grant administration processes,
ineffective IT systems and interfaces, costly administration fees,
fraud and corruption, and poor
management of outsourced payment
services’.
[24] At the time SASSA inherited
its responsibilities most grants were being paid in cash by
contracted service providers. Transporting
large sums of cash to
numerous payment points, some located deep in the rural countryside,
presents substantial security risks
in itself. If the money reaches
its destination there is then the risk that payments might be claimed
by people not entitled to
grants, or in the name of beneficiaries who
are no longer alive. When millions upon millions of rand are being
paid out in social
grants it goes without saying that there is the
potential for enormous loss from conduct of that kind.
[25] Some risks can be reduced if
payments are made electronically through the banking system but that
presents other challenges.
Banking is foreign to many recipients of
social grants and their introduction to the banking system can be a
cumbersome process.
SASSA also needs to be certain that the bank
accounts to which grants are paid are authentic and that the
beneficiaries concerned
are still alive. There is also a need for
proper management information; there must be a proper means of
accounting for the payments
that are made; and so on.
[26] If an electronic payment
system is capable of overcoming those challenges it is the preferred
method of paying grants. At the
time SASSA inherited its
responsibilities about 37 per cent of grants were being paid
electronically through the banking system
by arrangement with the
various banks. One of SASSA’s objectives was to encourage cash
recipients to convert to electronic
payment.
[27] The invitation to tender –
referred to as a Request for Proposals (RFP) – was directed at
identifying service providers
who would pay social grants on SASSA’s
behalf. The RFP had no fixed specification but instead invited
solutions that would
meet various stated objectives within certain
parameters. There were a number of subsidiary elements to the service
that was required
– like providing adequate facilities for
those recipients who queued to receive cash payments – but it
was directed
primarily at finding a payment solution that was
convenient to recipients and limited the risk of theft and fraud.
[28] The RFP identified the scope
of the work to be provided with reference to what were called
‘performance areas’
that were described as:
‘
Enrolment
of eligible Beneficiaries, Grant Recipients and Procurators;
Issuance of
Beneficiary Payment Cards;
Payment of grants;
Provision of
management information, including reconciliation of payment Data and
the provision of adequate security during the
entire payment
process;
The provision of
adequate infrastructure at Pay-Points; and
Phase-In Phase-Out
Plan.’
[29] An effective means for
avoiding theft and fraud in the payment process is to match payments
against beneficiaries and recipients
with reference to his or her
unique biological features – referred to in the papers as
‘biometric verification’
– typically his or her
fingerprints or voice. The RFP made it abundantly clear in various
places that a solution that embodied
those features would carry
considerable weight. Thus with reference to the registration of
beneficiaries it recorded that
‘
the
intention of SASSA is to have all the Beneficiaries, irrespective of
the method through which they receive their Grants, to
be
Biometrically identified’.
It went on to provide:
‘
The
minimum acceptable requirement during bulk and on-going enrolment is
that all ten finger prints of Beneficiaries must be captured.’
It recorded that the biometric
data captured during enrolment
‘
will
be used for matching and authenticating during payment process. The
proposed solution must therefore allow or enable these
business
functions…. Biometric Data processing must allow one to many
matching during enrolment and payment processing stages….
The
enrolment Data will further be used to enable the life certification
process and will become implicit during payments.’
So far as the ‘payment
solution’ being sought was concerned the RFP provided:
‘
3.3.1
Payment Services of Social Grants must be secured, preferably,
Biometric based. The Bidder’s Proposal should provide
detail on
the measures that the Bidder/s will put in place to ensure that the
right person is paid the correct amount.’
I return to that clause later in
this judgment.
[30] The process that was
employed for receiving and evaluating bids appears from the RFP
supplemented by other documents that form
part of the record.
[31] The process required sealed
bids to be submitted by a specified date. Bids were to be submitted
in what was called a ‘two
stage envelope system’. That
required documents setting out the ‘technical and functional’
elements of the proposal
(I will refer to that simply as the
technical proposal) to be sealed in one envelope, and the ‘financial
proposal and preferential
points documents’
7
to be sealed in another envelope.
[32] Bidders were invited to
submit bids for any number of provinces. If bids were made for
multiple provinces then each bid was
to be submitted separately. That
was stated in the RFP as follows:
‘
Bidder’s
may submit Proposals in respect of one or more Provinces specified in
this RFP [all nine provinces were specified].
Each bid (per
Province) must be submitted separately. For example, if Bidding for
two Provinces, submit two separate bids’.
[33] Once bids had been submitted
there would be a compulsory briefing session ‘where questions
of clarification and/or queries
concerning the requirements of this
RFP will be addressed’. The briefing procedure envisaged that
bidders would submit written
questions by a specified date and that
‘responses and clarity to questions received’ would be
provided at the briefing
session.
[34] Treasury regulations on
state acquisitions required tenders to be evaluated by a bid
evaluation committee (BEC) and a bid adjudication
committee (BAC).
The regulations required the state entity concerned to have a system
for constituting those committees. The system
employed by SASSA was
contained in an internal circular issued by the Chief Financial
Officer that directed how the committees
were to be constituted and
set out in some detail their functions and how those functions were
to be performed.
[35] Bids would first be screened
for compliance with the administrative requirements of the RFP. Those
that survived would then
be evaluated by the BEC, which would report
and make recommendations to the BAC. The BAC would in turn make
recommendations to
the Chief Executive Officer, who was authorised to
conclude a contract.
[36] There are cases in which the
value to be had from goods or services is a compromise between their
quality and their price.
In such a case both elements would be
weighed against one another simultaneously to reach the appropriate
compromise. In this case
bids were to be evaluated in two distinct
stages, which demonstrates that the merit of the technical solution
was foremost in SASSA’s
mind. Bids were first to be evaluated
on the merit of the technical solution offered, without sight of the
financial and preference-point
proposals. Only solutions that crossed
a substantial threshold – they needed to score 70 per cent –
would proceed to
be evaluated on their financial and
preference-points merit. The way that was expressed in the RFP was
that
‘
bids
will be evaluated against the solution criteria to determine whether
or not these comply with the specified solution requirements.
Depending upon the level of compliance, proposals will be accorded a
scoring of 1 to 5 in line with the set criteria. Only bids
that
attain a minimum score of 70% of the total technical/functionality
criteria will be considered for further evaluation for
the financial
and preference Points.’
[37] That does not mean that
bidders who crossed the technical threshold would be at large so far
as cost was concerned. The fee
that SASSA was willing to pay was
capped at R16.50 per transaction – a little more than half the
average fee of R30 per transaction
it was then paying.
[38] The RFP listed five criteria
– with a number of sub-criteria in each case – against
which the proposals would be
scored. Once scored on a scale of 1 to 5
the scores would be weighted in calculating the overall percentage
score. The weight attached
to each of the criteria makes it clear
that SASSA’s primary concern was the solution offered for
enrolment and payment. The
five criteria, with the weight of each
reflected in brackets, were ‘enrolment solution’ (25 per
cent), ‘payment
solution’ (40 per cent), ‘security
services’ (15 per cent), ‘phase-in phase-out’ (10
per cent), and
‘risk mitigation’ (10 per cent)’.
The enrolment and payment solutions offered would thus contribute 65
per cent
towards the target score of 70 per cent.
[39] The RFP envisaged that the
evaluation of the bids would not necessarily be confined to
evaluating the written documents. It
provided that
‘
bidders
who submit proposals in response to this RFP may be required to give
an oral presentation, which may include but is not
limited to an
equipment/service demonstration of their proposed solution/s to SASSA
…. Demonstrations and presentations
will be restricted to
bidders that have obtained the minimum score of 70 % of the
technical/functional evaluation phase ….
Presentations and
demonstrations will be afforded [so as to allow] the bidders an
opportunity to clarify or elaborate upon their
proposals. It should
be noted that this phase should not be construed as contractual
negotiations or submissions of material not
submitted with the
original proposal or be construed as an opportunity to change amend
or vary the technical/functional solution.’
[40] The implication of that
process is that some proposals might be so unmeritorious that they
could be disqualified immediately.
Others might be scored
provisionally at 70 per cent or more, which would be subject to
reassessment after the bidder had presented
the proposal orally.
[41] Twenty one bids were
received by the closing date. One was disqualified immediately and
the remainder were referred to the
BEC for evaluation. According to
the report of the BEC bids were at first scored by each member
independently. The various scores
were then captured on a spreadsheet
and discussed where necessary, particularly if there were large
discrepancies.
[42] The bids were evaluated over
a period of seven days. Both AllPay and CPS bid for all nine
provinces. The evaluators scored
the solution that was proposed by
each and applied that score across all the provinces. After an
initial evaluation over six days
AllPay was given an overall score of
70.42 per cent and CPS was ahead of it at 79.79 per cent. The other
bidders fell short and
were disqualified from further evaluation.
[43] AllPay and CPS were then
called to present their respective proposals orally. After the
presentations CPS’s score increased
to 82.44 per cent and
AllPay’s score fell to 58 per cent, disqualifying it from the
next evaluation stage. Satisfied with
the CPS proposal on its
financial
8
and preference-points merits the BEC recommended to the BAC, in a
lengthy report, that it be awarded the contract for all nine
provinces. The BAC accepted the recommendation and conveyed that to
the Chief Executive Officer who concluded a contract for five
years
with CPS on 3 February 2012. The contract required CPS to commence
its service on 1 April 2012.
[44] What confronts one at every
turn in this case are certain undisputed facts that are material to
all the arguments that have
been advanced. The technical solution
offered by CPS was considered by SASSA to be superior to that offered
by AllPay in a material
respect. The CPS solution was able to
biometrically verify that every payment of a grant was made to an
authentic beneficiary,
at the time it was made, irrespective of the
method of payment. The AllPay solution was not able to do that.
AllPay was able to
biometrically verify cash payments, but was able
to verify the authenticity of beneficiaries paid electronically only
once a year.
[45] In various parts of its
affidavits SASSA described the position as follows:
‘
[T]he
solution presented by AllPay did not make adequate provision for
biometric verification and the standardisation of services.
This, in
short, is the reason why the tender was not awarded to AllPay …
…
The solution offered
by [CPS] had the following important quality. It provided a uniform
and equal facility for all beneficiaries,
a uniform smartcard for all
beneficiaries and applied to cash payments as well as electronic
payments.
…
Additionally and
importantly, the solution provides for biometric verification at all
stages when payment is made to the beneficiary.
By biometric
verification is meant finger and or voice recognition at the payment
stage. AllPay’s solutions on the other
hand provide different
solutions for different categories of beneficiaries ….
…
The difficulty with
AllPay’s solution lies in the fact that its verification
solution does not provide for authentication
of banked beneficiaries.
In other words, it continues to perpetuate the mischief [of fraud and
theft] sought to be addressed in
the prevailing situation, and which
was pertinently addressed by the CPS proposal. AllPay’s
fundamental difficulty is that
it has no solution for proper
authentication of the banked beneficiary … Moreover,
beneficiaries are treated unequally in
that a cash beneficiary has no
flexibility to transfer to a banked system, and if he/she, after an
arduous process does so, does
not have the comfort of security
arising from AllPay’s inadequate solutions.
…
AllPay was
unsuccessful in the bid because it lacked the expertise relating to
enrolment solution and payment solution – the
determinative
criteria in evaluating a system sought by [SASSA] and which contained
the essential elements to address the mischief
of abuse by claimants
for social grants who do not qualify’
.
[46] Indeed, the undisputed
evidence is that ‘the CPS solution as offered in its bid meets
every single requirement stipulated
in the RFP and addresses all the
concerns raised by SASSA’ and the AllPay solution did not, and
that is why CPS was awarded
the contract.
[47] It is not disputed that both
bidders were treated equally throughout the process, whatever might
have been its flaws. There
is also no suggestion that that it was
irrational, or unreasonable, or unlawful, for SASSA to want the
solution that was offered
by CPS in preference to that offered by
AllPay. The most that AllPay was able to say was that its alternative
solution could have
won the day on its financial proposals had it
proceeded to that evaluation stage. AllPay was not able to say that
its proposal
would indeed have proceeded to that stage absent the
alleged irregularities that form the subject of its complaints.
[48] With that background I turn
to AllPay’s complaints. Most were upheld by the court below but
its reasons for doing so
did not materially elaborate upon the
submissions made on behalf of AllPay and for that reason I do not
refer to them each time.
[49] The case advanced by AllPay
has shifted from time to time but there comes a point in litigation
when litigants must fix their
colours to the mast. AllPay did that in
the heads of argument filed on its behalf. The case it advanced was
presented under five
headings and I deal with each in turn, in the
chronological order in which the material events occurred.
THE COMPLAINTS
The Alleged Failure to Submit
Separate Provincial Proposals
[50] I indicated earlier that the
RFP required a bidder who was bidding for multiple provinces to
submit separate bids for each
province. Clearly what SASSA had in
mind was that it would not consider bids that were open for
acceptance only for multiple provinces
or not at all.
[51] Both AllPay and CPS
submitted bids for all nine provinces. AllPay alleges that the CPS
bids were not separated for each province
in conflict with the
requirements of the RFP. It was submitted that it was unfair to
AllPay to accept the bids in that form. Why
that was so was not
developed and I cannot see why that should be. No doubt the exclusion
of CPS on that basis would have benefited
AllPay but that is not what
we mean by unfairness. The objection that was pressed more strongly –
at least in the heads of
argument – was that irregularity in
the process is fatal for that reason alone – the general
submission I referred
to earlier that process has value as an end in
itself. I do not need to consider that because there was no
irregularity.
[52] It is not correct that CPS
did not submit separate bids for each province as contemplated by the
RFP. Its bid documents read
together with the conditions for
acceptance in the RFP make it perfectly clear that it was open to
SASSA to accept its bid for
any one or more provinces, which was the
objective of the requirement. What occurred is only that CPS
submitted one copy of its
technical proposal that was to be applied
to all the provinces.
[53] I do not think the RFP is to
be construed as requiring a bidder who offered the same solution for
all provinces to duplicate
the document nine times. Commercial
documents must be construed in a businesslike manner and that would
not be a businesslike construction.
There is no merit in this
complaint.
The Composition of the Bid
Evaluation Committee and the Bid Adjudication Committee
[54] The internal circular I
referred to earlier required a BEC to comprise at least five people
including a supply chain management
(SCM) practitioner. The BEC that
evaluated the bids in this case comprised only four members, none of
whom was an SCM practitioner.
[55] AllPay’s complaint is
that the BEC was not constituted in accordance with the circular and
for that reason its decisions
were invalid. For that contention it
relied upon
Schierhout v Union Government (Minister of Justice)
9
and other cases.
10
[56] Counsel’s reliance
upon
Schierhout
demonstrates why it is not helpful to cite
cases out of context. That case concerned the exercise of statutory
authority conferred
upon a defined body. It goes without saying that
in such a case only the body defined by the statute may lawfully
exercise the
authority. That was the same in
Acting Chairperson:
Judicial Service Commission.
It has no application in the present
case. The BEC was not a body constituted with statutory powers. It
was merely a group of people
brought together by SASSA to perform a
task on its behalf – just as its employees do every day.
Watchenuka
and
Ryobeza
concerned something quite
different and are not material.
[57] I do not understand the
submission to be that the defect in its composition rendered its
decisions unfair. Nor could such a
decision have been sustained. The
composition of a BEC was a matter within the discretion of SASSA. If
the circular had required
only four members without an SCM
practitioner – which was its composition in this case –AllPay
could hardly have said
that was unfair.
[58] I understand the objection
to be, once again, that because the composition of the BEC was in
conflict with the circular it
was irregular, and for that reason
alone its decisions were invalid. I do not see how that can be. An
act is not ‘irregular’
for purposes of the law simply
because one chooses to call it that. An irregularity that leads to
invalidity is one that is in
conflict with the law. It is because it
is in conflict with the law that it is not able to produce a legally
valid result.
[59] We were referred to no law
that requires a BEC to be constituted in a particular way. We were
referred only to the circular,
which was not a legal instrument. It
was no more than an internal document recording SASSA’s
standard policy. Perhaps it
was an internal ‘irregularity’
but it was not an unlawful irregularity. There is no merit in this
complaint.
[60] The BAC comprised five
members that included Mr Mathebula from the National Treasury. Mr
Mathebula was not at the final meeting
at which the BAC accepted the
recommendations of the BEC. His absence, so it was submitted, was
fatal to the BAC’s decision.
[61] In support of that
submission counsel relied again on
Schierhout
,
and on
Yates v
University of Bophuthatswana.
11
[62] The second and third
meetings of the BAC were held on 9 and 25 November 2011 respectively.
After the earlier meeting Mr Mathebula
expressed various concerns to
the chairman that he thought required further consideration. The
chairman reported to the subsequent
meeting on 25 November that he
had met with Mr Mathebula and had discussed and recorded his
concerns. He told the meeting that
Mr Mathebula had been aware that
the next meeting was scheduled for 25 November and had assured the
chairman he would be present.
As it turned out, Mr Mathebula was
called elsewhere, and was absent from the meeting, to the annoyance
of the chairman.
[63] The transcript of the
meeting reflects that the remaining members were satisfied that they
could continue and they did so.
The concerns that had been raised by
Mr Mathebula were placed before the meeting by the chairman and
addressed in discussion with
the members of the BEC. It seems they
were satisfied with the responses and the BAC then recommended
acceptance of the BEC recommendation.
[64] Again
Schierhout
has no application. Nor does
Yates
,
in which the principle in
Schierhout
was applied in the context of a
contract and takes the matter no further.
12
There was no law (I can leave
aside a contract) that required a BAC to be constituted in a
particular way. But in this case it goes
further. It was pointed out
in
Schierhout
that the question whether all
members of a nominated body are required to be present when a
decision is taken is a matter for the
construction of the statute
concerned. Applying that to this case, not all members of the BAC
were required to be present when
a decision was taken. Its terms of
reference required a quorum of only three. There was no irregularity
as contemplated by law
– there was no irregularity at all –
and this complaint has no merit.
The Failure to Assess the BEE
Partners of CPS
[65] The bid of CPS reflected
that three black empowerment companies were to manage and execute
74.57 per cent of the contract value.
AllPay complains that the
capacity of the companies to perform ought to have been assessed
before awarding the contract.
[66] Counsel advanced this
complaint as if it was self-evident that the failure of the BEC to
assess the capacity of the three companies
was unlawful but it is
certainly not evident to me. SASSA was not required by law to assess
the companies. There is also no basis
for saying that its failure to
do so impacted unfairly on AllPay. Nor can it be said that its
failure to do so was irrational.
It had reasoned grounds for its
decision. It was alive to the risk of non-performance by the three
associated companies and felt
that the risk could be managed by
imposing appropriate contractual consequences upon CPS. It cannot be
said that that was not a
reasoned decision. One might question the
wisdom of its decision but the evaluation of the bid was its
prerogative and a court
cannot interfere only because it thinks its
decision was unwise. This complaint also has no merit.
Bidders Notice 2
[67] The RFP was announced on 15
April 2011 with 27 May 2011 the closing date for submissions, which
was later extended to 15 June
2011. The compulsory briefing session
was held on 12 May 2011.
[68] Meanwhile AllPay posed
various questions to SASSA and was told that they would be answered
at the briefing session. In its
founding affidavit AllPay complained
that certain of its questions were never answered but that was not
pursued before us and I
need say no more about it.
[69] It will be recalled that
various provisions of the RFP reflected that SASSA placed great store
on biometric verification of
payments.
13
One such provision was clause 3.3.1, which said that ‘Payment
Services of Social Grants must be secured, preferably, Biometric.’
The store that SASSA placed on biometric verification was announced
again in a notice that was issued to all bidders shortly before
the
closing date that has been referred to as Bidders Notice 2. The
notice stated its purpose to be ‘to give final clarity
on
frequently asked questions’. Amongst other things, the notice
stated the following, under the heading ‘Registration
(Enrolment)’:
‘
A
Successful Bidder must register all Beneficiaries in a Province that
has been awarded to the Successful Bidder, regardless of
the Payment
Methodology. A one to many biometric search must be conducted at the
time of registration to ensure that a Beneficiary
is not added to the
database more than once’
.
[70] On the day the notice was
issued AllPay wrote to SASSA motivating a request for consideration
to be given to extending the
closing date for the submission of bids.
The letter said nothing of that portion of Bidders Notice 2 that I
have referred to. On
14 June 2011 SASSA announced that in response to
numerous requests the closing date was extended to 27 June 2011. That
meant bidders
had seventeen days from the time the notice was issued
to submit their bids.
[71] I do not need to examine the
language of the two provisions. It has been accepted throughout this
case that whereas clause
3.3.1 informed bidders that a solution
offering biometric verification when payments were made, by whatever
means, would be ‘preferable’,
the effect of Bidders
Notice 2 was to inform them that only a solution having that feature
would do. As it was expressed in argument
at times, such a solution
was ‘mandatory’ under Bidders Notice 2.
[72] There was much debate on
whether Bidders Notice 2 ‘amended’ the RFP – which
AllPay said it did – or
whether it merely ‘clarified’
the RFP – which SASSA said it did – but it seems to me
that it is sterile
to debate its correct classification. It is more
helpful to examine what effect it had.
[73] Bidders Notice 2 did not
change what had been asked for in the RFP. It merely narrowed the
range from which SASSA would choose.
Whereas bidders had been told
before that a solution allowing biometric verification of all
payments would be chosen above a solution
that did not have that
feature, Bidders Notice 2 now told those who had only the latter
solution that they need not bid at all
because their solution would
not be chosen.
[74] Bidders Notice 2 made a
difference to bidders only if they did not have the mandatory
solution and were bidding against others
who also did not have that
solution. Before Bidders Notice 2 their bids would have been
considered. After Bidders Notice 2 their
bids would be rejected. But
it made no difference to such a bidder who was in competition with a
bidder who did have the mandatory
solution. In that competition
bidders were told by clause 3.3.1 that the mandatory solution would
be chosen above other solutions.
Bidders Notice 2 placed the bidder
in no worse position. His or her solution would not have been chosen
in any event. The notice
informed the bidder only that he or she need
not bid at all.
[75] In this case it is not
disputed that AllPay did not offer the mandatory solution and that
CPS did. On a proper application
of the RFP SASSA was bound to accept
the CPS solution in preference to that of AllPay even without Bidders
Notice 2. That is what
clause 3.3.1 had announced it would do.
Indeed, it seems to me that had it accepted the AllPay solution CPS
might have had good
grounds to complain.
[76] There is a second problem
that confronts AllPay so far as Bidders Notice 2 is concerned. If the
mandatory solution had been
announced in the RFP none of its present
complaints could have been raised. Yet it indeed bid with notice that
it was mandatory.
One might ask, then, in what way it was prejudiced
by the issue of the notice? Three contradictory answers are proffered
in its
affidavits.
[77] At one point it said that
‘it could, had it been informed [that a biometric solution was
required], have amended its
proposal to take account of the new
requirement’, implying that it was not informed. In the
following paragraph it said that
‘had it been made clear that
SASSA’s tender now required monthly authentication by way of
voice recognition, it would
have been a relatively simple matter for
it to adapt its offer accordingly’. In an affidavit that was
filed later AllPay
proffered yet a third explanation. It said that
the ‘the eleventh hour change was prejudicial as it now
required biometric
verification on payment as an inflexible
requirement, as such AllPay was not left with sufficient time to
adapt its proposal to
this fundamental shift’.
[78] None of those contradictory
explanations can carry any weight. Contrary to the first explanation
AllPay was indeed informed
– seventeen days before the closing
date – that a biometric solution was required. So far as the
second explanation
is concerned, AllPay wrote to SASSA on the day it
received the notice, voicing various queries, with no suggestion that
the meaning
of the relevant part of the notice was unclear. As for
the third explanation, AllPay said nothing to SASSA at any time,
whether
before or after it submitted its bid, to suggest that it had
wanted to amend its bid but had not been allowed sufficient time to
do so. Any suggestion that it could have provided the required
solution would in an event not be credible. Clause 3.3.1 made it
clear to all bidders that such a solution was preferred. Knowing that
such a solution would at least give it preference, AllPay
would
hardly have held that solution back if it had had one, even without
Bidders Notice 2.
[79] The true explanation for not
offering the required solution emerged at the oral presentation of
its proposal that I deal with
presently. When questioned on the
failure of its proposal to meet the requirements of Bidders Notice 2
none of the explanations
now given was advanced for why that was so.
AllPay’s response was that it was not able to provide the
required solution –
indeed, it said that such a solution was
not capable of being provided in South Africa.
[80] There are three essential
facts in this case that create a dilemma for AllPay that none of its
submissions address. First,
SASSA was entitled to have the solution
it required if that solution was available. Secondly, CPS offered
that solution. Thirdly,
AllPay was not able to do so. It seems to me
in the circumstances that Bidders Notice 2 is a red herring in this
case. Whatever
notice had been given, it was not able to comply.
[81] The submissions for AllPay
do not confront that dilemma but confine its case to one of process
irregularity that is said to
be fatal to the contract. I deal now
with those alleged irregularities so far as they concern Bidders
Notice 2.
[82] The first submission was
that SASSA was not entitled to alter the RFP after it had been
issued, for which counsel relied on
Minister of Social Development
v Phoenix Cash ‘n Carry
,
14
and
Premier, Free State v Firechem Free State (Pty) Ltd
.
15
It goes without saying that once bids have been submitted it is
unfair to evaluate them against altered criteria. As it was expressed
in
Firechem:
‘
.
. . [C]ompetitors should be treated equally, in the sense that they
should all be entitled to tender for the same thing. Competitiveness
is not served by only one or some of the tenderers knowing what is
the true subject of tender. One of the results of the adoption
of a
procedure such as Mr McNaught argues was followed is that one simply
cannot say what tenders may or may not have been submitted,
if it had
been known generally that a fixed quantities contract for ten years
for the original list of products, and some more,
was on offer.’
16
That is what those cases were
about. It is not what occurred in this case. Bidders Notice 2 was
issued seventeen days before the
closing date for bids.
[83] Then it was submitted that
Bidders Notice 2 had no effect because it did not meet the
formalities for amendments to the RFP
provided for in clause 14.6:
‘
Any
amendments of any nature made to this RFP shall be notified to all
Bidder/s and shall only be of force and effect if it is in
writing,
signed by the Accounting Officer or his delegated representative and
added to this RFP as an addendum.’
[84] The RFP served two
functions. One was to inform bidders what was required. The other was
to bind a contracting party to its
terms by incorporating it in the
contract. That was provided for in clause 4.1 of the General
Conditions of Contract, which provided
as follows:
‘
The
goods supplied shall conform to the standards mentioned in the
bidding documents and specifications’
.
[85] The purpose of clause 14.6
of the RFP was clearly to serve that contractual function for the
benefit of SASSA. It operated
to protect SASSA from claims of the
contractor that the bid documents had been informally amended. It was
not intended to play
any role in the informative function of the RFP
– nor could bidders ever have thought it would. So far as
Bidders Notice
2 purported to amend the RFP the amendment for that
purpose required no formality, just as answers to questions at the
compulsory
briefing session required no formality.
The Scoring of the Bids
[86] Once having been scored
provisionally the two bidders were invited to make presentations.
AllPay complains that it was given
short notice. It was telephoned at
19h00 on 5 Oct 2011 and told it must be in Cape Town on the morning
of 7 October. CPS was given
even shorter notice. It was telephoned at
22h15 the night before the presentations.
[87] Fairness cannot be evaluated
in the abstract. Whether a person acts fairly or unfairly depends
upon the situation with which
he or she is confronted. AllPay made no
complaint to the BEC that the notice given to it was inadequate. The
BEC can hardly be
said to have acted unfairly if it proceeded without
having been asked not to do so.
[88] AllPay was obviously unable
successfully to field questions concerning the absence from its
solution of biometric verification
for all payments because it was
not able to provide it. The best it could do was to suggest that it
would be capable of doing so
in the future. After the presentation
the two bids were allocated final scores. The provisional and final
scores that were given
to AllPay and CPS respectively for each of the
performance areas are depicted in the following tables. In the first
and third tables
the score for AllPay is in the left column and the
score for CPS is in the right column in bold. The second and fourth
tables reflect
the weighted accumulated scores as a percentage. The
abbreviations in those tables are: E = enrolment, P = payment, S =
security,
I/O = phase in/phase out, M = mitigation.
Before Presentations
Ramakgopa Magasela
Earl Nhlapo
Enrolment 3.60
3.60
3.76
3.96
2.88
3.36
2.92
3.88
Payment Solution
3.67
4.50
2.70
4.42
3.33
3.42
3.58
3.92
Security 4.10
3.95
4.00
5.00
4.00
3.80
4.00
4.05
Phase-in/out 3.83
4.50
3.67
5.00
3.50
3.17
3.67
3.67
Mitigation 4.00
5.00
4.00
4.00
4.00
4.00
4.00
4.00
E P S I/O M TOTAL
AllPay 16.45 26.56
12.08 7.34 8.00 70.42
CPS 18.50 32.52
12.60 8.17 8.00 79.79
After Presentations
Ramakgopa Magasela
Earl Nhlapo
Enrolment 3.60
3.60
2.32
3.96
2.72
3.36
1.84
4.56
Payment Solution
3.42
4.50
2.58
4.42
2.83
3.42
2.25
4.33
Security 4.10
3.95
3.60
5.00
4.00
3.80
2.30
4.25
Phase-in/out 3.83
4.50
2.33
5.00
3.50
3.17
2.17
4.33
Mitigation 4.00
5.00
3.00
4.00
4.00
4.00
3.00
4.00
E P S P M TOTAL
AllPay 13.10 22.16
10.50 5.915 7.00 58.675
CPS 19.35 33.34
12.75 8.50 8.50 82.44
[89] In its affidavits AllPay
took issue with the lowering of certain of the scores allocated by Ms
Nhlapo and Mr Magasela. It was
submitted that the final scores were
irrational. When pressed on the issue counsel could offer no reason
why the final scores were
irrational other than that they were
substantially lower than the provisional scores. Irrationality means
the absence of reason.
The fact alone that the scores were lowered,
even substantially, does not infer that they were not founded on
reason.
[90] Indeed, one does not need to
look far to find why the scores of AllPay decreased. The report of
the BEC recorded that the two
bidders ‘provided at face value
payment solutions that would meet SASSA’s requirements’
but that the two solutions
‘were substantially different in
certain critical elements of their solution’. For that reason
the BEC ‘decided
that the scores of the two bidders will be
accepted as preliminary scores pending presentations that would
clarify elements of
the payment solution’. I have already
observed that when tackled on elements of the payment solution AllPay
was not able
to provide answers. One would expect, then, that their
scores on those issues would be decreased materially. If there is
anything
remarkable in the scores it is only that those of Ms
Ramakgopa remained much the same.
[91] In reply counsel for AllPay
(who was not counsel who opened its case) pointed out that the record
reflects a decision of the
BEC that Bidders Notice 2 would be left
out of account when the provisional scoring was done, and that the
final scoring took account
of the notice. He submitted that to score
against different criteria on each occasion was irrational.
[92] I do not see why that should
be so. The provisional scores were perfectly rational if they were
reasoned against the criteria
of the RFP alone. So were the final
scores if they were reasoned against the criteria of Bidders Notice
2. The scores in each case
cannot be said to be irrational –
only that they were differently founded. The question is only whether
it was permissible
to score finally against the criteria of Bidders
Notice 2, which it was.
[93] Our attention was also
directed to certain sub-categories of the performance areas in which
scores unrelated to payment were
reduced. The explanations that were
advanced for that were said to be astounding. I do not think it is
necessary to relate the
detail of the payments and the explanations.
It is sufficient to say that we are not concerned with the quality of
the reasoning
but only with whether the decision was reasoned and not
arbitrary.
[94] Finally, it was submitted
that AllPay was treated unfairly because it was not told in advance
of the issues to be addressed
at the presentation and was not
afforded a hearing. At precisely what point it ought to have been
afforded a hearing was not made
altogether clear but I understand the
submission to be that it should have been informed that its
provisional score was to be reduced
and given an opportunity to
respond before that occurred. In support of the submission that it
was entitled to be told in advance
of the issues and to have a
hearing selected extracts dealing with natural justice were quoted
from numerous cases.
[95] Extracts from cases decided
in a different context are not generally helpful and that is so in
this case. The rules of natural
justice come into play when rights
are affected or the person affected has a legitimate expectation that
he or she will be heard.
That was the case at common law
17
and it remains the case under PAJA. No rights of AllPay were affected
by the decisions that were made – bidders do not have
a right
to a contract. Nor is there any basis upon which a bidder could be
said to have a legitimate expectation of being heard
in the course of
a tender evaluation. If what is contended for were to be required,
the evaluation of multiple tenders would be
interminable.
Conclusion
[96] When all is said and done
there is no escape from the facts I referred to earlier: SASSA was
entitled to have the solution
it required if that solution was
available. CPS was able to provide that solution. AllPay could not.
Absent all the alleged irregularities
of which AllPay complains SASSA
was entitled to award the contract to CPS. It seems to me that it
would be most prejudicial to
the public interest if inconsequential
irregularities alone were to be capable of invalidating the contract.
But I need not base
myself on that in this case. In my view there
were no unlawful irregularities. I think the court below was
excessively receptive
of the submissions made on behalf of AllPay.
Its order ought not to have been made and the cross-appeal must
succeed.
THE APPEAL
[97] In view of my decision on
the cross-appeal it is not strictly necessary for me to deal with the
appeal, but I think I should
say something about it, if only briefly.
[98] The dilemma that arises when
a contract is set aside was expressed by this court in
Millenium
Waste Management
,
18
and later in
Moseme Road Construction
,
19
but what was said in the former case bears repeating:
20
‘
The
difficulty that is presented by invalid administrative acts, as
pointed out by this court in
Oudekraal
Estates
,
is that they often have been acted upon by the time they are brought
under review. That difficulty is particularly acute when
a decision
is taken to accept a tender. A decision to accept a tender is almost
always acted upon immediately by the conclusion
of a contract with
the tenderer, and that is often immediately followed by further
contracts concluded by the tenderer in executing
the contract. To set
aside the decision to accept the tender, with the effect that the
contract is rendered void from the outset,
can have catastrophic
consequences for an innocent tenderer, and adverse consequences for
the public at large in whose interests
the administrative body or
official purported to act. Those interests must be carefully weighed
against those of the disappointed
tenderer if an order is to be made
that is just and equitable.’
[99] We need no evidence to know
the immense disruption that would be caused, with dire consequences
to millions of the elderly,
children and the poor, if this contract
were to be summarily set aside. The prospect of that occurring has
prompted the Centre
for Child Law to intervene as amicus curiae in
the case. We value the contribution they have made but they had no
cause for concern.
It is unthinkable that that should occur.
[100] Such an order was sought by
AllPay in its notice of motion but the case has taken many turns. A
new notice of motion was produced
in the court below in the course of
argument in reply. I do not intend setting out in full the new order
that was sought. In essence
AllPay asked for an order setting aside
the contract and ordering SASSA to invite tenders again, subject to
various directions
as to the time by which various steps must occur.
It asked for the order setting aside the contract to be suspended
until that
process was completed, the implication being that CPS
should meanwhile be required to continue paying the grants.
[101] It was said that an order
along those lines was granted in
Millenium Waste
but that is
not correct. In that case a tender had been unlawfully disqualified
and was not evaluated. What was ordered was only
that the tender be
evaluated, together with various arrangements that would remain in
place until that had been done. How those
arrangements came about
does not appear from the judgment.
[102] The order asked for was
produced only in the course of argument after all the affidavits had
been filed. Neither SASSA nor
CPS had an opportunity to file
affidavits in response to the new claim. Counsel for AllPay submitted
that a court is constitutionally
authorised, once it has found
conduct to be unlawful, to craft an order that is appropriate to the
circumstances – which
is correct – and that the court
below ought to have done so. That court not having done so we were
asked to craft one ourselves.
[103] This is not a simple
contract as was the case in
Millenium Waste
. It is a massive
contract with massive implications for fifteen million people and for
SASSA and for CPS. The idea that a court
is entitled to compel CPS to
continue providing services against its will when its contract might
at any time come to an end is
problematic in itself. That the court
below should have done that – or that we should do so now –
without SASSA and
CPS having had the opportunity to place facts
before the court on the implications is not tenable.
[104] But even if this court was
minded to do so, as we were asked to do, there is a fact that is
decisive against it. I have pointed
out that in
Millenium Waste
what was called for was only the evaluation of a tender. In this case
AllPay wants the whole process to start again. If there had
indeed
been fatal irregularities in the evaluation of the bids that was no
ground for SASSA to be ordered to invite new tenders.
At most AllPay
might have been entitled to an order that the bids be evaluated again
without the irregularities.
[105] I think I have by now made
it clear that if SASSA were to evaluate the bids absent the alleged
irregularities there could
be no complaint if it awarded the contract
to CPS, for the very reasons it awarded the contract in the first
place, and no doubt
it will do so. No point would be served by
ordering it to evaluate the bids if the outcome would be the same.
Whichever way one
turns in this case the facts cannot be escaped: CPS
had a solution that SASSA was entitled to have and AllPay did not.
[106] There is no merit in the
appeal. The court below was correct not to embark upon that hazardous
excursion. As it turns out
the order of the court below was
unnecessary and we should set it aside but that is merely a matter of
form.
[107] For those reasons
1. The appeal is dismissed with
costs.
2. The cross-appeal is upheld
with costs. The orders of the court below are set aside and
substituted with an order dismissing the
application with costs.
3. Both in this court and in the
court below the costs are to include the costs of three counsel where
three counsel were employed.
__________________
R W NUGENT
JUDGE OF APPEAL
APPEARANCES:
For
appellants: G Marcus SC
D
Unterhalter SC
M
du Plessis
C
Steinberg
A
Coutsoudis
Instructed
by:
Nortons
Inc, Johannesburg
McIntyre
& Van der Post, Bloemfontein
For
1
st
& 2
nd
respondents: S A Cilliers SC
N
A Cassim SC
M
C Erasmus SC
M
Mostert
A
Higgs
Instructed
by:
The
State Attorney, Pretoria
The
State Attorney, Bloemfontein
For
3
rd
respondent: T W Beckerling SC
R
Strydom SC
N
Ferreira
J
Bleazard
Instructed
by:
Smit
Sewgoolam Inc, Johannesburg
Symington
& De Kok, Bloemfontein
For
Amicus Curiae: T Ngcukaitobi
Z
Gumede
M
Bishop
Instructed
by:
Legal
Resources Centre, Johannesburg
Webbers,
Bloemfontein
1
Who
are the remaining appellants.
2
Dormell
Properties 282 CC v Renasa Insurance Co Ltd
2011(1) SA 70 (SCA)
para 21.
3
1988
(3) SA 450
(A) 458I-459A.
4
Mr
Tsalamandris did not depose to an affidavit.
5
Subject
to t
he qualification in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) 635B-C.
6
Some
recipients receive multiple grants on behalf of multiple
beneficiaries.
7
A
reference to points to be awarded for the advantages the proposal
offered to historically disadvantaged persons.
8
The
price offered by CPS was marginally less than the capped sum of
R16.50.
9
Schierhout
v Union Government (Minister of Justice)
1919 AD 30
at 44.
10
Acting
Chairperson: Judicial Service Commission v Premier of the Western
Cape Province
2011 (3) SA 538
(SCA),
Watchenuka v Minister of
Home Affairs
2003 (1) SA 619
(C),
Ryobeza v Minister of Home
Affairs
2003 (5) SA 51
(C).
11
Yates
v Universiy of Bophuthatswana
1994 (3) SA 815
(BG).
12
The
conditions of employment of Yates, which were contractually binding
on the University, provided that ‘the University
may only
terminate a contract of employment on the recommendation of a
committee of enquiry [appointed by the Vice-Chancellor]
…’.
13
Para
29 above.
14
[2007]
3 All SA 115
(SCA) para 2.
15
2000
(4) SA 413
(SCA).
16
Para
30.
17
Administrator,
Transvaal v Traub
[1989] ZASCA 90
;
1989 (4) SA 731
(A).
18
Millenium
Waste Management (Pty) Ltd v Chairperson of the Tender Board:
Limpopo Province
2008 (2) SA 481
(SCA).
19
Moseme
Road Construction CC v King Civil Engineering Contractors (Pty) Ltd
2010 (4) SA 359
(SCA).
20
Para
23.