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[2013] ZAECPEHC 2
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Nelson Mandela Bay Metropolitan Municipality v MTN Service Provider (Pty) Ltd and Others (1661/2012) [2013] ZAECPEHC 2 (15 January 2013)
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT
ELIZABETH)
Case
No.: 1661/2012
Date
heard: 15 November 2012
Date
delivered: 15 January 2013
In the matter between:
NELSON
MANDELA BAY METROPOLITAN MUNICIPALITY
Applicant
and
MTN SERVICE PROVIDER (PTY) LTD
First
Respondent
VODACOM SERVICE PROVIDER COMPANY
(PTY)
LTD
Second Respondent
CELL
C SERVICE PROVIDER COMPANY (PTY) LTD
Third Respondent
CIGI
CELL (PTY) LTD
Fourth Respondent
ALGOA OFFICE AUTOMATION (PTY)
LTD
t/a
NASHUA EASTERN CAPE
Fifth Respondent
TELKOM SA LTD
Sixth Respondent
DIMENSION DATA (PTY) LTD
t/a
INTERNET SOLUTIONS
Seventh Respondent
J U D G M E N T
DAMBUZA, J
:
The applicant has brought an
application in which it seeks to set aside its own award of a
contract to the first respondent.
The application is opposed by
the first respondent who contends, amongst others, that there is a
dispute of fact on the papers
regarding what took place during the
process which forms the basis of the applicant’s application.
The applicant has now
brought an application that the alleged
dispute of fact be referred for oral evidence. The matter is
therefore before me for
determination of whether there is a dispute
of fact as alleged by the first respondent and whether the issue has
to be referred
for oral evidence.
The applicant is the Nelson Mandela
Bay Metropolitan Municipality. The seven respondents are MTN Service
Provider (Pty) Ltd, the
respondent to whom the contract in question
was awarded; the second respondent is Vodacom Service Provider
Company (Pty) Ltd;
the third respondent is Cell C Service Provider
Company (Pty) Ltd; the fourth respondent is CIGI Cell (Pty) Ltd; the
fifth respondent
is Algoa Office Automation (Pty) Ltd a company
which trades as Nashua Eastern Cape; the sixth respondent is Telkom
South Africa
Limited; and the seventh respondent is Dimension Data
(Pty) Ltd a company which trades as Internet Solutions. All the
respondents
submitted tenders to the applicant for provision of the
services to which the tender relates.
For a proper perspective on the issue
before me a summary of the background events leading to the
application is necessary. During
2011 the applicant invited tenders
for provision of “mobile voice” and “data”
services for a contract
period of 36 months. The first to seventh
respondents submitted tenders to the applicant in response to the
invitation. At
some stage thereafter the tenders submitted by the
second to the sixth respondents were declared to be non-responsive
for failure
to comply with certain bid requirements. Only the
first and the seventh respondents’ tenders were regarded as
responsive.
The contract was thereafter awarded to the first
respondent in a letter dated 10 February 2012 addressed by the
applicant to
the first respondent.
In the main application the applicant
seeks to have that award reviewed and set aside on the basis that
the process followed in
awarding the contract to the first
respondent, was fundamentally
“flawed, unlawful and
therefore invalid”
. In essence the applicant contends
that the disqualification of the tenders submitted by the second to
sixth respondents as
non-responsive was irregular in that there is
no provision in its Supply Chain Management Policy (SCMP) for the
pre-evaluation
process in terms of which those tenders were declared
non-responsive. According to the applicant all tenders received by
it
in response to the invitation to tender had to be placed before
the bid evaluation committee, irrespective of whether they were
responsive or not. In this case, so contends the applicant, a
pre-evaluation committee which is not provided for in the SCMP,
set
about the function of irregularly
“evaluating”
the tenders and declared non-responsive the tenders submitted by the
second to sixth respondents as already stated.
According to the applicant the SCMP
only provides for a “
specification committee”,
a
“bid evaluation committee”
and a
“bid
adjudication committee”
. The correct procedure which
should have been followed in processing the tender was, firstly, for
the bid specification committee
to compile specifications for
procurement of the necessary services. This would be done prior to
the invitation to tender being
issued by the applicant. After
publication of the tender and once the bids were received all
competing bids would be evaluated
by the bid evaluation committee
which would then submit a report to the bid adjudication committee.
The bid adjudication committee
would consider the report received
from the evaluation committee and would then make a final award or a
recommendation to the
accounting officer to make a final award.
In opposing the application, the
first respondent contends, firstly, that because the application is
not brought in terms of Rule
53 of the Rules of practice in this
Court, it is fatally defective. A further contention is that insofar
as the application is
brought in terms of the Promotion of Access to
Justice Act, Act 3 of 2000 (PAJA) it was brought out of time. For
this reason
the application falls to be dismissed. Even further,
the first respondent contends that because of an allegation by the
applicant,
in the founding affidavit, that it did not make the
decision to award the contract to the first respondent there is no
valid
basis for bringing the application in terms of PAJA. The
first respondent also contends that the application must fail as the
applicant has not shown any prejudice resulting from the
“irregular
process”;
such prejudice being a requirement for the
applicant to successfully set aside its own decision.
More relevant to the issue before me
is the first respondent’s contention, in its answering papers,
that pre-evaluation
of tenders is a mechanical process of
essentially
“ticking the boxes”
in accordance
with whether aspects of the tender specifications, such as
furnishing of specified documents and completion of
documents or
sections thereof, have been completed. According to the first
respondent this process does not entail substantive
decision making
or exercise of powers of judgment. It is therefore not an evaluation
of the bids received. To this extent, the
committees which are
enjoined to consider the tenders were advised of both the responsive
and non responsive tenders, so contends
the first respondent. As I
have stated the first respondent’s case is that the dispute of
fact arises because the relevant
parties are not in agreement as to
what took place during the pre-evaluation stage, and what the effect
of the tender is.
The first respondent contends that a
further issue which requires determination by oral evidence is
whether paragraph 2.5 of the
Court Order granted by Grogan AJ in
2010 was complied with. In this regard Grogan AJ considered a
challenge to a previous award
of a tender for the same services, by
the applicant to the first respondent. The second respondent in
these proceedings and
Mfuleni Investments CC (who had also submitted
a bid in the previous tender) challenged the previous award. Grogan
AJ granted
an order setting aside the award and remitting the tender
to the applicant for reconsideration, subject to certain conditions,
which included re-advertising thereof, appointment by the accounting
officer and
“a neutral and independent observer agreed to
by the bidders to attend all committee meetings concerned with (the)
tender”.
The award which is the subject of these
proceedings, was a culmination of reconsideration of the previous
tender as per order
of Grogan AJ.
I may add that although the second
respondent is not opposing the application it has filed an
affidavit, deposed to by its
“employee”
Wanda
Matandela. In that affidavit Matandela makes representations which
he, according to her, might assist the Court in
“arriving
at a correct decision on the matter”.
The affidavit
contains submissions on whether the provisions of PAJA are
applicable to the application and whether the application
complies
with the provisions of Rule 53. The second respondent also supports
the applicant’s case that its (second respondent’s)
tender was disqualified at the pre-evaluation stages. It also
supports the contention by the applicant that the grounds on which
its tender was in fact disqualified were wrong and takes issue with
the criteria used in allocating points to the tenders. According
to
the second respondent the applicant allocated points using incorrect
criteria.
Mr Nyameko Gqamana,
an
advocate and member of the Eastern Cape Society of Advocates, Port
Elizabeth, was appointed as an independent obsever in compliance
with the order of Grogan AJ. Although the second respondent is not
opposing the application, it raises the issue that its agreement
was
not sought prior to
Mr Gqamana’s
appointment. It also
points out that, contrary to the order granted by Grogan AJ, it is
apparent from
Mr Gqamana’s
report that he did not
attend all meetings concerned with this tender. In the relevant
portion of
Mr Gqamana’s
report the following is stated:
“
In
a Bid Adjudication Committee meeting, the BEC (Bid Evaluation
Committee) report was presented and it was left to the Bid
Adjudication
Committee to debate and consider same. I was not
present when the discussion on this contract was debated by the BAC.
Furthermore,
I am not privy of their recommendation and accordingly
cannot comment on it.”(emphasis added).
The second respondent’s
affidavit was filed out of time. However, it appears from the papers
that both the applicant and
the respondent have no objection to its
admission. The first respondent refers to the issue of
Mr
Gqamana’s
absence at the adjudication meeting, as raised
in the second respondent’s affidavit and contends that as a
result of the
absence of
Mr Gqamana
from that meeting there
is no independent report on whether the bid adjudication committee
considered the non-responsive bids.
Although no application has
been specifically brought for condonation of the late filing of this
affidavit, a detailed explanation
is made therein of the facts which
led to the late filing thereof and I am satisfied therefrom that the
affidavit should be admitted.
Sub-rule 6(5)(g) of the Rules of
Practice in this court empowers the court, where an application
cannot be decided on affidavit,
to make such an order as to it seems
meet in order to ensure a just and expeditious decision. However,
the dispute of fact must
be material to the determination of the
issue(s) between the parties. The following appears in Erasmus,
Superior Courts Practice:
1
“
The
Supreme Court of Appeal has cautioned that a court should be astute
to prevent an abuse of its process in such a situation by
an
unscrupulous litigant intent only on delay or a litigant intent on a
fishing expedition to ascertain whether there might be
a defence
without there being any credible reason to believe that there is one.
In
general terms it can be said that oral evidence in terms of the
subrule should be allowed if there are reasonable grounds for
doubting the correctness of the allegations made by the applicant.
In reaching a conclusion in this regard, facts peculiarly within
the
knowledge of the applicant which cannot for that reason be directly
contradicted or refuted by the other party are to be carefully
scrutinised
In this matter, my view is that the
more relevant inquiry is whether a court can determine, from the
papers, what the results
of the pre-evaluation process meant in
relation the subsequent processing of the bids; ie what the
relevance of the declaration
of the bids as either responsive and
non-responsive meant to the processing of the tender.
In challenging its own award, the
applicant relies on a report which sets out how the evaluation
committee regarded the results
of the pre-evaluation meeting. It
also points out that the constitution (members) of the
pre-evaluation meeting was different
from that of the duly appointed
members of the bid evaluation committee and that the members who
constituted the pre-evaluation
committee were not appointed by an
accounting officer as required by section 262 (2) of the SCMP. The
response by the first
respondent is that it is not clear from the
papers how the evaluation committee dealt with the bids subsequent
to pre-evaluation
thereof. It also contends that the people who
constituted the pre-evaluation “meeting” had no power to
“judge”
the tenders and that the difference in the
constitution of the pre-evaluation meeting and the evaluation
committee is immaterial
as two of the members of the evaluation
committee knew what had happened at the pre-evaluation stage.
In my view this is an issue which is
easily determinable on the papers. The following is recorded in the
report of the bid evaluation
committee:
“
7.1 RESPONSIVE
TENDERS
Internet
Solution was responsive only to Data services and MTN Business
Solutions was responsive for both Data and Mobile, both
were invited
for technical evaluation.”
7.2 NON
RESPONSIVE TENDERS
Tenders
were pre-evaluated as per specification, Cell C, Cigicell (PTY) LTD,
Nashua, Telkom SA LTD (Data), Telkom SA LTD (Voice
services) and
Vodacom were non-responsive in the following key areas of the
specification and therefore were not subjected to further
evaluation.
Furthermore Nashua placed functionality documents in a pricing
envelope, the pre-evaluation team agreed in the meeting
to open the
pricing envelope to double check if the functionality envelope is not
there and we found the document inside the wrong
envelope.
Voice
and Data
COMMENTS
1.
Cell
C
NMBM
Billing in areas – 90 days
2.
Cigicell
(PTY) LTD
No
ICASA registration
3.
Nashua
No
ICASA registration
Annexure
“F” – Tippex was used
Annexure
“B” – Not commissioned
Pricing
not separate as per Tender requirements.
4.
Telkom
SA LTD (Data)
Annexure
“B” – Not commissioned
Declaration
– Not commissioned
5.
Telkom
SA LTD (Voice Services)
Annexure
“B” – Not commissioned
Declaration
– Not commissioned
No
ICASA Registration
6.
Vodacom
Not
registered on NMBM database
No
partnership agreement (Data)
Copy
of Tax Clearance Certificate submitted (Data)”
The applicant makes the following
further points:
That the bids of the first and second
respondents were each considered and assessed by a different group
of members of the pre-evaluation
committee, an approach which,
according to the applicant, is inherently inconsistent as the
different groups
“may reach different conclusions on the
same issues relevant to procurement specifications”
.
That the basis on which the second
respondent’s bid was declared to be non-responsive, i.e.
failure to file proof of registration
on the applicant’s
database, certificates of Incorporation and SARS clearance
certificate, was incorrect and that discrepancies
referred to by the
pre-evaluation committee did not constitute material deviation from
tender specification. It further contends
that whilst the second
respondent’s failure to file an original tax clearance
certificate in respect of the Data services
tender could be a proper
reason for disqualification, there was no reason why its tender for
mobile voice services tender was
declared non-responsive as the
required original tax clearance certificate had been filed in that
tender.
Both
Mr Bassillian
and
Mr
Solomon
who appeared on behalf of the second respondent
referred to the report of
Mr Gqamana
in which is recorded
that the pre-evaluation meeting had declared responsive the second
respondent’s bid for mobile voice
data, however the report of
the evaluation committee records that both tenders filed by the
second respondent were found to
be unresponsive. The submission was
that one can only conclude from this that something must have
happened subsequent to the
pre-evaluation process to change the
status of the second respondent’s bid for mobile voice
services as declared during
the pre-evaluation process. The
submission on behalf of the first respondent was that this could
mean that the bids were evaluated
by the evaluation committee and
whether that is so can only be ascertain through oral evidence.
I accept that what is recorded in the
schedules completed during the evaluation process supports the
allegation made in
Mr Gqamana’s
report and is in
conflict with what is recorded in the report of the evaluation
committee. However, in my view the dispute referred
to is not
material to the resolution of the issues between the applicant and
the first respondent. Even if I were to refer this
discrepancy for
resolution through oral evidence that would lead to resolution of
the issues between the applicant and the first
respondent. There is
no evidence that a similar discrepancy exists in the records that
relate to the first respondent.
The issue between the applicant and
the first respondent is whether the pre-evaluation process was an
irregular and unlawful step
that rendered invalid the award made in
favour of the first respondent. I am satisfied that allegations and
counter-allegations
made in the affidavits filed of record, together
with the supporting documents are of such clarity that this issue
can be determined
on the papers and that there is no reason to refer
the issue of what took place during that process for oral evidence.
I also can find no reason why the
costs of this application should not follow the result.
Consequently the order I grant is
that:
The application that dispute of
fact(s) regarding the proceedings of the pre-evaluation meeting, the
evaluation committee meeting
and the adjudication committee meeting
be referred for oral evidence is dismissed with costs.
_________________________
N.
DAMBUZA
JUDGE
OF THE HIGH COURT
Appearances
:
For the applicant:
Instructed by
Le Roux Attorneys, Port Elizabeth
For the respondents:
For first respondent: Adv M Basslian
(SC)
Instructed by
Greyvensteins Attorneys, Port
Elizabeth
For second respondent:
1
B1-48C