Halifax Group (Pty) Ltd v Mandela Bay Development Agency (1998/2021) [2021] ZAECPEHC 41 (12 August 2021)

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Halifax Group (Pty) Ltd v Mandela Bay Development Agency (1998/2021) [2021] ZAECPEHC 41 (12 August 2021)

IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH
NOT
REPORTABLE
CASE
NO.: 1998/2021
In
the mater between:
HALIFAX
GROUP (PTY) LTD
APPLICANT
and
MANDELA
BAY DEVELOPMENT AGENCY
RESPONDENT
JUDGMENT
GOVINDJEE
AJ:
Introduction
[1]
The applicant approaches the court on an urgent basis. In essence, it
seeks to interdict the
respondents from implementing, executing or
carrying on with work in respect of the construction of the Moore
Dyke Sport Precinct,
and to suspend the decision of the first
respondent to award that tender to the second respondent (‘the Part
A application’),
pending the review of that decision (‘the Part B
application’).
[2]
The application was opposed by both respondents,
inter alia
on
the basis that the application should be struck from the roll for
lack of urgency. In the time available I have not dealt with
every
aspect raised in argument, instead confining this judgment to those
issues considered to be most relevant.
Urgency
[3]
In urgent applications a judge may dispense with the forms and
service provided for in the
Uniform Rules and dispose of the matter
at a time and place and in such manner and in accordance with such
procedure as seems meet.
[1]
The degree of relaxation of the rules must be commensurate with the
exigency of the case.
[2]
The
major considerations in deciding whether or not to exercise the
court’s power to abridge the times prescribed and to accelerate
the
hearing of a matter are the following:
[3]
·
The prejudice that the applicant might suffer by having to wait for a
hearing in the ordinary course;
·
The prejudice that other litigants might suffer if the applicant is
given preference; and
·
The prejudice that respondents might suffer by the abridgment of the
prescribed times and an early
hearing.
[4]
In my view the applicant has succeeded in showing sufficient and
satisfactory grounds to permit
the matter being heard on an urgent
basis. The kind of harm alleged justifies the disruption of the roll
that it occasions. The applicant
seeks to exercise the constitutional
right to lawful, reasonable and procedurally fair administrative
action
[4]
and to hold the first
respondent, as an organ of state, to the procurement of goods and
services in accordance with a system which
is fair, equitable,
transparent, competitive and cost effective.
[5]
[5]
There has been no undue delay in bringing the application, following
receipt of the first
respondent’s final decision to reject the
applicant’s bid as non-responsive on 12 July 2021. It is also clear
that the first
respondent plans to proceed to implement the tender in
the absence of court intervention, so that much of the project may
have been
completed by the time ordinary review proceedings are
determined. I am satisfied, on the facts, that the applicant may not
obtain
substantial redress in the event that it is successful but
forced to wait in the queue to argue part B of the motion, justifying
the decision to hear the matter on an urgent basis.
[6]
The
facts
[6]
The first respondent issued and advertised a tender for the
construction of the Moore Dyke
Sport Precinct during 14 September
2000. The initial closing date for the submission of tenders was 15
October 2020, later extended
to 23 October 2020. The applicant’s
bid was timeously submitted. Nine other companies also submitted
bids. The first respondent
announced the amounts that had been
tendered in each instance and the applicant’s bid was the lowest
received.
[7]
The Bid Evaluation Committee (BEC) met to conduct stage 1 of the
evaluation process sometime
after 23 October 2020. This is where the
tender documents submitted are scrutinised to ensure that all the
relevant documents as
per the advertisement have been correctly
attached.
[8]
The applicant received correspondence on 8 December 2020 advising it
that its bid was disqualified.
A number of changes had been made to
the initial tender documents. The second lowest bidder was declared
as non-responsive during
the stage 1 process, having failed to
acknowledge receipt of an addendum and to make changes to the bills
of quantities in terms
of the bulletins issued.
[7]
The applicant objected to its disqualification for alleged
non-compliance during January 2021 and, following legal advice, the
first
respondent issued an internal memorandum recording that the
applicant’s bid was compliant with stage 1 of the evaluation
process
and had been evaluated under stage 2.
[8]
The bid was now rejected on the basis that the applicant’s score
failed to meet the minimum to pass that stage, in part due to
the
applicant’s Health and Safety Officer lacking valid certification.
Following an exchange of correspondence, the first respondent
confirmed that the applicant’s bid met the minimum functionality
score.
[9]
The applicant’s bid was now disqualified on the basis that, despite
acknowledging receipt
of the applicable addendum, it had not effected
changes to the bills of quantities as per the notice to tenderers
sent with the Supply
Chain Management bulletins requesting changes.
The BEC considered this to be a material deviation, as follows:
‘
The evaluation
process comprised 3 stages:
Stage 1 –
Compliance Evaluation;
Stage 2 –
Functionality Evaluation; and
Stage 3 – Price
and Preference Evaluation as per Method 2 of the latest CIDB
requirements.
During stage 3
evaluation, the BEC noted Halifax Group Pty Ltd did not effect
changes to the Bill of Quantities (BoQ) as per Notice
to Tenders sent
with the SCM Bulletins, requiring the changes to be made on the BoQ.
Halifax Group Pty Ltd acknowledged receipt of
the Bulletins and the
Notices to Tender. The above is deemed by the BEC as a material
deviation to the tender. Please see the consultants
Technical Report,
BoQ attached hereto and the clauses below for further explanation on
the material deviation.’
[10]
The ‘clauses’ referred to emanate from the Construction Industry
Development Board Standard for Uniformity
in Construction Procurement
(‘the CIDB Standard’).
[9]
The parties again engaged, including the applicant providing expert
reports for consideration. On this occasion the applicant’s
objections failed and a final decision was made to disqualify the
bid. On 21 May 2021, the first respondent addressed the following
correspondence to the applicant:
‘
After reviewing
the information that was provided, it is the view of the MBDA that
Halifax Group (Pty) Ltd is non-responsive as it
did not conform to
the conditions set out in the Tender Conditions and Data (…Clause
F3.8.2) as it contains a material deviation
to the tender which can
“
detrimentally affect the scope, quality or performance of the
works”
(subclause “a”) and Clause F2.6 (acknowledgement of
addenda to tender documents). This was a first stage compliance
requirement
for which Halifax Group (Pty) Ltd had been deemed to be
compliant due to the signed Notices to Tender. On review of the Bill
of Quantities
(BOQ), the certification on the Notice to Tender that
all changes that were effected were not complied with thus resulting
in a change
of the compliant allocation to non-compliant…’
[11]
The first respondent added that it had found support in an opinion
received from the CIDB and that clause 3.9
of the CIDB Standard was
only applicable to
responsive
tenders
.
It also relied on a technical report from Bosch Projects, indicating
that the applicant’s quoted price would have increased (from
R39 100 000,00 to R40 300 507,43) had the
applicant made changes in its bills of quantities as required by the
first respondent.
[10]
Even
with this change, the applicant’s bid would have remained the
lowest.
[12]
The technical report went beyond factoring changes that the applicant
ought to have made to its bill of quantities
by concluding that the
applicant’s rates on item 5 of bill 2 were unacceptably low and out
of line with ‘acceptable industry
average’ (having been costed at
R15m
3
as opposed to R355m
3
.
[11]
Replacing that amount increased the applicant’s tendered amount to
R44 294 572,43, and placed the applicant’s bid fifth
in
terms of the pricing submissions received.
[13]
A further meeting, and even mediation, was unable to resolve the
impasse. The first respondent subsequently
appointed the second
respondent to undertake the project and made it clear that it was
proceeding with implementation. This resulted
in the urgent
application under consideration.
The
issues
[14]
Various issues came to the fore during argument, in the context of
the parties’ submissions in respect of
the granting of an interim
interdict, and the satisfaction of the requirements for this relief.
These include:
a.
Did the BEC commit a gross irregularity by considering compliance
with tender documentation at a stage when price
and preference (stage
3) was in issue, and after the applicant had seemingly passed both
stages 1 and 2 of the evaluation process?
Or was the BEC entitled to
recommend disqualification of a bid for non-compliance with the
tender requirements, and to revise earlier
findings made at previous
stages of the bid evaluation process, at any stage?
b.
Was the first respondent’s decision to reject the applicant’s bid
as non-responsive procedurally unfair or
materially influenced by
errors of law, including omission to consider relevant considerations
and consideration of irrelevant matters
in arriving at its decision?
Or did the applicant submit an acceptable tender, so that a
prima
facie
case for the granting of an interim interdict has been
satisfied?
c.
Did the first respondent’s decision, in awarding the tender to a
bidder whose quoted price was higher
than the applicant’s, violate
section 217 of the Constitution.
The
legal position
The
test for an interim interdict
[15]
The well-known test for an interim interdict requires that an
applicant must establish:
[12]
a.
A
prima facie
right even if it is open to some doubt;
b.
A reasonable apprehension of irreparable and imminent harm to the
right if the interdict is not granted;
c.
The balance of convenience must favour the grant of the interdict;
and
d.
The applicant must have no other remedy.
[16]
It is now accepted that courts grant temporary restraining orders
against the exercise of statutory power only
in
exceptional
cases
and when a
strong
case
for that relief has been made out.
[13]
A court considering the grant of an interim interdict must do so in a
way that promotes the objects, spirit and purport of the
Constitution.
The separation of powers doctrine, embedded in the
architecture of the Constitution, requires courts to ensure that all
branches
of government act within the law. It also demands that
courts must refrain from entering the exclusive terrain of the other
branches
of government unless the intrusion is mandated by the
Constitution itself.
[14]
As
Moseneke DCJ (as he then was) noted in
OUTA
:
[15]
‘
A court must keep
in mind that a temporary restraint against the exercise of statutory
power well ahead of the final adjudication
of a claimant’s case may
be granted only in the clearest of cases and after a careful
consideration of separation of powers harm.
It is neither prudent nor
necessary to define “clearest of cases”. However, one important
consideration would be whether the
harm apprehended by the claimant
amounts to a breach of one or more fundamental rights warranted by
the Bill of Rights.’
[17]
In
Eriksen
Ltd v Protea Motors and Another
,
[16]
Holmes JA stated the following:
‘
The granting of
an interim interdict pending an action is an extraordinary remedy
within the discretion of the Court. Where the right
which it is
sought to protect is not clear, the Court’s approach in the matter
of an interim interdict was lucidly laid down by
Innes JA in
Setlogelo v Setlogelo
,
1914 AD 221
at p. 227. In general, the
requisites are –
a)
A right which, “though
prima facie
established, is open to
some doubt”;
b)
A well-grounded apprehension of irreparable injury;
c)
The absence of ordinary remedy.
In exercising its
discretion, the Court weighs,
inter alia
, the prejudice to the
applicant if the interdict is withheld against the prejudice to the
respondent if it is granted. This is sometimes
called the balance of
convenience. The foregoing considerations are not individually
decisive, but are interrelated; for example,
the stronger the
applicant’s prospects of success the less his need to rely on
prejudice to himself. Conversely, the more the element
of ‘some
doubt’, the greater the need for the other factors to favour him.
The Court considers the affidavits as a whole, and
the interrelation
of the foregoing considerations, according to the facts and
probabilities…Viewed in that light, the reference
to a right which,
“though
prima facie
established, is open to some doubt” is
apt, flexible and practical, and needs no further elaboration.’
Acceptability
and non-responsiveness
[18]
An organ of state in the national, provincial or local sphere of
government, or any other institution identified
in national
legislation, must contract for goods or services in accordance with a
system which is fair, equitable, transparent, competitive
and cost
effective.
[17]
Section 1 of
the Preferential Procurement Policy Framework Act, 2000 (‘the
PPPFA’)
[18]
defines an
acceptable tender to mean any tender which in all respects complies
with the specifications and conditions of the tender
as set out in
the tender documents. The doctrine of legality demands that the
legislature and executive in all spheres are constrained
to exercise
power and perform their functions in a manner consistent with the
law. The acceptance by an organ of state of a tender
which is not
‘acceptable’ within the meaning of the PPPFA would amount to an
invalid act that would ultimately fall to be set
aside. Acceptability
is, therefore, a statutory threshold requirement.
[19]
[19]
Importantly, it is for the first respondent, as employer or
institution inviting the tender, to decide the
prerequisites for a
valid tender.
[20]
A failure to
comply with prescribed conditions would result in a tender being
disqualified as an acceptable tender under the PPPFA,
unless those
conditions were immaterial, unreasonable or unconstitutional.
[21]
Put differently, a tender should not easily be invalidated on the
basis that it contains minor deviations that do not materially
alter
or depart from the characteristics, terms, conditions and other
requirements set out in tender documents.
[22]
Whether or not a deviation or qualification is material is a question
to be determined by the BEC in its discretion, taking into
account
the set eligibility criteria.
[23]
[20]
The definition of ‘acceptable tender’ in the PPPFA must be
construed against the background of the system
envisaged by section
217(1) of the Constitution, namely one which is ‘fair, equitable,
transparent, competitive and effective’.
In other words, whether
‘the tender in all respects complies with the specifications and
conditions of tender as set out in the
contract documents’ must be
judged against these values.
[24]
[21]
The mere pricing of an item does not necessarily equate to proper
compliance.
[25]
As the Supreme
Court of Appeal held in
JFE
Sapela
:
[26]
‘
What the
Preferential Act does not permit a tenderer to do is in effect omit
from his tender a whole section of the work itemized
in the bill of
schedules and required to be performed. A tenderer who is permitted
to do this has an unfair advantage over competing
tenderers who base
their tenders on the premise, inherent in the tender documents, that
all the work itemized in the schedule of
quantities is to be
performed…What is imperative is that all tenderers tender for the
same thing. By tendering on the basis that
certain work will not be
required a tenderer is able to reduce his price to the detriment of
other tenderers, and almost certainly
also to the detriment of the
public…Such a tender offends each of the core values which section
217(1) of the Constitution seeks
to uphold. It would not be a tender
which is ‘acceptable’ within the meaning of the Preferential
Act.’
A
rigid or flexible approach?
[22]
There are degrees of compliance with any standard and, as the Supreme
Court of Appeal held in
Metro
Projects CC
,
it is notoriously difficult to assess whether less than perfect
compliance falls ‘on one side or the other of the validity
divide’.
[27]
This is due to
the highly contextual and fact sensitive nature of the enquiry, so
that judicial pronouncements must be understood
within the factual
matrix of each particular case.
[28]
There is no simple, single formula for evaluating responsiveness and
acceptability and the consequences of non-compliance may vary
depending on factors such as the purpose and materiality of the bid
requirement in question and the extent of compliance.
[29]
Fair administrative process depends on the circumstances of each case
and in some cases it is indeed fair to afford a tenderer an
opportunity to correct an obvious mistake, to ask for clarification
or further details, provided that the process on the whole does
not
lose the attribute of fairness or, in the local government sphere,
the attributes of transparency, competitiveness and
cost-effectiveness.
[30]
[23]
It is nevertheless accepted that compliance with bid requirements is
necessary and has intrinsic value.
[31]
Equal bid requirement observation by all bidders enhances the
fairness of the process, so that bid requirements simply cannot be
discarded at the drop of a hat.
[32]
It must, by contrast, also be noted that there are inherent dangers
in adopting an unduly rigid approach to the issue of responsiveness,
and that courts must guard against the elimination of bidders based
on administrative considerations as opposed to issues of
substance.
[33]
Such an
approach could defeat the objectives of fairness, transparency,
competitiveness and cost effectiveness.
[34]
The Constitutional Court has eschewed both an overly rigid as well as
an overly flexible approach and instead adopted a purposive
approach
to the issue of bid responsiveness.
[35]
On this approach, there are instances where substantial compliance
with the tender terms and conditions (as opposed to perfect
compliance)
would suffice.
[36]
As Volmink has indicated:
‘
A process of
fair-minded reasoning requires that bids be assessed on their merits
and not be excluded for relatively minor breaches.
Such an approach
gives effect to the values of fairness, equity, transparency,
competitiveness and cost effectiveness enshrined in
section 217(1) of
the Constitution. Thus, the courts are required to enquire into the
underlying objective and materiality of a bid
requirement, to
ascertain whether its purpose was in fact met despite less than
perfect compliance. A decision whether or not to
exclude a
non-compliant bidder from a bid process will depend on a variety of
factors including: the wording of the RFP, the materiality
of the
unfulfilled requirements, the degree of non-compliance and the
purpose of the requirement.’
[37]
Analysis
[24]
The applicant alleges a
prima facie
right based on the
provisions of section 217 of the Constitution and its right to just
administrative action. It takes issue with
the rejection of its bid
to undertake work on the construction of the Moore Dyke Sport
Precinct.
[25]
The core difficulty for the applicant is that its submission failed
to comply, in all respects, with the specifications
and conditions of
tender, seemingly placing it outside of the boundaries of due
implementation of a preferential procurement policy,
in terms of the
PPPFA.
[38]
In particular,
bidders were required to amend the item description and quantity of
section 4 of Bill No. 1, which changed the scope
of works from 150mm
thick layer of topsoil to 300mm thick layer of topsoil, and the
quantity of topsoil required was changed from
3498m to 10215m. The
applicant admits its error, but avers,
inter
alia
,
that the first respondent has failed to prove that the error would
detrimentally affect the scope, quality or performance of the
work.
In the first respondent’s opinion, this amounts to a material
deviation that renders the tender non-responsive, and resulted
in the
applicant’s bid being rejected.
[26]
When considering the facts set out by the applicant, together with
the facts set up in opposition that the
applicant cannot dispute, and
having regard to the inherent probabilities, there is serious doubt
in my mind whether the applicant
should be able to obtain final
relief.
[39]
It was clearly
open to the first respondent to determine the prerequisites for a
valid tender.
[40]
Acceptance
of a tender that did not satisfy the stipulated requirements would
have resulted in the first respondent facing a legality
challenge for
the breach of a threshold requirement.
[41]
That the BEC realised the non-compliance during stage 3 of its
process is of no moment in the circumstances. To hold otherwise would
be to isolate the different functions of the various stages of a
tender process artificially and rigidly. In any event, there appears
to be no basis for the suggestion - either in the statutory framework
or in the conditions of tender - that the BEC was precluded
from
disqualifying the bid when it did so.
[27]
I am also unable to agree that the non-compliance related to
conditions that were immaterial, unreasonable
or unconstitutional. A
material deviation or qualification is one which, in the employer’s
opinion, would detrimentally affect
the scope, quality or performance
of the works, services or supply identified in the Scope of Work. The
deviation in this instance
involves the pricing of the Bill of
Quantities and cannot be considered to be a trivial or minor issue.
The non-compliance followed
acknowledgement of addenda to the tender
documents, indicating the amendments required, and amounts to a
material deviation of a
stipulated requirement affecting the scope,
quality or performance of the work.
[42]
The opinion formed by the first respondent that the applicant’s
tender proposal was non-responsive within the meaning of the CIDB
Standard appears to have been rationally arrived at
intra
vires
the provisions of the tender documentation.
[43]
[28]
The provisions of the CIDB Standard relating to ‘arithmetical
errors, omissions and discrepancies’ do not
assist the applicant.
That part of the CIDB Standard allows for the highest ranked tender
or tenderer with the highest number of
tender evaluation points
after
the evaluation of tender offers in accordance with F.3.11
to be
checked for matters such as incorrect placement of a decimal point,
omissions in completing the pricing schedule or bills of
quantities
or arithmetic errors. F.3.11 of the CIDB Standard, deals with the
evaluation of a
responsive tender offer
. As such, the
applicant’s purported reliance on CIDB Practice Notes pertaining to
arithmetical errors and the like is misplaced,
being inapplicable to
instances of material deviations from tender requirements.
[29]
The applicant’s submission was non-responsive and, in terms of the
stipulated test for responsiveness, it
was open to the first
respondent to reject the tender offer and to not allow it to be made
responsive by correction or withdrawal
of the non-conforming
deviation.
[44]
The
previous interactions between the parties and reversal of earlier
decisions to disqualify the applicant’s bid, following
the lodging
of objections, does not change the position.
[45]
[30]
In exercising the court’s discretionary function, the various
requirements for the granting of an interim
interdict must be
considered in their totality. This includes the applicant’s
reasonable apprehension of irreparable harm, the
balance of
convenience and respective prejudice which would be suffered by each
party as a result of the grant or refusal of a temporary
interdict. A
key factor is that the applicant holds slim prospects of success in
the review proceedings, as described. When evaluated
together with
the other factors, the conclusion is that the applicant cannot
succeed in obtaining temporary relief. This finding
is fortified when
considering that courts are to grant temporary restraining orders
against the exercise of statutory power only
in
exceptional cases
and when a
strong case
for that relief has been made out. I am
unable to conclude that the applicant has passed that test in this
instance.
Order
[31]
I make the following order:
1.
The applicant’s non-compliance with the Uniform Rules of Court
relating to forms, time periods and service
is condoned and the
applicant is granted leave to move this application on an urgent
basis.
2.
The application for interim relief (‘the Part A relief’) is
dismissed with costs.
3.
The Part B application is postponed
sine die
.
A
GOVINDJEE
ACTING
JUDGE OF THE HIGH COURT
APPEARANCES:
FOR
THE APPLICANT:
Adv B Ndamase and Adv A Masiza, instructed by R Siyila Inc, Port
Elizabeth
FOR
THE 1
ST
RESPONDENT:
Adv G Appels, instructed by McWilliams & Elliott Attorneys,
Port
Elizabeth
FOR
THE 2
nd
RESPONDENT:
Adv O Ronnassen SC instructed by Friedman Scheckter Attorneys, Port
Elizabeth
DATE
HEARD:
30
July 2021
DATED
DELEIVERED:
12
August 2021
[1]
Rule 6(12).
[2]
Luna
Meubel Vervaardigers (Edms) Bpk v Makin & another (t/a Makin
Furniture Manufacturers
)
1977 (4) SA 135
(W) at 137E-G.
[3]
I
L & B Marcow Caterers (Pty) Ltd v Greatermans SA Ltd &
another; Aroma Inn (Pty) Ltd v Hypermarket (Pty) Ltd & another
1981 (4) SA 108
(C) at 112H-113A.
[4]
In terms of section 33 of the Constitution of the Republic of South
Africa, 1996 (‘the Constitution’) and the Promotion of
Administrative Justice Act, 2000 (Act 3 of 2000) (‘PAJA’).
[5]
S 217 of the Constitution.
[6]
See
In
re: Several Matters
on
the urgent Court Roll
2013 (1) SA 549
(GSJ) at para 7.
[7]
F.2.6 of the CIDB Standard for Uniformity in Construction
Procurement (‘the CIDB Standard’) of 2010 and 2015 provides that
the acknowledgment of the receipt of addenda to the tender documents
is one of the tenderer’s obligations.
[8]
Stage 2 focuses on functionality, emphasis being placed on the
bidder’s capacity to perform the work and includes consideration
of the staff composition of the bidder.
[9]
The
papers drew on both the 2010 and 2015 CIDB Standard on various
occasions. During argument, counsel for the applicant focused
particularly on the 2015 Standard.
F.3.8
of that Standard provides the following ‘test for responsiveness’:
‘F.3.8.1 Determine, after opening and before detailed
evaluation,
whether each tender offer properly received: a) complies with the
requirements of these Conditions of Tender, b) has
been properly and
fully completed and signed, and c) is responsive to the other
requirements of the tender documents. F.3.8.2 A
responsive tender is
one that conforms to all the terms, conditions and specifications of
the tender documents without material
deviation or qualification. A
material deviation or qualification is one which, in the Employer’s
opinion, would: a) detrimentally
affect the scope, quality or
performance of the works, services or supply identified in the Scope
of Work, b) significantly change
the Employer’s or the tenderer’s
risks and responsibilities under the contract, or c) affect the
competitive position of other
tenderers presenting responsive
tenders, if it were to be rectified. Reject a non-responsive tender
offer, and not allow it to
be subsequently made responsive by
correction or withdrawal of the non-conforming deviation or
reservation.’ Almost identical
wording appears in the 2010 CIDB
Standard.
[10]
The papers highlight that all bids were expected to be in compliance
with the CIDB Standard of 2010. The technical report relied
on the
CIDB Standard of 2015. There is a clear overlap between the two and
counsel for both parties directed the bulk of their
arguments to the
later standard.
[11]
There is a dispute on the papers as to whether the technical report
approached this issue correctly. The first respondent avers
that all
construction industry experts who advised it indicated that the
applicant’s rate was unreasonably and unrealistically
low. The
replacement figure was based on market-related industry price of the
item in question as well as the average rate of the
tender offers of
the other bidders for that item. There is also a dispute regarding
the procedure that the first respondent ought
to have followed in
dealing with the alleged material deviation. For reference to a
priced schedule of quantities being questioned
on the basis that a
quoted price was ‘not market related’, see
The
Chairperson: Standing Tender Committee and Others v JFE Sapela
Electronics (Pty) Ltd and Others
[2005] ZASCA 90
at paras 4, 8. This case also serves as an example
of an instance where a consulting engineer’s report highlighted a
particular
difficulty with the amounts quoted, demonstrating a
misunderstanding on the part of a tenderer: at paras 18, 19.
[12]
Setlogelo
v Setlogelo
1914 AD 221
as cited in
National
Treasury and Others v Opposition to Urban Tolling Allicance and
Others
(‘
OUTA’
)
2012 (6) SA 223
(CC) at para 50.
[13]
Gool
v Minister of Justice and another
1955 (2) SA 682
(CPD) cited with approval in
OUTA
at
paras 43-45.
[14]
OUTA
at para 44.
[15]
OUTA
at para 47.
[16]
1973 (3) SA 685
(A) at 691C-G, as quoted in
MEB
Energy (Pty) Ltd v Ndlambe Local Municipality and Another
(unreported Eastern Cape Division, Grahamstown, case no 466/2020) at
para 6.
[17]
S 217 of the Constitution.
[18]
Act 5 of 2000. It is accepted that this legislation gives effect to
the directive contained in s 217(3) of the Constitution.
[19]
JFE
Sapela supra
at paras 11, 12.
[20]
Dr
JS Moroka Municipality & Others v Betram (Pty) Ltd & Another
[2014] 1 All SA 545
(SCA) at para 10, applied in
WDR
Earthmoving Enterprises & Another v The Joe Gqabi District
Municipality & Others
[2018] ZASCA 72
at paras 29, 30 and 40.
[21]
WDR
Earthmoving supra
at
para 30. F.2.14 of the CIDB Standard (2010 and 2015) provides that
tenderers ‘accept that tender offers, which do not provide
all the
data or information requested completely and in the form required,
may be regarded by the employer as non-responsive.’
[22]
Overstrand
Municipality v Water and Sanitation Services South Africa (Pty) Ltd
[2018]
ZASCA 50
at para 50.
[23]
Aurecon
South Africa (Pty) Ltd v City of Cape Town
[2015] ZASCA 209
(A) at para 26. On the link between a ‘responsive’
tender and the PPPFA concept of ‘acceptability’, see
JFE
Sapela supra
at para 12.
[24]
JFE
Sapela
supra
at
para 14.
[25]
Ibid
.
[26]
Ibid
.
[27]
Metro
Projects CC v Klerksdorp Local Municipality
2004
(1) SA 16
(SCA) at para 15. Also see, in general, P Volmink ‘Legal
consequences of non-compliance with bid requirements’ (2014) 1
African
Public Procurement Law Journal
41.
[28]
Volmink
42.
[29]
Volmink 44. For a proposed matrix of factors to be considered when
determining the consequence of non-compliance with bid requirements,
see Volmink 58.
[30]
Metro
Projects CC supra
at
para 13 as cited in
JFE
Sapela supra
at para 19.
[31]
See
AllPay
Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer
of the South African Social Security Agency and Others
2014 (1) BCLR (1) CC at para 27. For an example of a strict
approach, see
Minister
of Environmental Affairs
and
Tourism and Another v Pepper Bay Fishing (Pty) Ltd; Minister of
Environmental Affairs and Tourism and Another v Smith
2003
(4) SA 1 (SCA).
[32]
See Volmink 57.
[33]
Minister
of Social Development v Phoenix Cash and Carry
[2007] JOL 19529
(SCA).
[34]
Phoenix
Cash and Carry supra
at para 2.
[35]
AllPay
supra
as cited in Volmink 51-52. A key question to ask, in terms of this
approach, is whether what the applicant did constituted compliance
with the statutory provisions viewed in light of their purpose.
[36]
Volmink 52.
[37]
Volmink 57. For a suggested framework for determining the
consequences of non-compliance with bid requirements, see Volmink
58.
[38]
Section 1, read with section 2 of the PPPFA.
[39]
See
Webster
v Mitchell
1948 (1) SA 1186
(W) 1189-1190, read with
Gool
supra
at 688C-E.
[40]
See
WBHO
/ Pro Khaya JV v The Nelson Mandela University and Another
(unreported, Eastern Cape Local Division, Port Elizabeth, case no.
2121/19) at paras 27-29.
[41]
See
JFE
Sapela supra
.
[42]
The first respondent’s consideration that the rate for item 5 in
section 4 of Bill No. 2 was unacceptably low and unbalanced
supported its approach that the applicant’s bid would
detrimentally affect the scope, quality of performance of the works
and
amounted to a material deviation so that the bid was considered
non-responsive: See
MACP
Construction (Pty) Ltd v Greater Tzaneen Municipality and Another
(unreported, North Gauteng High Court, Pretoria, case no. 5906/2012)
at para 36: ‘…the Municipality is entitled to eliminate
from
consideration any tenderer whose tender has been determined by
objective, market related criteria to be so low that if its
tender
were accepted, the Municipality would run the risks of substandard
work or a demand for additional funds…’ Further support
for this
outcome is evident from F.2.14 of the 2010 and 2015 CIDB Standard,
headed ‘Information and data to be completed in all
respects’:
it is for a tenderer to accept that tender offers, which do not
provide all the data or information requested completely
and in the
form required, may be regarded by the employer as non-responsive.
[43]
WBHO
supra
at para 45. Reder Construction’s bid was also disqualified as
non-responsive for failure to make changes to the bills of
quantities
in terms of the bulletins issued, but during stage 1 of
the evaluation process. On the acceptability of a duly qualified and
impartial
expert to advise the first respondent of a reasonable
price for the work or commodity concerned, and on the dangers of
accepting
a tender that is too low, see
MACP
Construction (Pty) Ltd
supra
at para 34.
[44]
F.3.8 of the 2010 and 2015 CIDB Standard. See
WBHO
supra
at para 100, relying on
Dr
JS Moroka Municipality supra
at paras 12, 15 and 16.
[45]
See
MACP
Construction (Pty) Ltd supra
at para 34, 36.