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[2024] ZAECMKHC 10
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Norland Construction (Pty) Ltd v Chris Hani Development Agency (SOC) Limited and Another (18/2022) [2024] ZAECMKHC 10 (23 January 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, MAKHANDA)
NOT REPORTABLE
Case no: 18/2022
In
the matter between:
NORLAND
CONSTRUCTION (PTY) LTD
Applicant
and
CHRIS
HANI DEVELOPMENT AGENCY (SOC)
First
Respondent
LIMITED
SIYALIMA
CIVILS (PTY) LTD
Second
Respondent
JUDGMENT
Govindjee J
[1]
The
applicant (‘Norland’) is an aggrieved unsuccessful
tenderer. During 2021, the first respondent (‘the Agency’)
invited its panel of contractors to submit tenders for a project.
[1]
Norland, the second respondent (‘Siyalima’) and four
other entities submitted tenders. Siyalima was successful, prompting
an application for interim relief, which was granted, and these
proceedings, based on s 6 of the Promotion of Administrative Justice
Act
[2]
(‘PAJA’), for
the review and setting aside, or correction of the decision to award
the tender to Siyalima.
[2]
The Agency concedes that the appointment of
Siyalima ought to be set aside as unlawful. Norland’s tender
price was some R8,7
million lower than Siyalima’s. Nonetheless,
the Agency refuses to appoint Norland on the basis that this would be
unlawful,
alternatively contrary to constitutional prescripts. There
are various reasons advanced for this position. The Agency regarded
Norland’s tender as non-responsive because it provided
incomplete documentation, and because certain documentation had not
been certified. It also places reliance on a ‘probity report’
it obtained from its outsourced internal auditors (‘SNG
Grant
Thornton’), which concluded that none of the tenderers were to
be awarded the contract and that Norland’s bid
should have been
disqualified as non-responsive, alternatively should not have been
considered due to various issues of non-compliance.
Counsel for the
Agency argued that Norland had not submitted proof of compliance with
its municipal dues. This was a specified
requirement and there was
authority holding this omission to be fatal to the application.
[3]
In terms of the tender invitation and
conditions, the bid was subject to the Preferential Procurement
Policy Framework Act, the
General Conditions of Contract (GCC) and
the standard conditions of tender, the CIDB Standard for Uniformity
and Construction Procurement
as varied or added in terms of the
tender data. The tender was addressed to the Agency’s Panel of
Contractors. Norland had
been appointed to the panel for a 36-month
period from 26 February 2021. It is common cause that contractors on
the panel were
considered to have passed functionality and
prequalification, so that appointments could occur quickly and
without the need to
re-evaluate functionality and technical ability.
A two-stage evaluation system was accordingly inapplicable. Norland’s
BBBEE
level (Level 1) was at least the same as that of Siyalima, and
the procedure for the evaluation of responsive tenders was based
on
price and BBBEE with the 90/10 preference points system used. It is
further common cause that no objective criteria were stipulated
in
the tender documents to enable the Agency not to award the tender to
the tenderer scoring the highest points, as per its obligation
in
terms of its Supply Chain Management Policy. The crux of its case is
that Norland’s bid was non-compliant and correctly
ruled out.
[4]
The following issues arise: whether the
Agency was entitled to rely on the reasons contained in the probity
report as a basis for
not awarding the tender to Norland; whether
Norland’s tender was properly declared non-responsive for the
reasons contained
in the Bid Evaluation Report; if not, what would be
a just and equitable remedy.
The probity report
[5]
It
is convenient to first consider the Agency’s reliance on the
probity report. The duty to give reasons for an administrative
decision is a central tenet of the constitutional duty to act fairly.
A failure to give proper or adequate reasons ordinarily renders
a
disputed decision reviewable.
[3]
The general rule is that ‘reasons formulated after a decision
has been made cannot be relied upon to render a decision rational,
reasonable and lawful’.
[4]
To quote a recent decision of the SCA:
[5]
‘
What
is clear from this passage is that
ex
post facto
reasons must be excluded
from consideration. These are reasons which did not form the basis
for the decision at the time but are
subsequently formulated to meet
the attack of a reviewing applicant. Of course, it is not always easy
to distinguish the two. It
is safe to say, however, that reasons
which motivated the decision at the time must form the basis for the
evaluation by a court.’
[6]
The
exception noted by the Constitutional Court in
National
Energy Regulator of South Africa v PG Group (Pty) Limited and Others
is inapplicable in the present circumstances: the SNG Grant Thornton
report was not in the nature of expert explanation of the
rationale
of the Agency’s decision, based on its expertise in a
particular area.
[6]
The focus
must, therefore, be restricted to the reasons that motivated the
Agency’s decision at the time Norland’s
bid was rejected,
as per its own explanation for its decision.
[7]
The Bid Evaluation
Report
[7]
The following reasons were provided for
declaring Norland’s bid non-responsive: ‘CVs of key
personnel not certified;
Letter of Good Standing regarding workmen’s
compensation not certified; Tender not completed in full (tender
drawings); Unemployment
Insurance Certificate not certified.’
Four other tenders were similarly excluded.
Certification
[8]
It may be accepted that the stipulated
tender conditions included the various certification requirements
highlighted by the Agency
as part of its reasons for disqualifying
Norland. Although the stipulated tender conditions appended to the
tender notice made
no such reference, it was noted that failure to
‘submit all supplementary information will lead to the tender
being considered
non-responsive and not considered for award’.
Various variations, amendments and additions to the Standard
Conditions of
Tender were applicable. Clause C.2.23 contained the
following ‘addition or variation to Standard Conditions of
Tender’:
‘
All
certificates and information, as per T2.1 and T2.2 of the tender
document are to be provided with the tender offer as well as:
a. Certified copy of a
Workmen’s Compensation Certificate, Act 4 of 2002;
b. Certified copy of
Unemployment Insurance Certificate, Act 4 of 2002;
…
d. Certified copy of
Curriculum Vitae of supervisory personnel indicated in Section T2.2;’
[9]
The question remains whether the
certification requirements specified were ‘material’.
[10]
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.
[8]
Section 1 of the
Preferential Procurement Policy Framework Act, 2000 (‘the
PPPFA’)
[9]
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. Whether a tender is acceptable must be
construed taking cognizance of the system envisaged
by s 217 of the
Constitution.
[10]
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.
[11]
[11]
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’.
[12]
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.
[13]
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.
[14]
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.
[15]
[12]
It
is nevertheless accepted that compliance with bid requirements is
necessary and has intrinsic value.
[16]
Equal bid requirement observed by all bidders enhances the fairness
of the process, so that bid requirements simply cannot be discarded
at the drop of a hat.
[17]
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.
[18]
Such an approach could defeat the objectives of fairness,
transparency, competitiveness and cost effectiveness.
[19]
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.
[20]
On this approach, there are instances where substantial compliance
with the tender terms and conditions (as opposed to perfect
compliance) would suffice.
[21]
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.’
[22]
[13]
Importantly,
it is for the department, as employer or institution inviting the
tender, to decide the prerequisites for a valid tender.
[23]
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.
[24]
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.
[25]
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.
[26]
[14]
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 cost-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.
[27]
[15]
In
Millennium
Waste
,
the respondents argued that the appellant’s tender was not an
‘acceptable tender’ and had been lawfully and
properly
disqualified. This on the basis that the terms of the tender
documents relating to administrative compliance were couched
in
peremptory language which expressly stated that non-compliance would
result in disqualification. Proper signing of the tender
documents
was one of the terms which if not complied with, it was argued, led
to disqualification.
[28]
The
appellant had omitted to sign a declaration of interest. The SCA
explained that the tender committee was permitted to condone
non-compliance with peremptory requirements in cases where
condonation was not incompatible with public interest, and provided
such condonation was granted by the body for whose benefit the
provision was enacted. It held that condonation of the appellant’s
failure to sign the declaration would have served the public interest
as it would have facilitated competition amongst tenderers,
and would
have promoted the constitutional values listed in s 217, also given
that the appellant’s tendered price was substantially
less than
that of the successful bidder.
[29]
[16]
The SCA also interpreted the definition of
‘acceptable tender’ in the Preferential Procurement Act
against the backdrop
of s 217(3) of the Constitution. Drawing on
Sapela Electronics
,
it highlighted that whether ‘the tender in all respects
complies with the specifications and conditions set out in the
contract documents must be judged against [the constitutional]
values’. The court added as follows:
‘
[19]
In this context the definition of tender cannot be given its wide
literal meaning. It certainly cannot mean that a tender must
comply
with conditions which are immaterial, unreasonable or
unconstitutional. The defect relied on by the tender committee in
this case is the appellant’s failure to sign a duly completed
form, in circumstances where it is clear that the failure was
occasioned by an oversight. In determining whether this
non-compliance rendered the appellant’s tender unacceptable,
regard
must also be had to the purpose of the declaration of interest
in relation to the tender process in question …
[21] Since the
adjudication of tenders constitutes administrative action, of
necessity the process must be conducted in a manner
that promotes the
administrative justice rights while satisfying the requirements of
PAJA. Conditions such as the one relied on
by the tender committee
should not be mechanically applied with no regard to a tenderer’s
constitutional rights. By insisting
on disqualifying the appellant’s
tender for an innocent omission, the tender committee acted
unreasonably. Its decision in
this regard was based on the
committee’s error in thinking that the omission amounted to a
failure to comply with a condition
envisaged in the Preferential
Procurement Act. Consequently, its decision was “materially
influenced by an error of law”
contemplated in s 6(2)(d) of
PAJA, one of the grounds of review relied on by the appellant.
Therefore, the tender process followed
by the department was
inconsistent with PAJA …’ (References omitted).
[17]
Norland attached a copy of a ‘letter
of good standing’ from the Federated Employers’ Mutual
Assurance Company
(RF) Pty Ltd, noting its compliance with the
Compensation for Occupational Injuries and Diseases Act, 1993,
(‘COIDA’)
and the approval of its registration by the
Compensation Commissioner and Department of Labour. A ‘certificate
of compliance’,
effective from 14 November 2020 to 13 November
2021, issued by the Unemployment Insurance Commissioner was also
attached. The curricula
vitae of four employees of Norland were also
appended. Norland admitted that none of these documents had been
certified by a commissioner
of oaths. It pleaded, inter alia, that
the certification requirement was not material, alternatively that
‘it would have
been a simple matter for the First Respondent to
have requested certification of the three documents submitted in
terms of item
C2.17 of the Addition or Variations to the Standard
Conditions of Tender…’
[18]
Significantly, the Agency failed to address
these matters in its answer, maintaining only that there had been a
failure to comply
with a stipulated requirement, and highlighting the
findings of the probity report, coupled with the following:
‘
In
the circumstances, Norland’s tender ought to have been regarded
as non-responsive and have been rejected from the beginning.
It did
not qualify for further consideration or the allocation of points as
it contends. Norland is not entitled to be appointed.
I deny that the
non-compliance aforesaid was not material.’
[19]
The effect of this approach is that
there is nothing before the court to explain the importance of
certification of the documentation
in question in the context of the
entire tender process. It bears emphasis that this is not an instance
of prescribed documentation
being omitted. The documentation was
provided but in uncertified form. The importance of the curricula
vitae, the letter from the
Unemployment Insurance Commissioner and
the Letter of Good Standing in terms of COIDA is not in question.
Rather, it is the failure
to provide certified copies of that
documentation that resulted in Norland’s disqualification, in
circumstances where the
importance of certification has been left
unexplained. As Mr
De La Harpe
argued, the Agency’s approach attached materiality to that
which, on balance, was immaterial. It seemingly failed to give
consideration to affording Norland an opportunity to address the
oversight, this in circumstances where the list of returnable
documents omitted reference to certified copies. Eschewing the
constitutional value attached to cost-effectiveness in tenders,
it
proceeded by way of an ultra-strict approach, even though the
consequence would be acceptance of a more expensive bid. In the
circumstances of this case that approach was unfair.
Tender drawings
[20]
The judgment of Bloem J, granting Norland
interdictory relief, describes this ground as ‘difficult,
almost impossible, to
understand’. This is largely because the
Agency’s papers fail to explain the basis for the alleged
requirement, resulting
in the learned judge concluding that ‘the
first respondent imposed a requirement on the tenderers which was not
contained
in the tender invitation’.
[21]
Even accepting that Norland breached a
formal requirement in failing to return the tender drawings, the
requirement cannot be said
to be material. This is because the papers
reveal that the drawings in question were nothing more than those
e-mailed by the Agency
to Norland, upon which it was expected to
submit its tender. A clause provides that the drawings forming part
of the tender document
were to be regarded as provisional and
preliminary ‘for the Tenderer’s benefit to generally
assess the scope of work’.
Unsurprisingly, the drawings were
not included as part of the list of returnable documents and counsel
for the Agency rightly did
not press the point.
Just and equitable
relief
[22]
It
is open to the court to grant an order that is ‘just and
equitable’. This includes an order setting aside the
administrative
action and remitting the matter for reconsideration by
the administrator, with or without directions or, in exceptional
cases,
substituting or varying the administrative action or
correcting a defect resulting from the administrative action.
[30]
[23]
This
involves a process of striking a balance between the applicant’s
interests on the one hand, and the interests of the
respondents, on
the other. Proper consideration of the facts is a prerequisite for
the selection of the appropriate remedy.
[31]
[24]
Administrative
action that is unlawful, reasonable or unfair in PAJA terms is
ultimately inconsistent with s 33 of the Constitution,
requiring the
application of both s 38 and s 172(1) of the Constitution. Section 38
allows a court to grant ‘appropriate
relief’ for the
infringement of rights. The consequences of a declaration of
invalidity must be dealt with in a just and
equitable order under s
172(1)
(b)
and
s of PAJA gives detailed legislative content to the Constitution’s
‘just and equitable’ remedy.
[32]
[25]
It
is trite that a court will only substitute or vary the administrative
action, or itself correct a defect, in exceptional circumstances.
This is because administrators are generally better equipped to make
decisions regarding contracts of this nature. At common law
it is
well established that a court will generally refer the matter to the
original decision-maker rather than attempt to ‘correct’
the decision by substituting its own view for that of the
administrator.
[33]
Section
8(1)
(c)
(i)
of PAJA makes specific reference to remitting the matter for
reconsideration by the administrator, with or without directions.
[26]
Having
determined that the decision to award the tender must be set aside,
it is not unusual for courts to grapple with whether
the
administrator should be required to reconsider the bids already
submitted in response to the previous tender invitation, or
run a
fresh tender process. Hoexter and Penfold provide the following
guidance:
[34]
‘
The
exercise of the court’s remedial discretion should depend
primarily on the nature of the irregularity and the extent to
which
circumstances have changed in the intervening period. If the
irregularity taints the entire tender process (as where the
tender
criteria are vague or otherwise defective), a fresh tender process
should be run … If, however, the irregularity
relates to the
manner in which decisions were taken by those responsible for the
evaluation or adjudication of the tender, there
would normally be no
reason why the existing tenders cannot simply be considered –
unless, importantly, circumstances have
changed and it is no longer
appropriate to award a contract based on the original tender
process.’
[27]
In
Gauteng
Gambling Board v Silverstar
,
[35]
Heher JA noted that ‘remittal is almost always the prudent and
proper course, a sentiment expanded upon by Plasket J in this
Division:
[36]
‘
The
default position, when administrative action is reviewed and set
aside, is for the decision to be remitted to the original
decision-maker to decide again, with the benefit of the court’s
findings as to where he or she erred initially.’
[28]
Such
an approach has the obvious advantage that the administrator, who
enjoys various advantages over a court in such matters, based
on its
composition, experience and access to relevant information sources,
is re-tasked with making an appropriate decision. This
approach has
the added benefit of respecting the principle of deference.
[37]
[29]
In
Trencon
,
the Industrial Development Corporation of South Africa (‘IDC’)
was unable to present evidence justifying its refusal
of a tender
award to Trencon as the highest points earner.
[38]
The IDC was also unable to show circumstances that would have
necessitated the process starting afresh so as to justify the
cancellation
of the tender. The High Court held that remittal would
not be prudent and concluded that it would be just and equitable to
grant
an order of substitution, awarding the tender to Trencon. On
appeal against a decision of the SCA to remit the matter to the IDC
for reconsideration, the Constitutional Court explained the
‘exceptional circumstances test, as follows:
‘
[34]
Pursuant to administrative review under s 6 of PAJA and once
administrative action is set aside, s 8(1) affords courts a wide
discretion to grant “any order that is just and equitable”.
In exceptional circumstances, s 8(1)
(c)
(ii)
(aa)
affords a court the discretion to make a substitution order.
[35] Section
8(1)
(c)
(ii)
(aa)
must be read in the context of s 8(1).
Simply put, an exceptional circumstances enquiry must take place in
the context of what
is just and equitable in the circumstances. In
effect, even where there are exceptional circumstances, a court must
be satisfied
that it would be just and equitable to grant an order of
substitution …
[47] To my mind, given
the doctrine of separation of powers, in conducting this enquiry
there are certain factors that should inevitably
hold greater weight.
The first is whether a court is in as good a position as the
administrator to make the decision. The second
is whether the
decision of an administrator is a foregone conclusion. These two
factors must be considered cumulatively. Thereafter,
a court should
still consider other relevant factors. These may include delay, bias
or the incompetence of an administration. The
ultimate consideration
is whether a substitution order is just and equitable. This will
involve a consideration of fairness to
all implicated parties. It is
prudent to emphasise that the exceptional circumstances enquiry
requires an examination of each matter
on a case-by-case basis that
accounts for all relevant facts and circumstances.
[48] A court will not be
in as good a position as the administrator where the application of
the administrator’s expertise
is still required and a court
does not have all the pertinent information before it. This would
depend on the facts of each case.
Generally, a court ought to
evaluate the stage at which the administrator’s process was
situated when the impugned administrative
action was taken. For
example, the further along in the process, the greater the likelihood
of the administrator having already
exercised its specialised
knowledge. In these circumstances a court may very well be in the
same position as the administrator
to make a decision. In other
instances some matters may concern decisions that are judicial in
nature. In those instances –
if the court has all the relevant
information before it – it may very well be in as good a
position as the administrator
to make the decision.
[49] Once a court has
established that it is in as good a position as the administrator, it
is competent to enquire into whether
the decision of the
administrator is a foregone conclusion. A foregone conclusion exists
where there is only one proper outcome
of the exercise of an
administrator’s discretion and “it would merely be a
waste of time to order the [administrator]
to reconsider the matter”
… in instances where the decision of an administrator is not
polycentric and is guided by
particular rules or by legislation, it
may still be possible for a court to conclude that the decision is a
foregone conclusion.’
(References omitted).
[30]
The
facts in
Trencon
demonstrate when substitution or correction is likely to be
appropriate. In that matter, the various committees of the IDC had
already evaluated the bids and had recommended the award to the
applicant. It was also common cause that the applicant’s
bid
had scored the highest points and that, but for an error of law, the
applicant’s bid would not have been disqualified.
But a court
must be certain that it really is as well qualified as the original
decision-maker, and that all the relevant information
is before,
before proceeding on that basis.
[39]
[31]
As
indicated, the Agency rightly concedes that the decision to award the
tender to Siyalima must be set aside. There is no apparent
basis for
this court not to exercise its discretion accordingly. This serves
the principle of legality. The contract was awarded
pursuant to a
defective tender process and Norland acted expeditiously in
preventing the implementation of the contract.
[40]
[32]
This is not to suggest that the entire
tender process must be set aside and re-advertised, particularly
considering the absence
of any self-review brought by way of a
counter-application. That aside, the answering papers fail to detail
irregularities of the
kind that would justify this outcome.
[33]
The question remains whether this is an
‘exceptional case’ to justify ‘substituting or
varying the administrative
action or correcting a defect resulting
from the administrative action’, rather than remitting the
matter for reconsideration
by the administrator, with or without
directions. Of relevance is that it is apparent from the papers and
the preceding analysis
that the Bid Evaluation Committee misdirected
itself in various ways in performing its functions. In finding only
Siyalima’s
bid to be responsive, it proceeded to evaluate its
bid price. In doing so, various Bill of Quantity errors were
ascertained, some
of which were assessed as ‘low risk’.
Reference checks were seemingly only conducted in respect of
Siyalima, as the
only tender considered to be responsive.
[34]
Such matters bring to the fore the various
complexities associated with public tenders. The extent of the
finances involved also
cannot be ignored, heightening the sense of
care to ensure that the appropriate process and outcome is reached,
and thereby giving
effect to the principle of legality. Considering
the stage of the process at which Norland was excluded, namely during
a ‘compliance
check’, its bid was not subjected to the
kind of scrutiny (in respect of price, bill of quantities and
reference checks)
that resulted in the concerns expressed in the Bid
Evaluation Committee Report regarding Siyalima. Such matters convince
me that
this court cannot be as well qualified, or in as good a
position, as the original authority to make the decision, and I am
unable
to conclude that the result of proper re-evaluation is a
foregone conclusion. The result is that this does not appear to be an
‘exceptional case’ to justify substitution or correction.
That being the case, it is appropriate to grant Norland only
the
alternative relief it seeks, in addition to setting aside the
original decision.
[35]
The following order is issued:
1.
The First Respondent’s decisions to:
1.1
disqualify the tender which the applicant
submitted to the First Respondent in response to the First
Respondent’s tender invitation
in respect of the construction
of Phase 6: Xonxa Dam Transfer Scheme bulk water pipelines and break
pressure tank for Ilinge and
Machibini Village bulk water supply,
reference: PLB / 07 / 21-22 (‘the Tender invitation / the
Tender’); and
1.2
award the Tender to the Second Respondent
and conclude a contract for the implementation thereof with the
Second Respondent are
reviewed and set aside.
2.
The matter is remitted for reconsideration
by the First Respondent. The First Respondent is directed to:
2.1
re-evaluate the tenders submitted in
response to the Tender invitation, including that submitted by the
applicant;
2.2
award the Tender to the tenderer scoring
the highest evaluation points; and
2.3
conclude a contract for the implementation
of the Tender with the tenderer scoring the highest evaluation
points.
3.
The First Respondent is directed to pay the
costs of this application, the costs to include supplementary heads
of argument filed
at the request of the court.
A GOVINDJEE
JUDGE OF THE HIGH
COURT
Heard:
09
November 2023
Delivered:
23
January 2024
Appearances:
For
the Applicant:
Adv
D H De L Harpe SC
Applicant’s
Counsel
St
George’s Chambers, Makhanda
Instructed
by:
Huxtable
Attorneys
Applicant’s
Attorneys
26
New Street
Makhanda
Email:
owen@huxattorneys.co.za
For
the Respondent:
Adv
M C Louw
First
Respondent’s Counsel
Chambers,
Bloemfontein
Instructed
by:
Netteltons
Attorneys
First
Respondent’s Attorneys
118A
High Street
Makhanda
Email:
daisy@netteltons.co.za
[1]
The
project is framed as ‘Phase 6: Xonxa Dam Transfer Scheme –
Bulk Water Pipelines and Break Pressure Tank for Ilinge
and
Machibini Villages Bulk Water Supply’. Tenderers were invited
to submit their tenders for the supply, lay and testing
of a 315mm
diameter PVC to a 100mm diameter galvanized mild steel pipeline,
covering approximately 30 000 kms.
[2]
Act
3 of 2000. S 6(1) provides that ‘any person may institute
proceedings in a court or a tribunal for the judicial review
of an
administrative action’.
[3]
National
Lotteries Board and Others v South African Education and Environment
Project
[2011]
ZASCA 154
;
2012 (4) SA 504
(SCA) para 27.
[4]
See
National
Energy Regulator of South Africa v PG Group (Pty) Limited and Others
2019 (10) BCLR 1185
(CC);
[2019] ZACC 28
(‘
NERSA
’)
para 39.
[5]
Tsogo
Sun Caledon (Pty) Ltd and Others v Western Cape Gambling and Racing
Board and Another
[2022]
ZASCA 102
para 19.
[6]
NERSA
above
n 4 para 39.
[7]
See
Umgeni
Water v Sembcorp Siza Water (Pty) Ltd
2020
(2) SA 450
(SCA) para 52;
Cf
Zweni
v
Road Accident Fund and Others
2022 (6) SA 639
(WCC) para 27.
[8]
S
217 of the Constitution.
[9]
Act
5 of 2000. It is accepted that this legislation gives effect to the
directive contained in s 217(3) of the Constitution.
[10]
Chairpersons,
Standing Tender Committee and Others v JFE Sapela Electronics (Pty)
Ltd and Others
2008
(2) SA 638
(SCA) (‘
Sapela
Electronics
’)
para 14
[11]
Sapela
Electronics
above
n 10 paras 11, 12.
[12]
Metro
Projects CC v Klerksdorp Local Municipality
2004
(1) SA 16
(SCA) (‘
Metro
Projects CC
’)
para 15. Also see, in general, P Volmink ‘Legal consequences
of non-compliance with bid requirements’ (2014)
1
African
Public Procurement Law Journal
41.
[13]
Volmink above n 12 at 42.
[14]
Volmink
above n 12 at 44.
[15]
Metro
Projects CC
above
n 12 para 13 as cited in
Sapela
Electronics
above
n 10 para 19.
[16]
See
AllPay
Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer
of the South African Social Security Agency and Others
2014 (1) SA 604
(CC); 2014 (1) BCLR (1) CC (‘
AllPay
’)
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) (‘
Pepper
Bay Fishing
’).
[17]
See
Volmink above n 12 at 57.
[18]
Minister
of Social Development v Phoenix Cash and Carry
[2007]
JOL 19529 (SCA).
[19]
Ibid
para 2.
[20]
AllPay
above
n 16 as cited in Volmink above n 12 at 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.
[21]
Volmink
above n 12 at 52.
[22]
Volmink
above n 12 at 57..
[23]
Dr JS
Moroka Municipality & Others v Betram (Pty) Ltd & Another
[2014] 1 All SA 545
(SCA) (‘
Moroka
’)
para 10, applied in
WDR
Earthmoving Enterprises & Another v The Joe Gqabi District
Municipality & Others
[2018] ZASCA 72
(‘
WDR
Earthmoving
’)
paras 29, 30 and 40.
[24]
WDR
Earthmoving
above
n 23 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.’
Also see
Moroka
above
n 23 paras 10, 11,
Millennium
Waste Management v Chairperson Tender Board
[2007] SCA 165 (RSA) (‘
Millennium
Waste
’)
para 19 and
AllPay
above
n 16 para 28 read with paras 22 and 25.
[25]
Overstrand
Municipality v Water and Sanitation Services South Africa (Pty) Ltd
[2018]
ZASCA 50
para 50.
[26]
Aurecon
South Africa (Pty) Ltd v City of Cape Town
[2015]
ZASCA 209
(A) (‘
Aurecon
’)
para 26. On the link between a ‘responsive’ tender and
the PPPFA concept of ‘acceptability’,
see
Sapela
Electronics
above
n 10 para 12.
[27]
Sapela
Electronics
above
n 10 para 14.
[28]
Millennium
Waste
above
n 24
para
14.
[29]
Millennium
Waste
above
n 24 para 17. Cf
Moroka
above
n 23 para 18.
[30]
S
8(1) of PAJA.
[31]
Millennium
Waste
above
n 24 para 22.
[32]
AllPay
above
n 16 para 25.
[33]
C
Hoexter and G Penfold
Administrative
Law in South Africa
(3
rd
Ed) (2021) at 784.
[34]
Hoexter
and Penfold above n 33 at 785-786.
[35]
Gauteng
Gambling Board v Silverstar
Development
Ltd
2005 (4) SA 67
(SCA) para 29.
[36]
Tripartite
Steering Committee v Minister of Basic Education
2015
(5) SA 107
(ECG) para 50.
[37]
NERSA
above
n 4 para 90.
[38]
Trencon
Construction (Pty) Ltd v Industrial Development Corporation of South
Africa Ltd and Another
2015
(5) SA 245
(CC) para 25.
[39]
Hutchinson
v Grobler NO
1990
(2) SA 117
(T) as cited in Hoexter and Penfold above n 33 at 790.
[40]
See
Esorfrankl
Pipelines (Pty) Ltd v Mopani District Municipality
[2014] 2 All SA 493
(SCA) paras 22-27.