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[2022] ZAKZPHC 25
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Eigenbau Proprietary Limited v Umgeni Water and Others (12642/2021P) [2022] ZAKZPHC 25 (14 June 2022)

IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU–NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: 12642/2021P
In
the matter between:
EIGENBAU
PROPRIETARY LIMITED

APPLICANT
and
UMGENI
WATER

FIRST RESPONDENT
THE
MINISTER: DEPARTMENT OF WATER
AND
SANITATION

SECOND RESPONDENT
NBN
CIVILS PROPRIETARY LIMITED

THIRD RESPONDENT
JUDGMENT
Chetty
J:
[1]
The applicant brought an application to review and set aside the

decision of the first respondent (also referred to as ‘Umgeni’)
to award a tender to the third respondent (also referred
to as ‘NBN’)
for the design, supply and installation of a sludge dewatering plant
at the Hazelmere Water Treatment
Works. At the time of the launching
of the application on an urgent basis, the applicant also sought an
order setting aside any
contract concluded between Umgeni and NBN
arising from the tender. It is apparent that despite the award of the
tender, no contract
had been concluded between Umgeni and NBN. That
aspect of the relief sought accordingly becomes redundant. NBN chose
not to oppose
the relief sought and did not participate in the
proceedings.
[2]
It is common cause that Umgeni advertised the tender in April 2021
and
that it was to be evaluated in two stages – the first being
functionality, for which 70 points served as the threshold, and
the
second, being in respect of price and preference. The terms of clause
T2.29 of the tender assume much importance to the outcome
of the
review application. It reads as follows:
‘
T2.29
TENDERER’S EXPERIENCE
The
experience of the Tenderer or joint venture partners in the case of
an unincorporated joint venture or consortium will be evaluated
on
the
basis of experience in similar projects specific to water
treatment plant sludge handling or similar,
and conditions in
relation to the scope of work. Tenderers should very briefly describe
their experience in this regard relevant
to the scope of work and
attach this to this schedule. Tenderers must note that the details
reflected in the schedule below should
have contactable references so
that Umgeni Water can verify the information. If the references are
not contactable the information
shall not be considered for
evaluation purposes.
Umgeni
Water reserves the right not to appoint a tenderer should the
references generally indicate poor performance on previous
projects
that are reflected in the table below.
Copies
of completion certificates are to be attached to the last page of
this returnable. Information in the table without the certificates

attached will not be considered.’ (my italics)
[3]
It is not in dispute that the scope of work required the successful
bidder
to increase the capacity of the sludge treatment plant from
1.5 mega litres to 2.7 mega litres per day, which called for
specialised
expertise by bidders. It is for this reason that the
experience of the successful tenderer was placed in dispute by the
applicant,
contending that it (the applicant) had the requisite
experience called for, and that it and not the third respondent ought
to have
been awarded the contract. At the closing date of the tender,
16 responses were received. Upon the bidders being subjected to an

evaluation in terms of the eligibility criteria, one of them fell
away.
[4]
The next stage of the evaluation was in respect of functionality,

with the tenderer’s experience accounting for 30 weighted
percentage points. Whilst percentages were allocated for other
areas
associated with the scoring criteria, it is only the tenderer’s
experience that is relevant to the determination of
this application.
In terms of the weighted percentages allocated in respect of the
tenderer’s experience, if two projects
were completed by the
tenderer, 50 points would be awarded; with three projects receiving
70 points and an additional 15 points
each would be awarded for every
additional project, subject to a maximum of 100 points.
[5]
Although 15 tenderers passed the eligibility criteria, only five met
the
minimum functionality threshold of 70 points. In this regard the
applicant scored 81.33, with the third respondent scoring 70.9.
It is
self-evident that the third respondent ‘scraped through’
the functionality assessment by the thinnest of margins.
The third
respondent scored the highest points in respect of pricing, coming in
at a contract price of R47.4 million. The applicant,
on the other
hand, came in at R55.1 million. On 23 November 2021 the applicant was
informed in writing that the tender had been
awarded the third
respondent.
[6]
The applicant thereafter queried the basis on which the tender had
been
awarded to the third respondent, contending the latter was
‘relatively unknown’ in this market and would have not
been
able to secure sufficient experience to have been considered
eligible in terms of clause T2.29. Accordingly, the applicant was of

the view that the third respondent would not have been able to garner
sufficient points in the functionality stage in order to
be
considered for price and preference. That, in essence, was the basis
on which the applicant appealed the decision.
[7]
Pursuant to the applicant noting its intention to appeal, it
requested
various documents from Umgeni. The latter provided the
applicant with a copy of the Tender Evaluation Report as well as
various
documents pertaining to the deliberations of the Bid
Adjudication Committee. In respect of the summary report on the
functionality
evaluation, the applicant was provided with a copy of
the evaluation remarks, but complained that the document had been
redacted
and that the names of the tenderers (listed from highest to
lowest ranking) had been deleted, with the exception of the name of

the applicant, which scored 81.33. When Umgeni was pressed to supply
further documents to the applicant, it refused to do so relying
on
the provisions of the Promotion of Access to Information Act 2 of
2000 (‘PAIA’).
[8]
Although the applicant made much of the refusal and Umgeni’s
reliance
on PAIA, the applicant was eventually furnished with a
complete record of the tender proceedings and evaluations in terms of
Uniform
rule 53. It duly supplemented its founding affidavit, making
reference to the documents furnished to it. It is accordingly not
necessary for me to say anything more regarding Umgeni’s
reliance on PAIA or the extent to which such an approach is seemingly

inconsistent with
Tetra Mobile Radio (Pty) Ltd v MEC, Department
of Works, and others
2008 (1) SA 438
(SCA). See also
MEC for
Roads and Public Works, Eastern Cape, and another v Intertrade Two
(Pty) Ltd
2006 (5) SA 1
(SCA), and
Robcon Civils/Sinawamandla
2 Joint Venture v Kouga Municipality and another
2010 (3) SA 241
(ECP).
[9]
Turning to the merits, in seeking to challenge the decision of Umgeni
to award the tender to NBN, the applicant accepted that it bore the
onus to prove on a balance of probabilities that the decision
to do
so was
prima facie
shrouded in illegality. The crux of the
applicant’s challenge is focused on NBN’s lack of
experience in the construction
of comparable waste water treatment
plants, and in particular in the aspect of mechanical sludge
dewatering, a concept viewed as
a vital ingredient.
[10]
As part of its attempt at complying with this requirement, the third
respondent put up
seven certificates of its experience, comprising
four from the Steve Tshwete Local Municipality, one each from the
Lesedi Local
Municipality, the Govan Mbeki Local Municipality and the
Nkomazi Municipality. It is common cause that in considering the
relevant
project experience of NBN, Umgeni took into account four
certificates, which comprised three from the Steve Tshwete Local
Municipality
(all in respect of its work on the Boskrans Wastewater
Works) and the fourth from the Lesedi Local Municipality. As pointed
out
by Mr
Pillay SC
who appeared on behalf of the applicant,
all of the certificates from the Steve Tshwete Local Municipality
bear reference to work
having taken place in respect of the same
contract (No. BA10/11/2019). Of these certificates, one was a final,
two were completion
certificates and the fourth was a partial
completion certificate.
[11]
The
deponent to Umgeni’s answering affidavit, Mr Maake, the Senior
Manager of Legal Services, confirmed that the bids were
considered by
members of a Cross Functional Sourcing Team (‘CFST’)
comprising persons employed at Umgeni supposedly
with
the
necessary
technical
expertise
to
make
an
informed
decision.
[1]
What is known from the pleadings is that the CFST did not take into
account the partial completion certificate issued by the Steve

Tshwete Local Municipality.
As regards
the remaining certificates, the applicant submits that these ought
actually to have been considered, at best for NBN,
as constituting
one project.
[12]
What is known from the Functionality Evaluation Criteria is that the
minimum threshold
to pass functionality was set at 70 points. It is
not in dispute that in surpassing the threshold for functionality,
NBN scored
70.90 points. It must follow that in an interrogation of
NBN’s work and project experience, if any fault or error is
found
to have taken place in the scoring process, this would be fatal
to Umgeni’s opposition and to NBN’s award of the tender,

as we know from the record that NBN came through the functionality
evaluation by the slimmest of margins – 0.90.
[13]
Based on
the weighting of points for each project assessed, it was conceded by
Mr
Mthembu
SC
who
appeared with Mr
Zondi
on
behalf of Umgeni Water, that any finding by this court which impacted
negatively on the points scored by the third respondent
in the
functionality assessment would be dispositive of the case.
[2]
Put
differently, if the court finds that any one of the certificates or
projects considered by the CSFT was improperly or irregularly

considered, or that the CSFT ought to have rejected any of the
certificates submitted by the third respondent, that would directly

affect the third respondent’s score of 70.90 in the
functionality assessment. Anything less than 70 points would mean
that
the threshold for functionality would not have been achieved.
[14]
Where tenders are challenged, the test is that set out in
Allpay
Consolidated Investment Holdings (Pty) Ltd and others v Chief
Executive Officer, South African Social Security Agency, and
others
2014 (1) SA 604
(CC) para 28:
‘
Under
the Constitution there is no reason to conflate procedure and merit.
The proper approach is to establish, factually, whether
an
irregularity occurred. Then the irregularity must be legally
evaluated to determine whether it amounts to a ground of review
under
PAJA.’
[15]
Prior to analysing the issue of whether NBN had the necessary
experience qualifying it
to pass functionality, a brief comment on
the authority of the deponent to the opposing affidavit is necessary.
The applicant correctly
pointed out that as a legal adviser to
Umgeni, the deponent (Mr Maake) is hardly possessed of the requisite
technical skills or
qualifications to express views on the
construction, design and implementation of sludge dewatering systems.
This could not be
gainsaid. While Umgeni filed confirmatory
affidavits by the members of the CSFT who were responsible for the
scoring in the tender
process, these confirmatory affidavits do not
allude to the specific skills of each of the members of the team, nor
does the main
affidavit of Mr Maake attribute any of the assertions
therein to specific members of the CSFT. In
Drift Supersand (Pty)
Limited v Mogale City Local Municipality and another
[2017] 4 All
SA 624
(SCA) para 31 the court criticized the practice of merely
attaching confirmatory affidavits when such a person should have in
fact
deposed to a proper affidavit:
‘
.
. . Instead the Municipality adopted the sloppy method of adducing
evidence by way of a hearsay allegation made by Mr Mashitisho

supported by a so-called “confirmatory affidavit” by Mr
Van Wyk, who stated no more than that he had read the affidavit
of Mr
Mashitisho and “confirmed the contents thereof in so far as it
relates to me and any of activities”. This might
be an
acceptable way of placing non-contentious or formal evidence before
court, but where, as here, the evidence of a particular
witness is
crucial, a court is entitled to expect the actual witness who can
depose to the events in question to do so under oath.
Without doing
so, a hearsay statement supported merely by a confirmatory affidavit,
in many instances, loses cogency.’
[16]
Contrary to the contention by the applicant that where Mr Maake
comments on matters in
respect of which he clearly has no personal
knowledge or expertise, such assertions are to be regarded as
inadmissible, I am of
the view that it merely affects the cogency of
such evidence. In
Panday v National Director of Public
Prosecutions
[2020] 4 All SA 544
(KZP) para 29 the court said
that ‘[t]he
dictum
in
Drift Supersand
merely
expresses displeasure with the practice coupled with the legal
consequence that the cogency of the evidence would, in many

instances, be diminished.’
[17]
In
President of RSA and others v M & G Media Ltd
[2011] 3
All SA 56
(SCA) paras 37-38 the following was said:
‘
[37]
. . . . If knowledge of the occurrence of the event has come to a
witness from direct observation then his or her evidence
is
admissible to prove that it occurred. If that knowledge was acquired
from someone else then a proper basis must be laid for
admitting it
as hearsay and enabling its weight to be evaluated. And if the
knowledge was acquired only by inference then that
is not evidential
material at all: it is for a court to draw the inference itself upon
proof of primary facts.
[38]
. . . . Merely to allege that that information is within the
“personal knowledge” of a deponent is of little value

without some indication, at least from the context, of how that
knowledge was acquired so as to establish that the information
is
admissible, and if it is hearsay, to enable its weight to be
evaluated.’
[18]
Umgeni filed an application on the morning of the hearing for the

late introduction of three confirmatory affidavits. The affidavits
sought to be introduced were by Mr M Dlamini, the CEO of Umgeni;
Mr S
M Mokonyama, a member of the CFST and Mr S Dube, the Chairperson of
the Bid Evaluation Committee who participated in the evaluation
of
the tender. These affidavits were a belated attempt to fend off the
criticism by the applicant of the reliance by Umgeni on
hearsay
evidence. Counsel for the applicant did not oppose the introduction,
with the express disclaimer that the affidavits did
not do anything
to bolster the case of the first respondent. Rather than excluding
the averments in the opposing affidavit which
are clearly outside the
expertise of Mr Maake, and notwithstanding the introduction of the
three new affidavits, I am satisfied
that the proper approach is to
consider the weight to be given to affidavits in light of there still
not being any certainty as
to which member(s) of the CSFT advanced
particular reasons for scoring NBN above the applicant, and their
precise reasons for doing
so.
[19]
The issue for determination is whether NBN had the requisite
tenderer’s
experience qualifying it to pass functionality
criteria, enabling it to proceed to the final stage of price and
preference where
the 80/20 preferential point system was employed.
The starting point is to have regard to the clear and unequivocal
wording of
the tender invitation. As stated earlier NBN did not
participate in the proceedings, although it was cited as the third
respondent.
The matter must therefore be determined on the evidence
on the record which served before the CSFT and the evaluation
committee
at the relevant time.
Ex post facto
justifications
for the decision taken by an administrator are of no moment,
particularly where the affidavits filed by the parties
in a review
application find no correlation to the documents constituting the
record.
[20]
Mr
Pillay
, in seeking to give content and proper meaning to
the tender invitation, relied on the often quoted extract from
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA
593
(SCA), para 18 where the following is said:
‘
Interpretation
is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument,
or
contract, having regard to the context provided
by reading
the particular provision or provisions in the light of the document
as a whole and the circumstances attendant upon its
coming into
existence. Whatever the nature of the document, consideration must be
given to the language used in the light of the
ordinary rules of
grammar and syntax; the context in which the provision appears; the
apparent purpose to which it is directed
and the material known to
those responsible for its production. Where more than one meaning is
possible each possibility must be
weighed in the light of all these
factors. The process is objective not subjective. A sensible meaning
is to be preferred to one
that leads to insensible or unbusinesslike
results or undermines the apparent purpose of the document.’
[3]
[21]
The
wording
of
the
invitation
to
tender
states
expressly
that
all
tenderers
would be
assessed for functionality on the ‘
basis
of experience in similar projects specific to water treatment plant
sludge handling or similar,
and
conditions in relation to the scope of work’ (my emphasis).
Umgeni places emphasis on the words ‘
similar
’
and ‘
comparable
’
contending that the tenderer would have to show similar expertise to
that required in terms of the skill set.
The words
‘similar’ and ‘comparable’ must be
interpreted as giving context to the expertise required to
supply,
deliver, install, test and commission the mechanical, electrical and
civils works for a ‘water treatment plant’,
and in
particular one concerning the treatment or handling of ‘sludge’.
[4]
As Umgeni
explains in its answering affidavit, the upgrade to the Hazelmere
plant requires that the sludge treatment plant be up-scaled
in terms
of its capacity for the water treatment works from 45Ml/d to 75Ml/d
and then to 90Ml/d, with the capacity of the sludge
treatment
increasing from 1.5Ml/d to 2.7Ml/d.
The
experience required was bifurcated, directed at two distinct skill
sets.
[22]
The applicant accepts that it is not necessary for the successful

tenderer to have the
exact
experience stipulated in the
invitation to tender. What Umgeni appeared to be satisfied with was
that the successful party should
have had experience as close as
possible to what is specified in the invitation – almost akin
to ‘substantial compliance’.
Accordingly, Umgeni granted
to itself a degree of flexibility in terms of scrutinising the bids
for necessary skills it was looking
for in the successful tenderer.
While the exact experience was not necessary, the wording of the
tender invitation does not create
any flexibility in terms of the
requirement of experience in the construction of a water plant and
mechanical sludge operations.
As the applicant points out, this is a
specialised field in which very few companies have experience. It is
not disputed that it
would be risky and potentially hazardous to
award the tender to a party without the requisite standard of
experience.
[23]
In
BKS Consortium v Mayor, Buffalo City Metropolitan
Municipality and others
[2013] 4 All SA 461
(ECG) the tender
document also contained the words ‘similar type’. On the
interpretation of a tender document, the
following was said in
paragraph 94:
‘
The
first and second respondents are not entitled to import additional
criteria or factors not stipulated for. They are not entitled
to have
regard to their own perception of the nature of the contract or of
what is necessary in terms of experience and expertise,
outside of
what is specifically stated in the bid criteria or to interpret the
bid criteria to suit such perceptions.’
[24]
In
LDM
Consulting v Dube Tradeport and others
[2021]
ZAKZDHC 14 the tender document also used the words ‘similar
scope’.
[5]
In
Haw
and Inglis Civil Engineering
(Pty)
Ltd v MEC of Police Roads and Transport: Free State Provincial
Government and others
[2010]
ZAFSHC 51
the tenderer was also required to provide details of prior
experience in ‘similar projects’ to that required.
In
circumstances not dissimilar to those in the matter before me, the
court in
Haw
and Inglis
in
paragraph 34 made the following observations, which resonate with the
argument advanced by Mr
Pillay
of the
ripple or ‘knock-on’ effect that the rejection of one
aspect of the third respondent’s past experience
could have for
its overall assessment:
‘
With
the benefit of the same affidavits mentioned in the afore-going
paragraph, it is clear that the actual score which the second

respondent deserved on experience was five points only, i.e. in
respect of only one project that qualified as “a similar

project”. Obviously this score of five points is also below the
minimum threshold of 30 points and thus the second respondent’s

tender should not have been evaluated any further. Even if this
tender was not disqualified for failing to meet the minimum threshold

of 30 points in respect of functionality the second respondent’s
total score would have been 62.94 points, which is a lower
score than
the applicant’s total score of 78.23. Thus the applicant would
still have been the highest scorer. The effect
hereof is that the
second respondent was not entitled to be awarded the tender and that
there is no rational connection between
the decision made by the
Department with regards to the score and the reason for the decision.
The tender therefore falls to be
reviewed and set aside.’
[25]
The
point stressed by the applicant is that at the time of the filing of
the founding affidavit and supplementary affidavit, it
believed that
NBN had submitted seven certificates as proof of its project
experience.
It was only
after Umgeni filed its answering affidavit that the applicant become
aware that only four certificates were taken into
account in
assessing NBN’s experience.
It was
further contended that there is nothing on the record to indicate
which four certificates were considered.
In tender
disputes, the record must speak for itself.
Affidavits
filed in review proceedings cannot constitute evidence that is not
borne out by the record.
If one has
regard to the score sheet for NBN, under the heading of ‘Tenderer’s
Experience’, which is explained
as ‘
Company
experience in the construction of comparable water/waste water sludge
treatment plants utilising mechanical sludge dewatering
in which the
tenderer undertook work in the mechanical, electrical and civil
disciplines’
,
it is recorded that NBN provided experience of four projects,
receiving a score of 85. This is further elaborated on in the summary

of the report of functionality evaluation which notes that the
contractor (NBN) has four relevant projects,
[6]
and
received a score of 70.90 in comparison to the applicant which was
assessed on two projects, receiving an overall score of 81.33
for
functionality,
based on a weighted average score of 15.
As stated
earlier, the threshold to get through the functionality stage is 70
points.
Anything
below 70 means that you do not progress to the next stage.
The
contention of the applicant is that if NBN had been properly
assessed, it should have been assessed on two rather than four

projects, at a weighted average of 15 each, resulting in a total of
50. These
scores are relevant only
in as much
as they reflect the slimmest of margins by which the third respondent
passed the
functionality stage.
It is the
contention of the applicant that if the court finds any deviation,
this would entail that NBN would not have passed functionality,
and
would have
not been considered for price and preference.
[26]
The applicant contends that the third respondent did not
comply with the strict prescripts of the tender in that a careful
perusal
of the certificates reveals that they did not have the
details of contactable references to enable Umgeni to verify the
information
provided. The tender invitation is worded in peremptory
language, with which the tenderer must comply. In this regard it was
submitted
by Mr
Mthembu
that the certificates issued by the
Steve Tshwete Local Municipality contain the name of the official as
well as the details of
the municipality, providing the necessary
contact details. Insofar as the certificate issued by the Lesedi
Local Municipality is
concerned, the contention was that the
certificate contains the name of the official of the municipality,
and that although the
certificate does not contain an address or
contact details of the relevant official, this could easily have been
established.
[27]
The explanation proffered by Umgeni does not constitute strict
compliance, nor even substantial compliance, with the terms of the

tender. This was considered in
Envitech Solutions (Pty) Limited v
Saldanha Bay Municipality and another
[2015] ZAWCHC 108
para 85
where the court said the following with regard to interpretation of
the terms of a tender:
‘
[85]
When considering the submissions made by applicant, I have [had]
regard to the fact that the tender document falls to be dealt
with as
a legal document. In KPMG Chartered Accountants (SA) v Securefin
Limited and Another
2009 (4) SA 399
(SCA) [Harms DP in dealing with
the interpretation of a document, held as follows at paragraphs [39]
– [40]:
1.
“If a document was intended to provide a complete memorial
of a
jural act, extrinsic evidence may not contradict, add to or modify
its meaning.”
2.
“Interpretation is a matter of law and not of fact and,

accordingly, interpretation is a matter for the court and not for
witnesses …”
3.
“[T]he rules about admissibility of evidence in this regard
do
not depend on the nature of the document, whether statute, contract
or patent ...,”
4.
“[T]o
the extent that evidence may be admissible to contextualise the
document (since ‘context is everything’)
to establish its
factual matrix or purpose` or for purposes of identification, one
must use it as conservatively as possible”.’
[7]
[28]
It is also not in dispute that NBN did not provide a summary
of its experience relevant to the scope of work on similar projects.

Again, on a strict interpretation of the tender document, the
applicant correctly points to a flaw in Umgeni’s assessment
of
the bid of NBN. While not conceding that the application hinged on
this issue or that of the failure to provide a summary of
its
experience and expertise in the area of mechanical sludge dewatering
plants, both counsel were in agreement that the crux of
the
application rested on whether Umgeni acted correctly in accepting
that the four certificates on behalf of NBN met the threshold
for
functionality of its experience in performing the same or similar
work as set out in the tender document. Accepting for the
moment that
Umgeni did not require the exact experience to that set out in the
tender invitation – and that similar experience
would suffice –
the question to be answered is whether NBN met that threshold.
[29]
The principal argument of the applicant is that in terms of
the Promotion of Administrative Justice Act 3 of 2000 (‘PAJA’)

the award of the tender by Umgeni to the third respondent should be
reviewed and set aside on the grounds that it was awarded taking
into
account irrelevant considerations and was not rationally connected to
the purpose for which it was taken. The applicant contends
that the
Bid Evaluation Committee erred in awarding the third respondent a
score of 70.90 in the functionality evaluation stage,
enabling it to
procede to the last stage dealing with price and preference. It was
submitted that the third respondent ought not
to have proceeded
beyond functionality as it would not have surpassed the threshold of
70 points.
[30]
The lens through which the award of the tender to the third
respondent must be scrutinised is the scope of work which requires
the
construction of comparable water or wastewater sludge treatment
plants, using mechanical sludge dewatering. As stated earlier this
is
a specialised field, in which very few companies have the necessary
expertise. The third respondent submitted a bid in its own
name, not
as a joint-venture with any other entity. It is not disputed by
Umgeni that the construction by an inexperienced tenderer
would pose
a risk to the infrastructure, as well having an impact on
environmental and water service delivery to communities.
[31]
The applicant in its bid to win the tender submitted
experience in two projects on sludge dewatering treatment plant
construction.
Each of the projects was distinct from the other and it
is not disputed that there was no overlap in the work evidenced by
the
certificates which were put up by the applicant.
[32]
Three of the four certificates issued to the third respondent
that were taken into account by Umgeni were issued by the Steven
Tshwete
Local Municipality. The first was a final completion
certificate for a contract of approximately R30 million and issued in
June
2021. The second was a completion certificate for work of
approximately R8.4 million issued in December 2020. The third
completion
certificate was for a contract of approximately R11.6
million issued in November 2020. The last certificate taken into
account
in the third respondent’s bid was issued by the Lesedi
Local Municipality in September 2020. It is not evident from the
certificate
as to the value of the works carried out. It is submitted
on behalf of the third respondent that the work carried out for the
Lesedi
Local Municipality was similar or comparable to the scope of
work required in the tender. This certificate bears reference to the

removal of old sewer pumps and the replacement with submersible
pumps, the installation of a pump screen, refurbishment of a pump

house, refurbishment of a steel crane girder and the refurbishment of
what is described as a ‘centrifugal sewer pump’.
[33]
As pointed out by the applicant in its replying affidavit, the
scope of work required of the successful tenderer is to demonstrate

experience in mechanical sludge dewatering. There is no direct
comparison evidence from the work carried out by the third respondent

on behalf of the Lesedi Local Municipality to the nature of work to
be carried out under the tender. The deponent to the answering

affidavit, Mr Maake, further states that the tender invitation did
not require the same or exact experience but similar or comparable

experience in relation to waste water treatment plants utilising
mechanical sludge dewatering. Mr Maake, who has no expertise in

mechanical engineering or water treatment plants, proffers an
explanation for why the experience of the third respondent can be

taken into account. He says, and without attributing his comment to
any member of the CFST, that ‘a sludge dewatering plant
is a
sub-component of a water/wastewater works’, and that it is a
system designed to dewater the treatment sludge from all
upstream
treatment process.
[34]
The explanation by Mr Maake is of no value in as much as he
merely expresses an opinion without laying any foundation for why
such
opinion should be considered as an expert assessment of the
scope of work in terms of the tender. Adopting the most benevolent
approach towards the third respondent, the court, for the purpose of
this decision alone, is prepared to accept the opinion of Mr
Maake
that the certificate from the Lesedi Local Municipality did qualify
as experience of the same or similar work required at
the Hazelmere
Water Treatment plant.
[35]
In respect of the certificates issued by the Steve Tshwete
Local Municipality, the first respondent contends that such work was
carried out in relation to the civil, mechanical and electrical
refurbishment of equipment and waste water treatment works and pump

stations. The first respondent concedes in the answering affidavit
that all of the work reflected in the certificates from the
Steve
Tshwete Local Municipality pertained to work carried out at the
Boskrans Wastewater Works. Mr
Pillay
, on behalf of the
applicant went further and pointed out that the certificates issued
by the Steve Tshwete Local Municipality,
albeit under the same
contract number, are not indicative of the third respondent having
independently carried out the work referred
to. The final completion
certificates refer to the third respondent as being ‘part of a
panel’ of contractors. It is
therefore unclear what precise
part of the overall refurbishment exercise was undertaken by the
third respondent alone. A close
inspection of the certificates issued
in December 2020 and November 2020 indicate that the nature of work
carried out was to ‘install
and commission complete set of 10 x
shaft surface aerators’ and work on a sedimentation tank. This
court does not have the
necessary expertise to determine whether this
constitutes evidence of the same or similar experience set out in the
tender invitation.
[36]
It was submitted by counsel for the applicant that the
certificates from the Steve Tshwete Local Municipality should be
strictly
considered as one project. If one adopts this position, the
third respondent would have only scored points on only two projects
–
one from Steve Tshwete and one from Lesedi municipality - amounting
to 50 points. That would have resulted in the third
respondent
failing to reach the threshold of 70 points in the functionality
stage. The position advanced by the applicant is based
essentially on
all three certificates containing the details of the same contract
number, leading to the inference that they were
not divisible from
each other. In essence they constitute one certificate in terms of
experience.
[37]
In my view rather than simply concentrating on the contract
number reflected on the certificates, the proper enquiry should be
directed
at the content of the certificates rather than their form.
As a starting point Mr
Pillay
referred to the Construction
Industry Development Board Act 38 of 2000 (‘CIDB Act’),
which is applicable to all construction
projects, similar to that
envisioned in the tender invitation. The CIDB Act defines a project
to mean ‘a construction works
contract or a series of related
construction work contracts’. If one has regard to the
certificates provided by the third
respondent, they were issued in
November and December 2020. They are completion certificates, which
makes reference to specific
works undertaken - the installation and
commission of surface aerators and the construction of a
sedimentation tank. In contrast,
if one has regard to the certificate
issued in June 2021, although it bears the same contract number as
the other two certificates,
it makes no reference to any specific
scope of work undertaken by the third respondent. Perhaps more
importantly is that the certificate
issued in June 2021 is entitled
‘Final Completion Certificate’, whereas the other two
certificates are entitled ‘Completion
Certificate’.
[38]
The respondent has not sought to explain the distinction
between the certificates. However, the applicant contends that the
final
completion certificate, by its very nature, is a reflection of
the composite of all works, and would necessarily include the work
in
the earlier certificates. As the third respondent was part of a panel
of contractors attending to various tasks on the project,
each task
completed by the third respondent would result in the generation of a
completion certificate. The final completion certificate
is therefore
not evidence of any specific works undertaken, but confirmation of
the third respondent having been part of the panel
of contractors who
carried out mechanical and electrical works at the Boskrans
Wastewater works.
[39]
The first respondent does not provide any explanation as to
why these certificates from the Steve Tshwete Local Municipality were

considered individually as evidence of third respondent’s prior
experience, or put differently, as experience on three separate

projects. Counsel for the applicant submitted that these certificates
should not be looked at in isolation, as they all pertained
to the
same project, were undertaken at the same site, and for the
refurbishment of the same water treatment plant. At best for
the
applicant, it was contended that the three certificates should be
considered as one in respect of prior experience. On the
other hand,
the best case scenario for first respondent, as submitted by Mr
Pillay,
was that the certificates should be considered as work
experience on two projects only. The final completion certificate
does not
fall within this category. On either assumption, the third
respondent would not have met the threshold of 70 points at the
functionality
evaluation stage.
[40]
Faced with the predicament presented by the Steve Tshwete
Local Municipality certificates, Mr
Mthembu
was constrained to
concede that the final completion certificate could not be considered
as an individual project experience, in
contrast to the two
certificates issued in November and December 2020. The concession is
fatal to the opposition to the review,
as counsel for the first
respondent accepted that if
any
of the third respondent’s
certificates were found to have been incorrectly considered or
evaluated at the functionality stage,
it would follow that the third
respondent would not have passed the functionality evaluation stage.
[41]
In light of the foregoing I am satisfied that on a factual
basis the applicant has succeeded in establishing that the first
respondent
irregularly took into account the three certificates from
the Steve Tshwete Local Municipality. At best, these certificates
constitute
evidence of prior experience on two projects. At worst,
they constitute evidence of work on a single project. On either
scenario,
the third respondent would not have passed functionality.
It follows therefore that the decision to score the third respondent
on four projects was irrational in terms of s 6(2)
(f)
(ii) of
PAJA, in as much as the impugned decision is not rationally connected
to the information before the decision- maker; and
the reasons given
for it. See C Hoexter and G Penfold
Administrative Law in South
Africa
3 ed (2021) at 464-465. Accordingly, the irregularity
constitutes a sufficient ground for the reviewing and setting aside
of the
decision to award the tender to the third respondent in terms
of PAJA.
[42]
The provisions of s 8(1) of PAJA provide that where an
administrative action has been set aside, the court may in
determining an
order that is just and equitable, remit the matter for
reconsideration by the administrator, with or without directions. In
exceptional
circumstances, under s 8(1)(c)(ii)(
aa
) a court may
substitute or vary the administrative action or correct a defect
resulting from such action. The applicant seeks that
the tender be
awarded to it on the basis that having regard to the facts of the
present matter, it would not be just and equitable
for the court to
remit the matter in circumstances when the only party (in the absence
of the third respondent) to have passed
functionality and moved on to
the final stage, is the applicant. In the vast majority of cases
courts have shown a reluctance to
substitute their own decision for
that of the administrator and accordingly the ‘default’
position where a tender has
been set aside is to remit the matter to
the administrator. This position is informed by the view that an
administrator is best
suited, by virtue of its experience and
expertise, to make the right decision.
[43]
Obviously there are instances where an administrator displays
bias in the decision-making process, leaving a court with no
confidence
that the administrator can be entrusted to fairly
adjudicate over a remitted tender process. It was pointed out by Mr
Mthembu
on behalf of the first respondent that while
the evaluation committee may have erred in considering the three
certificates from
the Steve Tshwete Local Municipality as
constituting separate or individual projects on which the third
respondent had worked,
this does not constitute evidence of bias or
impropriety. I agree entirely.
[44]
Section
8 of PAJA, read with s 172 of the Constitution, empowers a court to
prevent injustice by making a just and equitable order.
The court in
MEC
for Health, Eastern
Cape
and
another
v
Kirland
Investments
(Pty)
Ltd
t/a
Eye
and
Laser
Institute
2014
(3) SA 481
(CC)
para
52,
observed that:
‘
This
power enables our courts to regulate consequences flowing from a
declaration of constitutional invalidity. This suggests that
the need
to exercise this power arises if there is a declaration of invalidity
or an administrative action is set aside. If there
is no declaration
of invalidity, generally the exercise of the power may not be
triggered.’
[45]
Counsel for the applicant, with
reference to
Central Energy Fund SOC
Ltd and another v Venus Rays Trade (Pty) Ltd and others
[2022]
ZASCA 54
, submitted that in terms of the wide remedial discretionary
power given to a court to arrive at
any
order which is just and equitable, a
court is not bound to formulate an order that accords strictly with
the prayers in the notice
of motion. The order issued should address
the real dispute between the parties (see
Economic
Freedom Fighters and others v Speaker of the National Assembly and
another
2018 (2) SA 571
(CC), para
211).
In
seeking to persuade the court to award the tender to the applicant
without admitting the matter to the administrator, Mr
Pillay
referred to
Steenkamp
NO v Provincial Tender Board, Eastern Cape
2007
(3) SA 121
(CC), para 29 where the court pointed out that in deciding
on the relief to which an aggrieved party is entitled, ‘the
remedy
must be fair to those affected by it and yet vindicate
effectively the right violated.’
[46]
Counsel for the applicant submitted that the court was in as
good a position as the first respondent to make a decision as to the

successful tenderer. It was submitted that the Bid Evaluation
Committee has already completed its function in terms of the tender

procedure - all tenderers have been scored for functionality and only
the applicant and NBN succeeded in advancing to the last
stage
dealing with the price and preference. It is not in dispute that the
applicants scored 81.33 during the functionality stage.
The applicant
was placed second behind another company which scored 89 points. This
company was however disqualified for reasons
not relevant to this
application. It is also common cause that none of the other
unsuccessful tenderers sought to join or intervene
in these
proceedings, perhaps recognising that they had no prospect of
achieving any success had they done so. A further factor
which
counsel submitted that the court ought to take into account against
remittal is that the work required at the waste water
treatment plant
is urgent, and has been so from the time of the launching the
application. Remittal of the matter would only serve
to delay the
eventual awarding the tender, and the commencement of work on site.
[47]
All of the arguments raised by the applicant are compelling,
and find very little resistance from the first respondent, save for

the contention by Mr
Mthembu
that as part of the process of
awarding the tender, the first respondent is obliged to undertake a
due diligence exercise which
is referred to as a ‘compliance
check’. It would appear that following the decision to award
the tender to NBN, a due
diligence assessment was carried out on the
successful tenderer to evaluate what potential loss or risk may be
incurred in doing
business with the entity prior to the establishment
of the contractual relationship. This accords with sound business
practice.
Amongst the aspects verified is the relevant information
pertaining to the entity’s directors, whether any of the
directors
have any ‘connections’ to any person employed
at the first respondent (to exclude any possibility of an irregularly

awarded tender), the entity’s compliance in terms of the South
African Revenue Services systems and whether the entity has
any
judgments awarded against it. All of this information is then
reviewed and vetted prior to a contract being signed between
the
first respondent and the successful tenderer. It is in this regard
that counsel for the first respondent submits that rather
than the
court awarding the tender to the applicant, it should remit the
matter to allow for the due diligence exercise to be conducted
on the
applicant, thereby respecting the boundaries of separation, to avoid
any notion of judicial overreach.
[48]
In my view while I accept that the scope of work required is
urgent, a court should display a degree of deference to the processes

which the administrator has in place, and which form part of its
usual business practices. To foist a decision on the first
respondent,
without the latter having had the opportunity to conduct
its due diligence exercise, carries with it significant risk. What if
the applicant is awarded the tender by the court, only for the first
respondent to later find out that it is not compliant in terms
of
SARS’ requirements or that it has a series of judgments granted
against it?
[49]
I am of the view that it would be just and equitable for this
court not to substitute its decision for that of the administrator

and that the matter should be remitted with certain directions. In
this regard I invited counsel to propose the terms on which
such
remittal should take place, cognisant of the due diligence check to
be undertaken by the first respondent. I am satisfied
that the order
below takes note of the urgency of the work to be performed, yet at
the same time grants a degree of deference to
the administrator to
exercise its duty as the ultimate contracting party. The order
strives to achieve that which is fair to both
parties, as there is
essentially only one party still in the race.
[50]
In the result I make the following order:
1.
The first respondent’s decision to appoint the third respondent
as the
successful bidder in respect of tender number 2021/041 for the
design, supply, delivery, installation, testing and commissioning
of
mechanical, electrical and civil works in respect of the Hazelmere
Water Treatment Works Sludge Plant Upgrade (‘the tender’)

is reviewed and declared constitutionally invalid.
2.
That the award of the tender to the third respondent by the first
respondent
is set aside, and the tender is remitted for immediate
re-adjudication.
3.
The re-adjudication of the award of the tender is remitted to the
first respondent’s
Bid Adjudication Committee for award on the
basis that the third respondent’s tender did not pass
functionality.
4.
The first respondent is directed to award the tender on the basis
that the applicant
is the highest scoring bid for price and
preference points of those bids that did pass functionality.
5.
The first respondent is directed to immediately undertake and
complete any compliance
check of the applicant’s bid and then
within thirty (30) calendar days of this order to award the tender on
the basis of
the directions in paragraphs 2, 3 and 4 above.
6.
That the costs of this application be borne by the first respondent;
such costs
are to include the costs of two counsel (where so engaged)
including that of senior counsel.
M
R CHETTY
Appearances
For
the Applicants:

Mr I Pillay & Ms L K Olsen
(Ridge
Umhlanga)
Email:
pillayi@me.com
&
olsen@ridgechambers.co.za
Instructed
by:

Cox Yeats Attorneys
Address:

Ncondo Chambers Umhlanga Ridge
Email:
DVlcek@coxyeats.co.za
Ref:

D Vlcek/shn/042/E0960000001
C/o

Stowell & Company
Pietermaritzburg
Ref:

Garyy Campbell COX/0631
For
the Respondent:
Mr T S I Mthembu SC & Mr S H Zondi
Instructed
by:

SD Moloi Associates
Ref:

SDM/SK/008-22
Address:

39 ST Thomas Road Durban
C/o

Diedricks Attorneys
78
Taunton Attorneys
Ref:

J Diedricks
Email:
Moloi@sdmoloi.com
Date
of reserved:

06 May 2022
Date
of delivery:

14 June 2022
[1]
It is common cause that the three members of the CFST responsible
for scoring the bids were Mr SL Mokonyama, Mr R Sewpersad and
Mr A
Mahabeer holding the positions of process engineer, mechanical
technician and Systems Manager respectively.
[2]
First respondent’s heads of argument, para 13: ‘The
scoring criteria for functionality evaluation was based on the

following (weighting percentages indicated in brackets) tenderer’s
experience (30); experience of key personnel (40); quality
assurance
and environmental management (10); method statement (10); and
preliminary programme (10) (see Page 13 of the Record,
Volume 1).’
[3]
It is worth noting that in
CSARS
v Daikin Air Conditioning
(185/2017)
[2018] ZASCA 66
(25 May 2018), Majiedt J in a dissenting judgment
made an interesting observation in paragraphs 31-22, that while the
judgment
in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA), para 18 suggests that the same approach can be
applied to interpreting ‘legislation, some other statutory
instrument,
or contract’, the processes giving rise to the
enactment of legislation and negotiations leading to the conclusion
of a
contract are quite different.
[4]
See
Capitec
Bank Holdings Limited and Another v Coral Lagoon Investments 194
(Pty) Ltd and Others
[2021]
3 All SA 647
(SCA);
2022 (1) SA 100
(SCA), paras 25-26 where
Unterhalter AJA said the following in regard to the approach to
interpretation of words used in texts:
‘
[25]
. . . The much-cited passages from
Natal Joint Municipal Pension
Fund v Endumeni Municipality (Endumeni)
offer guidance as to how
to approach the interpretation of the words used in a document. It
is the language used, understood in
the context in which it is used,
and having regard to the purpose of the provision that constitutes
the unitary exercise of interpretation.
I would only add that the
triad of text, context and purpose should not be used in a
mechanical fashion. It is the relationship
between the words used,
the concepts expressed by those words and the place of the contested
provision within the scheme of the
agreement (or instrument) as a
whole that constitutes the enterprise by recourse to which a
coherent and salient interpretation
is determined. As
Endumeni
emphasised, citing well-known cases, “[t]he inevitable
point of departure is the language of the provision itself”.
[26]
Endumeni
is not a charter for judicial constructs premised
upon what a contract should be taken to mean from a vantage point
that is not
located in the text of what the parties in fact agreed.
Nor does
Endumeni
licence judicial interpretation that
imports meanings into a contract so as to make it a better contract,
or one that is ethically
preferable.’
[5]
LDM
Consulting v Dube Tradeport and others
[2021]
ZAKZDHC 14 para 97:
‘
This
tender document calls for consultants for a
pharmaceutical/bio-technology manufacturing facility. It further
requests under
“Bidder’s experience” for
experience in projects of
similar scope
and under “Experience
of Key Personnel” calls for CVs showing the experience of key
personnel “in projects of
a
similar nature
, size and
monetary value.” (emphasis added)’.
[6]
Page 813 of the record erroneously refers to five projects. It was
common cause that this was a mistake.
[7]
See also
Jocastro
(Pty) Ltd v Ekurhuleni Metropolitan Municipality
2018
JDR 0525 (WCC) para 31:
‘
Our
courts have consistently held that the interpretative process is one
of ascertaining the intention of the parties –
what they meant
to achieve and in so doing, the court must consider all the relevant
circumstances surrounding the contract to
determine what their
intention was in concluding it. From a plain reading of this clause,
it is clear that the objective is to
fulfill the mandate of the
tender which is to ensure,
inter alia
, that the appointed
service provider has the necessary capacity to ensure deliveries are
not delayed. Furthermore, the information
that is required after the
use of the adjective “
fully
” in the last sentence
of the paragraph, denotes the information of the
number
of
persons available to execute the project and their respective
responsibilities. No where does this clause call for the
identity
of the persons to be stated.’ (emphasis in original).