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2022
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[2022] ZANCHC 42
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Defensor Electronic Security (Pty) Ltd v MEC for Cooperative Governance, Human Settlements and Traditional Affairs; Northern Cape Province and Another (1250/2021) [2022] ZANCHC 42; [2022] 4 All SA 82 (NCK) (12 August 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE DIVISION, KIMBERLEY
CASE
NO:
1250/2021
DATE
HEARD:
15 NOVEMBER 2021
DATE
OF REASONS:
12 AUGUST 2022
Reportable:
YES / NO
Circulate
to Judges: YES / NO
Circulate
to Magistrates: YES / NO
Circulate
to Regional Magistrates: YES / NO
In
the matter between:
DEFENSOR
ELECTRONIC SECURITY (PTY) LTD
Applicant
and
THE
MEC FOR COOPERATIVE GOVERNANCE,
HUMAN
SETTLEMENTS AND TRADITIONAL AFFAIRS,
NORTHERN
CAPE PROVINCE
First Respondent
MASICEBISE
BUSINESS SOLUTIONS (PTY) LTD
Second Respondent
Coram:
Nxumalo J
et
Erasmus AJ
REASONS
FOR THE ORDER GRANTED
Per:
NXUMALO J:
INTRODUCTION
:
1.
The applicant in these proceedings is Defensor Electronic Security
(Pty) Ltd, a company duly registered and incorporated in terms of the
company laws of South Africa. The first respondent is a member
of the
Executive Council responsible for the Northern Cape Department of
Cooperative Governance, Human Settlements and Traditional
Affairs.
The second respondent is Masicebise Business Solutions (Pty) Ltd,
also a company registered and incorporated in terms
of the company
laws of South Africa.
2.
It is common cause that the second respondent was the successful
bidder of tender number NC/06/2021, which was published by the first
respondent on 16 April 2021. The tender pertained to the appointment
of a service provider to render security services for the department
at certain of its offices. It is also common cause that the
applicant
and other tenderers unsuccessfully participated in the said tender
process. It is further common cause that the applicant
was informed
of the said result on 31 May 2021. This application was thereafter
urgently lodged on 06 August 2021, in terms of
rule 6(12) of the
Uniform Rules of Court. Pursuant to a directive of this Court, the
application was postponed to 15 November 2021,
for adjudication by a
full bench of this Court.
3.
The applicant’s motion
inter alia
sounded as follows.
That the motion be heard as an urgent one in terms of the provisions
of rule 6 (12) of the Uniform Rules of
Court and that the necessary
condonation be granted to the applicant in respect of non-compliance
with the prescribed time limits,
forms and service. That the decision
of the first respondent to disqualify the applicant in respect of
tender NC/06/2021: Appointment
of a service provider to render
security services to the first respondent be declared
constitutionally invalid, reviewed and set
aside. That the decision
of the first respondent to award the impugned tender to the second
respondent be declared constitutionally
invalid, reviewed and set
aside. That the tender be awarded to the applicant. That the first
respondent be ordered to pay the applicant’s
costs,
alternatively and only in the event that the motion is opposed by
both respondents, that they jointly and severally be ordered
to pay
the applicant’s costs. Lastly, that the applicant be granted
further and/or alternative relief as the Court deems
meet.
4.
The respondents were
inter alia
enjoined to enter an
appearance on or before Friday, 25 June 2021 and to thereafter
deliver their answering affidavits on or before
Wednesday, 21 July
2021. The motion was predicated against founding, supplementary and
replying affidavits. The first respondent
delivered answering and
supplementary answering affidavits to resist the motion and prayed
that the same be dismissed with costs.
The second respondent, for its
own part, did not oppose the motion.
5.
On 15 November 2021, the motion was adjudicated urgently in
terms of
the provisions of rule 6 (12) of the Uniform Rules of Court and the
necessary condonation was granted to the applicant
in respect of
non-compliance with the prescribed time limits, forms and service.
Thereafter, having heard counsel for the applicant
and the first
respondent and having read and considered the documents delivered of
record; this Court thereupon declared the first
respondent’s
decision to disqualify the applicant in respect of the impugned
tender constitutionally invalid, reviewed and
set aside. The impugned
decision to award the tender to the second respondent was
contemporaneously declared constitutionally invalid,
reviewed and set
aside. The applicant’s and second respondent’s bids were
remitted to the first respondent to be re-evaluated
on price. Lastly,
the first respondent was ordered to pay the applicant’s costs,
which costs included costs consequent upon
the employment of two
counsel.
INTERLUDE
:
6.
On 29 November 2021, the second respondent delivered a notice
requesting this Court to provide reasons for the above-mentioned
order. Meanwhile, notwithstanding the abovementioned order, the
second respondent continued to render services to the first
respondent. Consequently, the applicant was constrained to launch a
second urgent motion which was subsequently abandoned because the
first respondent on or about, 26 April 2022, in writing notified
the
second respondent of its intention to terminate its impugned services
by 31 May 2022. The first respondent contemporaneously
indicated that
it intended to appoint the applicant with effect from 01 June 2022,
in substitution.
7.
The second
respondent, in reaction to the foreshadowed termination of the
impugned contract, on or about 19 May 2022, launched an
urgent motion
which was heard by Mamosebo J, on 27 May 2022.
[1]
In that urgent motion, the second respondent sought an interim
interdict restraining the first respondent from terminating the
impugned contract, pending the adjudication and finalisation of a
review application foreshadowed in Part B of its notice of motion.
Mamosebo J reserved judgment and thereafter handed the same down on
31 May 2022, dismissing Part A of the motion with costs.
Consequently,
Part B of that motion is still pending before this
Court.
BRIEF
STATEMENT OF THE RELEVANT FACTS
:
8.
It is common cause that the first respondent published an invitation
to tender on 16 April 2021, with a closing date of 07 May 2021. The
applicant and others duly and timeously submitted their tenders.
According to the tender notice and invitation to tender, there were
certain peremptory requirements that had to be complied with
and a
functionality assessment was applicable. The tenderers had to score
at least 75 points or more to be evaluated on price.
9.
It is significant to point out that the specified rates generically
make provision for the total direct costs of a security guard and a
40% share of overheads, which is an amount charged by a security
company to a client. Paragraphs 3. 1 and 3. 2, of the invitation to
tender, regulating pricing, expressly stipulate as follows:
“
3
PRICING
The following
conditions shall be applicable and form an integral part of the bid:
3.1
For purpose of this contract, use will be made of the relevant
category security officers, as defined
in the order made in terms of
section 51A(2) of the Labour Relations Act… as published
Government Gazette No. 25075 dated
13 June 2003.
3.2
It is expected that the contractor shall pay his/her employees at
least a minimum monthly basic wage,
as prescribed for the Area
concerned in the
Basic Conditions of Employment Act 75 of 1997
:
Sectorial Determination 6: Private Security Sector, South Africa
(Government Gazette No. 29188 dated 1 September 2006.”
10.
A copy of the minutes of the Bid Evaluation Committee (“
BEC
")
meeting held on 25 May 2021, was annexed as “SA12”
to the founding papers. In respect of the applicant,
the following is
stated in the said minutes:
“
Defensor
Security submitted a bid price of R33 601 781.25 for
consideration by the Department, scored 90 points for functionality,
SARS compliant, CSD compliant status report, BBBEE Level 1, form of
offer completed and signed; PSIRA certificate declared valid
and in
order, submitted three (3) years financial statements, submitted
Department of Labour certificate and completed their NCB
forms. Meet
functionality requirement hence considered responsive.
”
[2]
11.
On the same page, the following is also stated in the minutes:
“
Presentation of
PSIRA rates schedule as at March 2021:
The presenter informed
the BEC that the following service provider charged rates not in line
with PSIRA and they are:
·
Sothembela Security Services;
·
Quivor Security Services;
·
Alma Mater Security Services; and
·
Defensor Security
.”
ISSUES
FOR DETERMINATION
:
12.
It is
common cause that on 31 May 2021, the first respondent informed the
applicant that its bid proposal was unsuccessful as same
was
considered unresponsive. The reason why the said proposal was deemed
unresponsive, according to the first respondent was because
the
applicant’s unit price
per
security guard charged was inconsistent with the “
unofficial
”
PSIRA
[3]
rates as at March 2020
and 2021, which posed a serious risk for the first respondent.
13.
It can therefore be deduced from the foregoing that after all had
been said
and done, the following issues congealed for determination
before this Court, to
wit
: (a) whether the application was
urgent; and (b) whether the mere fact that the applicant’s
tendered price was below PSIRA
rates
ipse jure
rendered same
non-responsive. These issues were then adjudicated in turn thus.
Whether
the application was indeed urgent
14.
In urgent
applications, the Court or a Judge may dispense with form and service
provided for in the rules and may dispose of such
matter at such time
and place and in such a manner and in accordance with such a
procedure (which shall be as far as practicable
be in terms of the
rules) as it deems fit.
[4]
Rule
6(12)(b)
expressly stipulates that in every affidavit or petition
filed in support of any urgent application, the applicant must set
forth
explicitly the circumstances which is averred render the matter
urgent and the reasons why the applicant claims that it could not
be
afforded substantial redress at a hearing in due course.
[5]
15.
As far as the issue of urgency is concerned, the applicant contended
as follows.
It only became aware of the impugned award on 31 May
2021. After consultation with its legal representatives on 8 and 15
June,
this application was drafted on 15 to 16 June 2021 and settled
on 18 June 2021. Since the tender is for a limited period of 36
months, any relief sought by it will become completely academic after
the expiry of the said period. If this application was launched
in
the ordinary course, it would have had the effect that at least a
third of the tender period would have lapsed before the hearing
of
this application.
16.
That to the extent that the application implicates and vindicates a
constitutional
right, it is inherently urgent since the applicant
will not be able to vindicate such right in the ordinary course. The
applicant
also contended that it was most impossible for it to launch
an application for an interim interdict to prevent the first
respondent
from implementing the tender, pending the final
determination of a review application. The applicant submits that
this is so since,
in such an application, it would have been required
to demonstrate exceptional circumstances. In addition, the first
respondent
would have undoubtedly alleged that the balance of
convenience favoured it as a result of the fact that it required
security services
on a continuous basis. The urgency of the matter
notwithstanding, it has laid down reasonable time frames for the
delivery of the
record and answering affidavits. The parties were
also able to timely deliver comprehensive heads of argument for the
benefit of
this Court, to which it is grateful.
17.
The first respondent did not seriously argue against the notion that
the motion
was urgent, nor did it allude to any prejudice suffered or
that might be suffered if the matter was to be adjudicated urgently.
All it stated in this regard is that the applicant had not made out a
case for urgency because it had ample time to apply for interim
relief which could have prevented the second respondent from assuming
the performance of the impugned contract on 01 July 2021.
It behoves
repetition that that the application was initially launched on
06 August 2021.
18.
This Court
disagreed with the respondent. Conversely, it agreed with the
applicant that to the extent that the purpose of the relief
sought
was to vindicate a constitutional right, it will not be able to do so
in the ordinary course. It is now settled law that
where allegations
are made relating to abuse of power by any public official or organ
of state, which may impact upon the rule
of law and may have a
detrimental impact on the public purse, the relevant relief ought
normally to be urgent.
[6]
19.
This Court
also found that the motion is commercially urgent. If this
application was launched in the ordinary course, it would
have had
the effect that at least a third of the tender period would have
lapsed before the hearing of this application. Urgency
in our law
does not only relate to some threat to life or liberty, but also to
commercial interests which may justify the invocation
of
rule 6(12)
,
no less than any other interests.
[7]
20.
Even if the
applicant for a moment was dilatory in lodging this application,
lateness of and by itself does not
ipso
facto
derogate urgency. It is so especially regard being had to the fact
that the degree of relaxation of the rules and the ordinary
practice
of the Court was reasonable and commensurate to the degree of
urgency, regard being had to Sections 34, 36 and 39 of the
Constitution.
[8]
In the result,
this Court found that, regard being had to the facts and
circumstances of this case and regardless of the previous
postponement, the motion remained urgent.
Whether
the mere fact that the applicant’s tendered price was below
PSIRA rates
ipse facto
rendered same non-responsive
21.
According
to the applicant, the basis for the first respondent’s finding
that the applicant tender was non-responsive is fundamentally
flawed.
This fundamental flaw, according to the applicant, is evinced from
the first respondent’s conclusion that the applicant’s
tendered price was below PSIRA rates. The applicant contended that
the first respondent made this finding notwithstanding the fact
that
there was no mandatory requirement in the invitation to tender that
prescribed a minimum tender price. According to the applicant,
neither the PSIRA Act
[9]
nor the
Private Security Industry Regulations, prescribe a minimum amount
that must be charged by a security company to a client.
According to
the applicant, all that PSIRA does from time to time is to issue
circulars indicating costing guidelines.
22.
The applicant also contended that to the extent that it was nowhere
prescribed
in the tender that an applicant may not tender below a
specific rate, it was consequently not a mandatory provision of the
tender
that a tenderer will be found to be non-responsive, on that
basis alone. That it is so since the said costing guidelines are
published
merely to provide guidance to both security companies and
their clients as to what is considered reasonable fees (guidelines)
for
security services. According to the applicant, the only reason
why the starting point of the costing guideline is the prescribed
minimum wage is simply because security companies are required to pay
a minimum wage to their employees. What remained to be added
to the
minimum wage was the “
share of overheads
” of each
security company.
23.
The applicant further contended that the first respondent’s
finding that
its tender was non-responsive because it allegedly
charged prices which are inconsistent with the prescribed PSIRA
rates, is patently
informed by a fundamental irregularity in the
evaluation and adjudication of its bid. That it is so since, whilst
the prescribed
rates make provision for the total direct costs of a
security guard and a 40% share of overheads, the first respondent
failed to
take into consideration the variation of the amount charged
by a security company to a client. That it is not prescribed in any
legislation what the minimum amount is that a company may charge a
client. That the fact that the applicant is an established security
company with an established infrastructure and footprint within the
area where the first respondent required the security services
enabled the applicant to reduce its overheads.
24.
According
to the applicant further, the first respondent clearly applied
different and preferential principles when the second respondent’s
tender was evaluated. In doing so, the first respondent discriminated
against the applicant in an unlawful and unconstitutional
manner
which renders the said administrative process irregular and
susceptible to being declared invalid and set aside. The applicant
furthermore contended that the manner in which the first respondent
evaluated the second respondent’s tender as compared
to the
applicant’s demonstrates bias or at least reasonably suspected
bias. That if the first respondent was not biased,
it would also have
found the second respondent non-responsive because its tender price
was below the tendered price of the applicant.
This outcome,
according to the applicant, is paradoxical, regard being had to the
fact that the second respondent tendered an amount
which is less than
its own. The applicant, for its own part, had quoted an amount of
R33, 601 781.25.
[10]
25.
In this
regard, the applicant relied on the provisions of Section 6(2)(a)(ii)
of
THE
PROMOTION OF ADMINISTRATIVE JUSTICE ACT
3 of 2000 (“
PAJA
”).
As far as the finding of the first respondent that the applicant’s
tender was non-responsive is concerned, the applicant
relied on
Section 6(2)(d) of PAJA. In respect of the first respondent’s
failure to disqualify the second respondent, the
applicant relied on
Section 6(2)(c) of PAJA. These said Sections expressly and
respectively empower this Court to review an administrative
action if
the administrator who took it acted under a delegation of power which
was not authorised by the empowering provision;
[11]
or the action was materially influenced by an error of law;
[12]
or the action was procedurally unfair.
[13]
26.
The applicant also contended that the first respondent’s
procedural irregularities
consisted primarily of distinct errors in
the process of adjudicating the impugned tender. First, the tender of
the applicant was
excluded from further consideration upon the first
respondent erroneously finding that the applicant’s tender was
non-responsive.
This on the basis that the unit price charged per
security guard was inconsistent with PSIRA rates. According to the
applicant,
the said finding was outside of the power of the first
respondent because no such mandatory prescribed requirement appears
in the
tender specifications or otherwise.
27.
It also contended that the impugned finding was also patently
incorrect, for
the following reasons. The PSIRA rates are merely
guidelines and nothing more. There is no mandatory provision in the
tender that
precluded tenderers from tendering below PSIRA rates. The
first respondent completely failed to appreciate that the PSIRA’s
guideline prices consist of a minimum wage of a security guard as
determined in terms of sectoral determination in terms of
THE
BASIC CONDITIONS OF EMPLOYMENT ACT
75 of 1997
and a 40% share
with regard to the overhead costs of a security company.
28.
According to the applicant, if the required additional contributions
are added
to the total payment that has to be made to a grade C
security guard in an urban area which amounts to R12 507.03, the
total
cost to the company for the said security would amount to
R13 423.17. When the 40% overheads are added, the total amount
comes
to R18 792.44. In the premise, the applicant contended that it
did not charge a rate below the total minimum direct costs per
security
guard.
29.
Regard being had to the foregoing, the applicant contended that its
tendered
price was significantly above the prescribed minimum and
only marginally below PSIRA’s guideline prices, which include
the
40% share, pertaining to overheads. In the premise, it contended
that there was no rational basis for the statement that the applicant
posed a risk to the first respondent to appoint the applicant simply
because its rate was below the PSIRA rates. According to the
applicant, the reason given by the first respondent to disqualify it
from the tender process was therefore patently informed by
a
fundamental irregularity in the evaluation and adjudication of the
applicant’s offer to tender. That it is so since the
applicant
did not, charge a unit price which was inconsistent with PSIRA rates.
30.
The
applicant also contended that the first respondent ought to have
disqualified the second respondent instead on the basis that
the
second respondent failed to comply with certain mandatory
requirements. That even if the first respondent honestly believed
that the applicant’s tender was non-responsive because its
tendered amount was too low, it did not make any sense for the
first
respondent to then proceed to award the impugned tender to the second
respondent. The applicant said it is so since the first
respondent’s
tendered price was below its own. That the second respondent’s
tender ought to have been disqualified
based on the fact that it
could not have passed the mandatory requirements of the tender and
its tender could not have passed the
mandatory threshold score of 75,
in respect of functionality. This aspect, according to the applicant,
rendered the procurement
unconstitutional, in that the first
respondent discriminated unjustifiably against the applicant. This
infringed on its fundamental
right entrenched in Section 9 of the
Constitution.
[14]
31.
The applicant also contended that the two answering affidavits
delivered by
the first respondent advanced various new reasons why
the applicant was found to be non-responsive. That to the extent that
these
new reasons appear nowhere from the record, same were simply an
afterthought that sought to justify what was patently an irregular
and constitutionally invalid decision. That the appropriate remedy in
the circumstances was to refer the evaluation of its tender
and that
of the second respondent back to the first respondent for
reconsideration.
32.
In sum,
according to the first respondent, the foregoing tenderers were
disqualified on the basis that same were allegedly non-responsive
because the respective unit prices charged by the said tenderers
per
security guard were inconsistent with the unofficial PSIRA
[15]
rates, as at 2020 and 2021, which posed a serious risk for the first
respondent. It is apparently for this singular reason, according
to
the first respondent, its BEC
[16]
concluded that the second respondent was the only bidder that
complied with all the conditions of the tender with an amount of
R32 277 866.24, as its tendered price.
33.
The applicant’s tendered price for dayshift grade C security
guards amounted
to R16 500.00 and R 16 700.00, for
nightshift. In terms of PSIRA’s unofficial pricing structure
for 2021, with
effect from March 2021, different grades of security
guards and categorises areas between 1 to 3, are specified. Areas 1
and 2,
being urban areas and 3 being rural. The minimum rate for
security guards in respect of urban areas is slightly higher than the
prescribed rates for rural areas.
34.
Annexure SA13, is a document compiled by the first respondent that
contains
a summary of the tendered prices of all the tenderers
including the “
PSIRA rates as at March 2020 and as at March
2021
”. Annexed to the founding papers is also annexure
SA14, the contract pricing structure effective March 2021, as
published
by PSIRA. Of significance, is that a specific distinction
is made between urban areas and rural areas. In urban areas, guards
are
generally paid more as compared to rural areas. There is also a
distinction between the different grades of security guards.
35.
The first respondent reflected the minimum rates in respect of urban
areas as
R18 328.86 and in respect of rural areas as R17 889.91.
According to the applicant, whilst it was not entirely clear where
the first respondent obtained the exact figures referred to by it,
the mistake made by the first respondent is fairly obvious.
It said
it is so since the prescribed PSIRA rates has a subtotal containing
the specific minimum payment that has to be made to
a security guard;
the total direct costs; and the share of overheads. The prescribed
PSIRA rates has a subtotal containing the
specific minimum payment
that has to be made to a security guard, the total direct costs and
the share of overheads.
36.
The minimum salary that has to be paid to a grace C security guard in
respect
of an urban area was consequently R13 423.17. The
minimum salary that should be paid to a grade C security guard in
respect
of a rural area is R12 883.49. The “
share of
overheads”
is calculated as a 40% of the direct costs that
will have to be expended by a security company to enable it to render
the services.
This 40% is merely to calculate what is considered to
be a reasonable rate charged by a security company. This amount is
not paid
to a security guard.
37.
It is obvious, according to the applicant, that the “
share
of overheads
” will be different for each and every security
company. There is an obvious advantage to a company with an
established infrastructure.
Where a security company has been in
business for a long period (like the applicant) the overhead costs
can be reduced significantly.
It would be so, according to the
applicant, since there would be an obvious saving where the applicant
already owns vehicles, buildings,
firearms and equipment.
38.
That the rates charged by the applicant in the tender includes the
minimum payment
that will have to be made to the security guards, the
share of overheads calculated by the applicant and the profit of the
applicant.
The applicant can easily calculate its overhead costs.
Over the years the applicant has developed a specific model that
makes it
easy to calculate the applicant’s overhead costs. This
makes it easy for the applicant to calculate the total rate that will
then include the applicant’s profit.
39.
According to the applicant, based on the aforesaid, there was simply
no basis
for the first respondent to disqualify the applicant based
on the allegation that the applicant’s rates were too low. What
is prescribed in the PSIRA rates is the minimum payment that has to
be made to a security guard. It is most certainly not prescribed
by
PSIRA that a security company is obliged to allocate 40% of its share
of overheads to each security guard. Equally important,
the bid
specifications also did not require the 40% overheads in the rates
per security guard in the tenders.
40.
It is against this backdrop that the applicant contended that the
statement
made by the BEC that the applicant charged rates not in
line with PSIRA, was patently incorrect. In the premise, the
applicant
contended that the finding of the first respondent that its
tender was non-responsive simply had no factual basis and certainly
no empowering provision to have made the finding exists.
Consequently, according to the applicant, the foregoing constitutes a
reviewable irregularity in the tender process.
41.
It is trite
in our law that if the material facts are in dispute and there is no
request for the hearing of oral evidence, a final
order will only be
granted on motion, if the facts as stated by the respondent together
with the facts alleged by the applicant,
that are admitted by the
respondent, justify such an order.
[17]
42.
The first
respondent, for its own part, averred and contended
inter
alia
as
follows. That
THE
PREFERENTIAL PROCUREMENT POLICY FRAMEWORK ACT
5 of 2000 (the “
PPPFA
”)
gives effect to Section 217 (3) of the Constitution and provides the
framework for implementation of procurement policy
contemplated in
Section 217 (2).
[18]
The
implementation of the PPPFA is in turn enabled by the Preferential
Procurement Regulations (the PPR). The PPR regulates bids
based on
functionality as a criterion.
[19]
43.
The first respondent contended that the applicant was evaluated on
two aspects;
to
wit
: pricing in terms of PSIRA rates and
maintenance of its security system. With regard to the latter, the
applicant charged R1.4
million, whilst the second respondent did not
charge anything. With regard to the former, according to the first
respondent, the
implication of charging rates below the relevant
PSIRA rates was that the applicant would have paid its security
personnel salaries
that are less than those prescribed by the said
authority, thereby posing a risk to the first respondent, in that it
would disrupt
the supply of services by disgruntled employees.
44.
The first respondent also averred and contended as follows. That the
mandate
of PSIRA is derived from
THE PRIVATE SECURITY INDUSTRY
REGULATION ACT
56 of 2001. The primary objective of the said
authority is to regulate the private security industry and to
exercise effective control
over the practice of the occupation of
security service providers in the public and national interests and
in the interest of the
private security industry itself. At present,
more than ten thousand two hundred security businesses are registered
with PSIRA.
45.
That the costing guideline issued by PSIRA from time to time is
therefore published
to provide security companies and their clients
(or prospective clients) with guidelines as to what constitutes
reasonable fees
for security services. The basis of the costing
guidelines is the prescribed minimum wage as determined by relevant
legislation.
Statutory non-negotiable amounts are then added followed
by an estimated share of overhead costs, which historically amounts
to
40%.
46.
That the implications of this costing guideline are that a security
company
not charging the same amount as the PSIRA costing guidelines
would not be able to pay the minimum prescribed wage; or the
non-negotiable
statutory amounts and would not be able to cover the
overheads of the security company. The security company would also
not be
able to make a profit. That a security company charging an
amount less than the PSIRA guideline is walking a thin line. That it
so since any unforeseen circumstance or expense could result in a
loss unless the security company pays its employees less than
the
prescribed minimum wage, ceases to make the non-negotiable statutory
contributions or reduces its overheads.
47.
That the foregoing is relevant in the adjudication of the bids for
rendering
security services because PSIRA, is uniquely positioned to
be able to advise an entity such as the first respondent through
costing
guidelines. That a company willing to accept the minimum
PSIRA rates or less will in all probability be able to pay the
minimum
prescribed wage, statutory contributions and cover overheads.
Nothing more. That the risks associated with such an arrangement and
the acceptability of such risks for all the parties involved are left
for the parties to decide.
48.
That the unsatisfactory ramifications in these circumstances for the
first respondent
are obvious. Having a security company that can at
best break even does not bode well for consistent satisfactory
service delivery.
That a security company that operates at a loss
creates even greater service delivery concerns. All too frequently,
employees of
loss-making companies have been forced to bear the brunt
of the loss by having their wages reduced. A contract workforce
consisting
of hard done by security guards charged with protecting
the employees and premises of the first applicant would pose obvious
risks
to the first respondent.
49.
Whilst it was common cause that the applicant’s tendered price
for dayshift
grade C security guards amounted to R16 500.00 and
R16 700.00, for nightshift, the said 2020 rates were used only
because
at the time the invitation to tender was published, the 2021
rates had not yet been published. The “
unofficial
”
rates which took effect in March 2021 were R17 406.13, for urban
areas and R16 593.46, for rural arears. The undercharging
of the
applicant was considered a risk by the applicant because it implied
an underpayment in salaries of security personnel. The
mere fact that
a tenderer is functionally responsive does not automatically qualify
such a tenderer to be awarded the tender.
50.
It would not be in the public’s best interest and contrary to
Section
217 of the Constitution, for an organ of state to pay an
amount exceeding what is considered reasonable within a certain
industry.
On the other hand, paying an amount which in all
probability would result in a bidder being unprofitable would also
not be in the
best interest of the public as consistent service
delivery would be at peril. That the decision to consider a bid price
below a
pre-determined amount as unresponsive is rational as it would
prevent the awarding of contract to bidders at prices that is clearly
not sustainable. It is so regard being had to the provisions of the
Preferential Procurement Regulations, in terms of which an
accounting
officer or authority is enjoined to ensure that the prices paid for
services are market-related. This decision is also
in line with the
empowering provision as stated in paragraph 1.2.27 of the tender
document.
51.
That paragraph 3. 7 of the invitation to tender, also requested
bidders to take
cognisance of and make provisions for the new
security sector rates as published by PSIRA, at the commencement of
the contract
in their pricing structure. Paragraph 1.2.27, on the
other hand, stipulated that a responsive tender is one that conforms
to all
the terms and conditions of the tender, without material
deviation or qualification.
52.
A material
deviation or qualification is deemed to be one which, in the
employers’ opinion, would detrimentally affect the
quality,
service or supply identified; significantly change the employer’s
or the tenderer’s risks and responsibilities
under the
contract; or affect the competitive position of the other tenderers
presenting responsive tenders if it were to be rectified.
In terms of
this provision, a tender that is deemed unresponsive must be rejected
and not allowed to be made responsive by correction
or withdrawal of
the non-conforming deviation or reservation.
[20]
53.
In the
premise, the first respondent submitted that PSIRA with more than
10 200 members has a membership that is representative
of the
security service industry such that it is well positioned to be able
to provide a costing guidelines that can be followed
to ascertain
what is reasonable in the industry. To this extent, the respondent
contended that the decision to use the PSIRA costing
guidelines is
reasonable and rational. It was also submitted for the respondent
that the decision to consider a bid price below
a pre-determined
amount as unresponsive, is rational as it would prevent the awarding
of a contract to bidders at prices that are
clearly not sustainable.
That it is so regard being had to the provisions of the Preferential
Procurement Regulations, in terms
of which an accounting officer or
authority is enjoined to ensure that the prices paid for services are
market-related. That the
impugned decision was also in line with the
empowering provisions as stated in the tender document. So the first
respondent’s
argument went. The Republic is one sovereign,
democratic state founded on
inter
alia
supremacy of the Constitution and the rule of law, regard being had
to Section 1(c) of the Constitution. The import of the foregoing
is
the fact that this Constitution is the supreme law of the Republic,
law or conduct inconsistent with it is invalid, and the
obligations
imposed by it must be fulfilled.
[21]
It is so that the Bill of Rights applies to all law and binds all
arms of government and all organs of state.
[22]
It is also so that everyone is equal before the law and has the right
to equal protection and benefit of the law.
[23]
It is against this backdrop that Section 33(1) of the Constitution
expressly arrogates everyone the right to administrative action
that
is lawful, reasonable and procedurally fair.
54.
Section
39(1) of the Constitution, for its own part, expressly enjoins every
Court, Tribunal or forum, when interpreting the Bill
of Rights to
promote the values that underlie an open and democratic society based
on human dignity, equality and freedom. Section
39(2) of the
Constitution contemporaneously enjoins every Court, Tribunal or forum
to promote the spirit, purport and objects of
the Bill of Rights. It
is so that, when organs of state at all spheres of government, like
the first respondent, or any other institution
identified in national
legislation, contracts for goods or services, they must do so in
accordance with systems which is fair,
equitable, transparent,
competitive and cost-effective.
[24]
55.
Section 172(1)(b) of the Constitution, for its own part, expressly
empowers
this Court, when deciding a constitutional matter within its
power to make any order that is just and equitable, including (i) an
order limiting the retrospective effect of the declaration of
invalidity; and (ii) an order suspending the declaration of
invalidity
for any period and on any conditions, to allow competent
authority to correct the defect.
56.
In its supplementary answering affidavit, the first respondent
queerly attempted
to raise new reasons why the applicant should have
been found to be non-responsive. The applicant sought to reply to
these allegations
in its replying affidavit. This Court however do
not think those issues, true or false are germane in these proceeding
and therefore
do not determine them.
57.
It would be
unfair on the applicant to determine these issues in these
proceedings simply because it has come to Court in order
to deal with
the reason which was conveyed to it as the basis on which the
decision to declare its bid proposal unsuccessful; to
wit
:
because its unit price charged
per
security guard is inconsistent with the “
unofficial
”
PSIRA rates as at March 2020 and 2021. It is trite in our law that it
is not open to a respondents in review applications
to raise other
defences for the first time in its answering papers.
[25]
58.
It is also
trite that an organ of state may only act within the powers lawfully
conferred upon it. In the celebrated case of
Fedsure
v Greater Johannesburg Transitional Council
,
[26]
the first decision in which the Constitutional Court directly relied
on the rule of law to assess the constitutional validity of
legislation, the apex Court said the following, which in my view, is
apposite in these proceedings:
“
[I]t is a
fundamental principle of the rule of law,
5
2
recognised
widely, that
the
exercise of public power is only legitimate where lawful. The rule of
law - to the extent at least that it expresses this principle
of
legality - is generally understood to be a fundamental principle of
constitutional law.
This
has been
recognised
in other jurisdictions. The principle is also expressly recognised in
the 1996 Constitution…
It seems central to
the conception of our constitutional order that the legislature and
executive in every sphere are constrained
by the principle that they
may exercise no power and perform no function beyond that conferred
upon them by law…”
At
least in this sense, then, the principle of legality is implied
within the terms of the Interim Constitution. Whether the principle
of the rule of law has greater content than the principle of legality
is not necessary for us to decide here. We need merely hold
that
fundamental to the Interim Constitution is a principle of
legality…”
[27]
59.
THE
PUBLIC FINANCE MANAGEMENT ACT
1 of 1999 (the “
PFMA
”),
for its own part expressly stipulates that in the event of any
inconsistency between it and any other legislation, it
prevails.
[28]
In other words, the PFMA trumps all other legislation inconsistent
with it. Section 38(1)(a) of the PFMA, expressly requires accounting
officers for departments, trading entities or constitutional
institutions to
inter
alia
ensure that they have and maintain: (i) effective, efficient and
transparent systems of financial and risk management and internal
control; (ii) systems of internal audit under the control and
direction of audit committees complying with and operating in
accordance
with regulations and instructions prescribed in terms of
Sections 76 and 77 of the PFMA; (iii) appropriate procurement and
provisioning
systems which are fair, equitable, transparent,
competitive and cost-effective; and (iv) systems for properly
evaluating all major
capital projects prior to final decision on the
project.
60.
Section
38(1)(b) of the PFMA, on the other hand, renders accounting officers
responsible for the effective, efficient, economical
and transparent
use of the resources of departments, trading entities or
constitutional institutions. It requires accounting officers
to take
effective and appropriate steps to: (i) collect all monies due to
departments; (ii) prevent unauthorised, irregular and
fruitless and
wasteful expenditure and losses resulting from criminal conduct; and
(iii) manage available working capital efficiently
and
economically.
[29]
61.
Accounting
officers are also responsible for the management, including the
safe-guarding and maintenance of assets, and the management
of
liabilities of departments, trading entities and constitutional
institutions.
[30]
It is also
the responsibility of accounting officers to comply with any taxes,
levies, duties, pensions and audit commitments as
may be required by
legislation and to settle all contractual obligations and pay all
monies owing; including inter-governmental
claims, within the
prescribed or agreed periods.
[31]
Accounting officers are further obliged to comply and ensure
compliance by departments, trading entities or constitutional
institutions,
with all the provisions of the PFMA.
[32]
62.
Section 45 of the PFMA, for its own part, expressly enjoins other
officials
in any department, such as the respondent, to
inter alia
ensure that systems of financial management and internal control
established for those departments are carried out within the areas
of
responsibility of those officials; to take responsibility for the
effective, efficient, economical and transparent use of financial
and
other resources within those officials’ areas of
responsibility; to take effective and appropriate steps to prevent
within those officials’ areas of responsibility; to take
effective and appropriate steps to prevent within those officials’
areas of responsibility, unauthorised expenditure, irregular
expenditure and fruitless and wasteful expenditure and any other
under- recollection of revenue due; to comply with the provisions of
the PFMA, to the extent applicable to those officials, including
any
delegations and instructions in terms of Section 44 of the PFMA; and
to take responsibility for the management, including the
safeguarding
of assets and the management of the liabilities, within those
officials’ areas of responsibility.
63.
On the other hand, Section 6(2) of PAJA, expressly empowers a Court
or Tribunal
to judicially review an administrative action if-
“
(a)
the administrator who took it- (i) was not authorised to do so by the
empowering provision; (ii) acted under a
delegation of power which
was not authorised by the empowering provision; or (iii) was biased
or reasonably suspected of bias;
(b)
a mandatory and material procedure or condition prescribed by an
empowering provision was not complied with;
(c)
the action was
procedurally unfair;
(d)
the action was materially influenced by an error of law;
(e)
the action was taken- (i) for a reason not authorised by the
empowering provision; (
ii) for an ulterior purpose or motive;
(iii)
because irrelevant considerations were taken into account or
relevant considerations were not considered;
(iv) because of the
unauthorised or unwarranted dictates of another person or body; (v)
in bad faith; or (vi) arbitrarily or capriciously;
(f)
the action itself— (i)
contravenes a law or is not
authorised by the -empowering provision; or (ii) is not rationally
connected to (aa) the purpose for
which it was taken;
(bb) the
purpose of the empowering provision; (cc) the information before the
administrator; or (dd) the reasons given for it by
the administrator;
(g)
the action concerned consists of a failure to take a decision;
(h)
the exercise of the power or the performance of the function
authorised by the empowering provision, in pursuance
of which the
administrative action was purportedly taken, is so unreasonable that
no reasonable person could have so exercised
the power or performed
the function; or
(i)
the
action is otherwise unconstitutional or unlawful
.”
[33]
64.
It is so
that the test for rationality was formulated in
Pharmaceutical
Manufacturers Association
.
[34]
The Court held that at minimum, when any public power is being
exercised, it is required that there be a rational relationship
between the exercise of power and the purpose for which the power was
given.
[35]
The Court held that
if such relationship cannot be found, the exercise of the power
(public) is irrational, arbitrary, inconsistent
with the requirements
of the Constitution and therefore unlawful.
[36]
65.
It is also
so that in
Democratic
Alliance v The President of the Republic of South Africa and
Others
[37]
,
the test was aptly summarised as follows.
[38]
The primary focus of a rationality review is premised on the
valuation of a relationship between means and ends. This relationship
is in the form of a connection or link between the means commissioned
to attain a purpose and the purpose itself. The objective
of the
evaluation is neither to decide whether specific means will attain
the purpose nor is it to determine whether some means
will achieve
the purpose better than other means. The evaluation is only concerned
with whether the means commissioned are rationally
related to the
purpose for which the power was conferred. If it is found that there
is a rational relationship, then the decision
is constitutional.
[39]
66.
In
Allpay Consolidated Investment Holdings (Pty) Ltd and Others
v Chief Executive Officer of the South African Social Security Agency
and Others
2014 (1) SA 604
(CC) at paras 28 to 30, the
following was said regarding the materiality of irregularities:
“
[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.
This
legal evaluation must, where appropriate, take into account the
materiality of any deviance from legal requirements, by linking
the
question of compliance to the purpose of the provision, before
concluding that a review ground under PAJA has been established.
[29]
Once
that is done, the potential practical difficulties that may flow from
declaring the administrative action constitutionally
invalid must be
dealt with under the just and equitable remedies provided for by the
Constitution and PAJA. Indeed, it may often
be inequitable to require
the re-running of the flawed tender process if it can be confidently
predicted that the result will be
the same.
[30]
Assessing
the materiality of compliance with legal requirements in our
administrative law is, fortunately, an exercise unencumbered
by
excessive formality. It was not always so.
Formal
distinctions were drawn between “mandatory” or
“peremptory” provisions on the one hand and “directory”
ones on the other, the former needing strict compliance on pain of
non-validity, and the latter only substantial compliance or
even
non-compliance. That strict mechanical approach has been discarded.
Although a number of factors need to be considered in
this kind of
enquiry, the central element is to link the question of compliance to
the purpose of the provision. In this Court
O’ Regan J,
succinctly put the question in ACDP v Electoral Commission as being
“
whether
what the applicant did constituted compliance with the statutory
provisions viewed in the light of their purpose.”
This
is not the same as asking whether compliance with the provisions will
lead to a different result.
”
[40]
67.
According to PSIRA’s Industry Circular dated 24 July 2020, the
Illustrative
Contract Costing Guideline, PSIRA, itself expressly and
unambiguously state that the said circular “…
is not
an official PSIRA document and is distributed without prejudice.”
That its purpose is limited only; to
wit
: (a) for security
business to recognise and understand what employee costs they will
have to take into consideration in order to
comply with labour
legislation; (b) for security business to be mindful of specific and
other costs of operations that must be
considered whilst quoting for
security services and their impact on overall cost of business; (c)
for consumers and prospective
consumers of security services to
consider the contents thereof when budgeting and procuring security
services, in particular guidance
for considerations of requests for
quotations, request for proposals and competitive bids. Most
importantly statutory obligations
of contractual parties in respect
of prescribed amounts payable by security businesses for such
services. The variable costs as
indicated in the Illustrative
Contract Costing Guideline that are non-negotiable statutory amounts
provided for in terms of the
labour law; and (d) the last Section of
the Guideline provides for an estimated share of costs of the
security business. In this
regard, the Authority historically uses
40% of the variable costs and continue to do so purely to ensure
consistency in the costing
structure for deployment of security
officers going forward.
68.
It is significant to point out that the 40% share of overheads is
solely intended
to cover all other costs associated with providing
the security service i.e. liability and other insurance; payroll and
administrative
costs; control centre; transport costs (vehicle,
maintenance and fuel); fixed infrastructure, rates and taxes;
registers; security
aids; occupational health and safety compliance;
management and supervision and other statutory fees payable.
69.
Of
significance also is the fact that PSIRA accepts that the list is not
exhaustive of the costs (and percentage share) because
the foregoing
may differ from business to business. PSIRA also accepts that in
addition to a percentage provided for the share
in overhead costs,
the Guideline excludes VAT as well as net profit, as the targeted
profit margin will differ from business to
business. With reference
to the foregoing, PSIRA expressly advises that the guidelines are not
intended to negate or undermine
fair competitive business practices
and/or to undermine, promote or encourage uncompetitive market
practices in whichever form
or shape within the private security
industry or sector.
[41]
70.
In the
government procurement context, it has been well said that a
“
competitive”
system
would refer to a system that involves a process of “
shopping
around
”
for the best possible deal.
[42]
The word “competitive” in Section 217 (1) of the
Constitution therefore means that government contracts should be
awarded only after a number of entities have been afforded an
opportunity to compete for a particular contract. At the same time,
where competitive procedures are used for the procurement of goods
and services, this must give rise to efficiency and
cost-effectiveness.
71.
Thus, while
the principle of cost-effectiveness may, at times, limit or qualify
the use of competitive procedures, when use is made
of competitive
procedures, such procedures must enhance or reinforce the principle
of cost-effectiveness. The latter, it has been
well said, to a large
extent depends on genuine and sustained competition.
[43]
At all times therefore, the principles of competitiveness and
cost-effectiveness in Section 217(1) of the Constitution are
interrelated
and interconnected.
72.
The
foregoing is also in concert with
THE
COMPETITION ACT
89 of 1998
, which was promulgated in recognition that an efficient,
competitive economic environment, balancing the interests of workers,
owners and consumers and focussed on development to the benefit of
all South Africans. It should be borne in mind that one of the
advantages of competition is that an organ of state making use of
competitive procedures is in apposition to compare prices, quality
etcetera,
and can
choose to contract with the party offering the best possible value.
As correctly pointed out by Goyder, competition reduces
the risk of
goods or services produced not being wanted or not wanted at the
price which they are offered.
[44]
73.
It has thus
been well said that the fact that the principle of cost-effectiveness
has been included in Section 217(1) of the Constitution,
serves to
illustrate the importance attached to efficiency in government
procurement procedures. It also serves to illustrate that
even though
the principles of competitiveness and cost-effectiveness both concern
the attainment of value for money, they are not
synonymous.
[45]
74.
Whilst it
is so in our law that when an organ of state variously limits the
scope of its own powers, thereby preventing it from
exercising the
powers granted it by the legislature, such a limitation of its powers
is in principle unlawful.
[46]
Whilst it is also so that organs of state are permitted to formulate
and rely on policies, guidelines or standards in exercising
their
discretionary powers in order to structure their discretion and to
ensure equality of treatment.
[47]
It is also so that, if the organ of state does not properly consider
the merits of the case before it, but treats the policy, guideline,
standard or precedent as a rigid rule or decisive factor, such a
decision will not be lawful. In
Moreletta
Shopping Centre v Liquor Board and Another
1987 (3) SA 505
(T), that Court had to decide on the legality of a
decision by the liquor board to refuse to grant a bottle store
license. The
board before it made the decision, had formulated a
policy not to allow a bottle-store in small shopping centres serving
residential
areas. That Court held that the board, in refusing the
license had blindly adhered to a fixed policy and set the decision
aside.
[48]
75.
In
Richardson and Others v Administrator of the Transvaal
1957 (1) SA 521
(T) 530B-C, it was held as follows:
“
[T]hose guides
must not develop into hard and fast rules which preclude the person
exercising the discretion from bringing his mind
to bear in a real
sense on the particular circumstances of each and every individual
case coming up for decision.”
[49]
76.
According to De Smith, the jurisprudential basis of this ground of
review:
“…
is to
ensure that the perfectly legitimate administrative values, those of
legal certainty and consistency, may be counteracted
by another
equally legitimate administrative value, namely, that of
responsiveness. While allowing rules and policies to promote
the
former value, it insists that the full rigour of certainty and
consistency be tempered with the wiliness to make exceptions,
to
respond flexibly to unusual situations and to apply justice in the
individual case.”
[50]
77.
In
JSE
v Witwatersrand Nigel Ltd
,
capricious decision making was equated with the failure of an
administrator to apply its mind to a matter.
[51]
It has been well said that applying one’s mind to the matter
may be equated with the umbrella requirement of lawful administrative
action or administrative legality. It was therefore held that the
failure to apply the mind might be demonstrated by the proof
that:
“
The decision
was arrived at arbitrarily or capriciously or mala fide
as
a result of unwarranted adherence to a fixed principle
or
in order to further an ulterior or improper purpose; or
that
the [administrator] misconceived the nature of the discretion
conferred upon him and took into account irrelevant consideration
or
ignored relevant ones.”
[52]
78.
This Court
found that the impugned decision fell outside of the power of the
first respondent because no such mandatory prescribed
requirement
appears in the tender specifications or otherwise. It is so since as
evinced above, the mere fact that the applicant’s
tendered
price was below PSIRA rates did not
ipse
facto
render
same non-responsive. In the premise, this Court found that the first
respondent’s decision to consider the applicant’s
bid
proposal unsuccessful on the basis that its unit price charged per
security guard was inconsistent with PSIRA
[53]
rates as at 2020 and 2021, which allegedly posed a serious risk for
the first respondent, was constitutionally invalid and therefore
fell
to be reviewed and set aside.
79.
It can be deduced from the foregoing that the PSIRA guide, is not a
hard and
fast rule which precludes the first respondent from bringing
its mind to bear in a real sense on the particular facts and figures
behind each and every individual price tendered by the tenderer. That
much is said by PSIRA itself. It was also evident that the
first
respondent’s decision to disqualify the applicant in respect of
the impugned tender was not only procedurally unfair
but also
materially influenced by an error of law. Conterminously, this Court
also found that the decision was not only taken for
a reason not
authorised by the empowering provisions but also because irrelevant
considerations were taken into account or relevant
factors were not
considered.
80.
This Court concluded regard being had to the facts and the applicable
law that
the first respondent’s decision was materially
influenced by an error of law and/or procedurally unfair. Having
established
factually that an irregularity occurred, determined that
the deviance was so material that same fell to be reviewed and
set-aside
under the relevant provisions of PAJA; to
wit
:
Sections 6(2)(a)(ii); 6(2)(d) and 6(2)(c). On the face of it, the
impugned tender did not stipulate anywhere that tender prices
should
not be below PSIRA rates. Regard being had to the foregoing, the
applicant’s prices could not on that fact alone rationally
be
deemed to be materially deviant.
81.
In the premise, this Court decided that the impugned decision was
arrived at
arbitrarily or capriciously or
mala fide
as a
result of unwarranted adherence to a fixed principle or in order to
further an ulterior or improper purpose. The Court also
decided that
the first respondent has misconceived the nature of the discretion
conferred upon it and took into account irrelevant
considerations or
ignored relevant ones. Further, this Court found that the impugned
decision did not only contravene Section 38(1)(a)(ii)
of the PFMA,
but it is also not authorised by the provisions thereof. The impugned
decision was also not rationally connected to
or the purpose for
which it was taken.
CONCLUSION
:
82.
As far as the appropriate remedy is concerned. The applicant drew
inspiration
from Section 172(1)(b) of the Constitution and Section
8(1)(c)(ii) (aa) of PAJA, respectively. The former empowers this
Court,
when deciding a constitutional matter within its power, to
make an order that is just and equitable. With regard to the former,
the applicant contended that in as far as the second respondent ought
to have been disqualified, the applicant sought substitution
relief
on the basis that it would be a foregone conclusion that the tender
ought to have been awarded to the applicant. That in
such an
instance, it will make little sense to require the first respondent
to again evaluate the tenders. It also contended that
in so far as
this Court finds that there were irregularities in the process and
that the applicant is not entitled to substitution
relief, the
appropriate remedy would be to refer the tender back, to be evaluated
by the first respondent.
83.
In terms of Section 8(1) of PAJA, this Court or Tribunal, in
proceedings for
judicial review in terms of Section 6(1), may grant
any order that is just and equitable, including (a) directing the
administrator
(i) to give reasons; or (ii) to act in the manner the
Court or Tribunal requires; (b) prohibiting the administrator from
acting
in a particular manner; (c) setting aside the administrative
action and (i) remitting the matter for reconsideration by the
administrator,
with or without directions; or (ii) in exceptional
cases (aa) substituting or varying the administrative action or
correcting a
defect resulting from the administrative action; or (bb)
directing the administrator or any other party to the proceedings to
pay
compensation; (d) declaring the rights of the parties in respect
of any matter to which the administrative action relates; (e)
granting a temporary interdict or other temporary relief or (f) as to
costs.
84.
It is against this backdrop that this Court granted the said Order.
APS
NXUMALO J
NORTHERN
CAPE DIVISION
KIMBERLEY
I
concur.
ERASMUS,
AJ
NORTHERN
CAPE DIVISION
KIMBERLEY
[1]
Masicebise
Business Solutions v The MEC: Cooperative Governance Human
Settlement & Traditional Affairs NC Province and Another
(992/2022)
[2022] ZANCHC 31
(31 May 2022)
[2]
At para 10
[3]
Private Security Industry
Regulatory Authority
[4]
Rule 6 12) (a)
[5]
See also
Luna
Meubel Vervaardigers v Makin
1977 (4) SA 135 (W)
[6]
Apleni v President of the
Republic of South Africa
[2018[
1 All SA 728 (GP) para [10] [also reported at [2018] JOL 39179 (GP)
– Ed]
[7]
Stock
v Minister of Housing
2007 (2) SA 9
(C) 12I-13A.
[8]
Section 34 of the Constitution
expressly grants everyone the right to have any dispute that
can be
resolved by the application of law decided in a fair public hearing
before a Court or where appropriate, another independent
and
impartial tribunal of forum. Section 36, for its own part stipulates
how and to what extent certain rights in the Bill of
Rights may be
limited. Section 39(1), on the other hand enjoins our Courts,
Tribunal and forum, when interpreting the Bill of
Rights to
inter
alia
promote the values that underlie an open and democratic society
based on human dignity, equality and freedom.
[9]
Private Security Industry
Regulation Act 56 of 2001.
[10]
GP3, p30, Vol 1
[11]
Section 6 (2)(a)(ii)
[12]
Section 6 (2)(d)
[13]
Section 6 (2)(c)
[14]
In terms of Section 9 (1) of the
Constitution, everyone is equal before the law and has the right
to
equal protection and benefit of the law
[15]
Private Security Industry Regulatory
Authority
[16]
Bid Evaluation Committee
[17]
Plascon-Evans
Paints v Van Riebeeck Paints
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634
[18]
Section 217 (1) of the Constitution,
provides as follows:
“
When
an organ of state in the national, provincial or local sphere of
government, or any other institution identified in national
legislation, contracts for goods or services, it must do so in
accordance with a system which is fair, equitable, transparent,
competitive and cost-effective.”
Section
217 (2), for its own part expressly stipulates that section 217 (1)
does not prevent the said organs of state or institutions
from
implementing a procurement policy for (a) categories of preference
in the allocation of contracts; and (b) the protection
or
advancement of persons or categories of persons, disadvantaged by
unfair discrimination.
[19]
Cf
the relevant parts of the said Regulation 8, stipulates as follows:
“
(1)
An organ of state must, in the tender documents, indicate if, in
respect of a particular tender invitation, tenders
will be evaluated
on functionality and price.
(2)
….
(3)
the total combined points allowed for functionality and price may,
in respect of tenders with
an estimated Rand value above R500 000,
not exceed 90 points.
(4)
….
(5)
…
(6)
….
(7)
Preference for being an HDI and/or subcontracting with an HDI and/or
achieving specified goals must
be calculated separately and must be
added to the points scored for functionality and price.
”
(Emphasis supplied)
[20]
Tender
Invitation; particularly 1.2.27
[21]
Section 2 of the Constitution of the
Republic of South Africa, 1996
[22]
Section 8 (1),
ibid
[23]
Section 9 (1),
ibid
[24]
Section 217 (1),
ibid
[25]
Jicama
v West Coast District Municipality
2016 (1) SA 116 (C).
[26]
1998 (12) BCLR 1458
(CC).
52
See Dicey
Introduction
to the Study of the Law of the Constitution
10
th
Ed (Macmillan Press, London 1959) at 193, in which Dicey refers to
this aspect of the rule of law in the following terms:
“
We
mean in the second place, when we speak of the ‘rule of law’
as a characteristic of our country, not only that
with us no man is
above the law, but (what is a different thing) that here every man,
whatever be his rank or condition, is subject
to the ordinary law of
the realm and amenable to the jurisdiction of the ordinary
tribunals.
.
. . .
With
us every official, from the Prime Minister down to a constable or a
collector of taxes, is under the same responsibility
for every act
done without legal justification as any other citizen.
”
[Footnotes omitted. ]
[27]
Emphasis supplied
[28]
Section 3(3), PFMA
[29]
Section 38 (1) (c), PFMA
[30]
Section 38 (1) (d),
ibid
[31]
Section 38 (1) (e) and (f),
ibid
[32]
Section 38 (1) (n),
ibid
[33]
Emphasis are supplied
[34]
Pharmaceutical
Manufacturers Association of South Africa and Another:
In
Re Ex Parte
President of the Republic of South Africa and Others
2000
(2) SA 674
[35]
Ibid
,
para 85 and 90
[36]
Ibid
[37]
Democratic
Alliance v The President of the Republic of South Africa and Others
2013 (1) SA 248 (CC)
[38]
Ibid
,
para 32
[39]
Ibid
[40]
Emphasis supplied
[41]
See RA2, pp390-392, Vol 5
[42]
Phoebe Bolton,
The
Law of Government Procurement in South Africa
,
p42
[43]
Ibid
,
p45
[44]
DG Goyder, 2003 EC,
Competition
Law 4
th
Ed,
Oxford University Press, at 9
[45]
Ibid,
p45
[46]
See Baxter,
Administrative
Law
414-426;
Hoexter,
New Administrative Law
164-168
[47]
Wicker
and Other v Minister of Correctional Services
2001(2) SA 747 (C) 753i-755C
[48]
See also
Johannesburg
Town Council v Norman Antey
&
Co
1928 AD 335
AT 339-342
[49]
See also
South
African Post Office v Chairperson of Western Cape Tender Board
2001 (2) SA 675
(C) para 19
[50]
De Smith,
Principles
of Judicial Review
,
2
nd
Edition,
Sweet
& Maxwell
,
396
[51]
1988 (3) SA 132
(A) at 151
[52]
Emphasis supplied
[53]
Private Security Industry Regulatory
Authority