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[2018] ZAFSHC 50
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Razzmatazz Civil (Pty) Ltd v Independent Development Trust and Others (4691/2017) [2018] ZAFSHC 50 (19 April 2018)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number:
4691/2017
In
the matter between:
RAZZMATAZZ
CIVIL (PTY)
LTD
Applicant
And
THE
INDEPENDENT DEVELOPMENT
TRUST
1
ST
Respondent
THE
MINISTER: GOVERNMENT OF THE REPUBLIC OF
SOUTH
AFRICA: DEPARTEMENT OF PUBLIC WORKS
2
ND
Respondent
REDER
CONSTRUCTION CC
3
RD
Respondent
CORAM:
NAIDOO
ADJP et MATHEBULA, J
HEARD
ON:
12 FEBRUARY 2018
JUDGMENT
BY:
MATHEBULA, J
DELIVERED
ON:
19
APRIL 2018
[1]
The applicant, Razzmatazz Civil (Pty) Ltd, brought an application to
review and set aside a decision of the 1
st
respondent, The
Independent Development Trust, to award a tender to the third
respondent. In addition the applicant is seeking
an order that
the Service Level Agreement concluded between the 1
st
and
3
rd
respondent be struck down as well as certain ancillary
orders.
[2]
The background facts are briefly as follows. In June 2017, the
first respondent invited tenderers to bid for the provision
of major
refurb
ishment of facilities and Civil
Services at 44 Parachute Regiment, Tempe, Bloemfontein. The
closing date was 3 July 2017 at
11h00. The applicant and 3
rd
respondent also submitted their bids.
[3]
The bids were evaluated as indicated in the Minutes of the Bid
Evaluation Committee held on 12 to 13 July 2017. The following
sequence was applied:-
A.
Compliance with mandatory requirements (“Gate Keepers”)
B.
Application of Functionality Criteria, with minimum threshold of 70%
required to qualify for further
evaluation.
C.
Price and Preference (90/10)
[4]
The applicant’s bid made it through the Gate Keepers stage but
did not progress beyond the Functionality stage because
it achieved a
score
less than the minimum of 70%. The score achieved by the
applicant was recorded as follows:-
Relevant experience on
similar construction projects completed in the past 5 years.
The similarity refers to project
of similar and complexity, size
and value in terms of the CIDE categorization.
24
Performance on
previous projects executed in terms of the respective completed
“Client Reference Scorecards” (see
returnable
schedules) for the projects listed on the aforementioned projects.
10
Financial Ability
0
Qualification and
Competence of key staff
18
Contractor approach
and methodology
8
60.00
[5]
It appears that on 28 August 2017 the applicant obtained the
confirmation of the awarding of the tender to the 3
rd
respondent on the website of the 2
nd
respondent. In consequence thereof the applicant’s
attorneys wrote a letter to the 1
st
respondent on 28 September 2017 requesting full and adequate reasons
why the applicant’s bid was unsuccessful. They
also
requested the evaluation report of the Consulting Engineers, minutes
of the Bid Evaluation Committee meeting, Bid Adjudicating
Committee
as well as certain additional information.
[6]
The 1
st
respondent replied in a detailed letter
dated
30 August 2017. The relevant part contained in paragraph 8 of
the said letter read as follows:-
“
Having
achieved a functionality score of 60% as shown in Table A above,
Razzmatazz thus failed to attain the minimum threshold of
70% on
functionality required to progress to third and final stage of
evaluation i.e. price and preference evaluation.”
[7]
The applicant was dissatisfied with the response and wrote another
letter dated 1 September 2017. On this occasion, the
applicant
substantially dealt with inaccuracies in the response of the 1
st
respondent and threatened to bring an urgent application in the event
the 1
st
respondent proceeded with the implementation of its decision.
On 5 September 2017 the 1
st
respondent replied with a letter and paragraph 10 conveyed the
following message:-
“
In
terms of B2, financial ability, Razzmatazz failed to comply with the
requirements of the returnable as per table 1, but however
provided
Financial Statements instead. Clause F2.18 of the standard
conditions of tender does not deal with documents not
submitted as
part of the tender requirements but additional other material and on
discretionary request by employer for purposes
of fair risk
assessment as captured in sentence number 4 of clause F2.18.1.”
[8]
The reasons having been provided and the applicant still
dissatisfied, these proceedings were launched as a matter of
urgency.
The object of the review proceedings in terms of Rule
53 is to grant a quick relief to an aggrieved party. I do not intent
to repeat
its historical background up to the proceedings before us.
[9]
Mr Grobler on behalf of the applicant put up a formidable argument
that the decision to award the bid to the 3
rd
respondent be reviewed and set aside. He argued that the
question of
locus
standi
can only be dealt with once the facts have been examined and
considered. The essence of his submission was that the issues
to be considered are whether the applicant submitted a compliant bid
and that the 1
st
respondent scored the bids in a correct manner. Only in the
event that the applicant was non-compliant then the question
of
locus
standi
can be considered.
[10]
He proceeded to deal with the scoring by the 1
st
respondent and argued that there was no objective criteria used to
complete the exercise. It was his submission that the
absence
of objective determination vitiated the process. He referred to
several incidents where points were not awarded or
improperly awarded
to the applicant. These inaccuracies contributed toward the
applicant not making the necessary threshold.
[11]
In response, Mr Mokoena sharply differed with the submissions of the
counsel for the applicant. He submitted that it
was not the
case of the applicant that the bid of the 3
rd
respondent was not responsive and had to be disqualified. The
applicant was not alleging that the 1
st
respondent awarded the bid to the 3
rd
respondent in a situation where the latter did not qualify.
Further that the applicant was not alleging any bias, fraud,
corruption or arbitrary grounds for awarding the tender to the 3
rd
respondent. He added that the applicant was not relying on any
specific ground and which provision of PAJA
[1]
has not been complied with.
[12]
He emphasised that the response of the 1
st
respondent through letters exchanged gave comprehensive reasons for
the lawful decisions. These demonstrated a clear, objective
and
fair criteria were applied consistently in a lawful manner and
that
the bid of the applicant did not meet the threshold. In his
view the applicant was a disgruntled bidder who would stop
at nothing
to award itself a bid. On the issue that not all documents were
returned, he argued that there were no reasons
that the applicant
ought to have been treated differently. The calculation of
scores was a fair and just administrative action.
In the matter
on hand there were no exceptional circumstances justifying a
different approach by the court
.
He
alluded to the importance of the work to be performed at a military
base and that the application ought to be dismissed with
costs.
[13]
Mr Snellenburg for the 3
rd
respondent submitted that an organ of state must comply with the
prescripts of section 217 of the Constitution. He argued
that
Mr du Preez in his affidavit does not deny having knowledge of the
value of the work to perform. On the issue of scoring
he
submitted that the applicant was scored incorrectly in any event
under the heading relevant experience. The experience
gained in
road maintenance cannot be equated to building as they are not the
same thing. According to him there was no one
who positively
scored that the Bank Rating Certificate was included in the documents
submitted for the bid. He submitted
that the 3
rd
respondent will suffer immense prejudice in the event the tender was
reviewed and set aside. The costs spent in establishing
itself
on site and contracts entered into with sub-contractors, employees
and other service providers was just too enormous.
[14]
The first issue to be considered is whether the applicant had the
legal standing to seek the review of the award and
ancillary
relief. The applicant did not submit a bid that was excluded at
the outset for being non-responsive. It was
found to be
compliant and excluded only because it did not attain the 70%
threshold. There is an obvious dispute regarding
submission of
returnable documents and the methodology of calculating the score.
The applicant as an unsuccessful party has
an interest in the matter
and in its litigation do so on its own facts. It is my
considered opinion that it has the necessary
locus
standi
in this matter.
[15]
The procurement of goods and services by state organs must comply
with the provisions of the Constitution and relevant legislation.
Section 217 of the Constitution prescribes that the public sector
procurement system must be fair, equitable, transparent, competitive
and cost effective. This section lays down the imperatives of
fairness and transparency. There are a myriad
of
Statutes, Regulations and Policies flowing from these provisions
which must also be complied with. In addition the Tender
Data
contain formulae for calculating the scores for relevant experience,
financial ability, financial offer and price.
[16]
In this matter it would appear that the applicant did not enclose the
confirmation letter of “bank rating” from
the bank thus
failing the financial ability test. Instead the applicant
submitted the financial statements. The necessary
points were
not awarded. The argument of the applicant is that the 1
st
respondent should have condoned this and even went an extra mile to
request the applicant to file this document.
[17]
I find the argument misplaced. There is no evidence that any
bidder was treated differently to the applicant in that
documents
were requested or corrected at the request of the 1
st
respondent. It fell squarely within the discretion of the
applicant to do that or not. Failure to do so cannot be a
ground upon which the decision of the 1
st
respondent in evaluating the bid can be marred with irregularity to
the point of vitiating it.
[18]
The decision to award or not award a bid is that of a relevant organ
of state which must be in accordance with the principles
of law.
This being an administrative action means that the provisions of
Promotion of Administrative Justice Act 3 of 2000
are applicable.
In
Metro
CC v Klerksdorp Municipality
[2]
Conradie JA had the following to say about fairness in the context of
public procurement.
“
Fairness
must be decided on the circumstances of each case. It may in given
circumstances be fair to ask a tenderer to explain an
ambiguity in
its tender; it may be fair to allow a tenderer to correct an obvious
mistake; it may, particularly in a complex tender,
be fair to ask for
clarification or details required for its proper evaluation. Whatever
is done may not cause the process to lose
the attribute of fairness
or, in the local government sphere, the attributes of transparency,
competitiveness and cost-effectiveness.”
[19]
In this matter I am satisfied that the applicant was dealt with in a
fair manner. The tender evaluation methods were
clearly
defined, certain and known in advance in tender documents. This
document was important for the 1
st
respondent to evaluate the financial muscle of the bidders given the
large amount of money involved and its importance to the client.
It was clearly stated in the tender document which returnable
documents must accompany the bid. The applicant did not comply
with all of them.
[20]
It is trite that the method of tender evaluation is a fundamental
part of the tender process. The relevant principles
were summed
up in
Allpay
v Chief Executive, Sassa.
[3]
The proper approach as laid down is to establish factually whether an
irregularity has occurred then be legally evaluated
whether it
amounts to a ground for review under PAJA. In this matter all
bids were considered and after using a criterion
which was objective
and known beforehand to the bidders was the decision made. The
applicant was provided with reasons which
culminated in a decision to
award the tender to the applicant. These reasons are rational
as they are based on the prescripts
of the tender document.
[21]
The applicant is also seeking the order that this court substitute
the decision of the 1
st
respondent by allocating the tender to it. I do not find merit
in this argument. As stated earlier the 1
st
respondent is ordained the discretion to award or not award a bid.
The Constitutional Court repeatedly held that court
s
should be wary of abrogating to itself the powers that are endowed
upon other agencies. Although it is difficult to formulate
in
clear terms what such deference must embrace, each matter will depend
on its facts and circumstances.
[4]
In this matter there are no exceptional circumstances warranting this
court to interfere with the decision of the respondent.
The
applicant had not made a case for awarding the bid to it. It is
not for the court to engage in the exercise of calculating
the
score(s) which is primarily the function of the 1
st
respondent. In the event such a task is to be undertaken, it
would require that the bid of each and every bidder be examined
and
evaluated. This will not only be a mammoth task but also an
encroachment on the competencies of other organs of state.
I do
not find any irregularity on that aspect.
[22]
I have alluded to the aspect that the scope of work had to be
performed at a military base. Although the country is not
at
war, the safety and security of citizens is important. It
cannot be put at risk. It is absolutely important that
the
decision of the 1
st
respondent is carried out and the 3
rd
respondent proceed to conclude the work.
[23]
Given the conclusion I have reached in this matter, there is no
reason to depart from the ordinary rule regarding the costs.
[24]
Accordingly, I make the following order:-
24.1
. The application is
dismissed.
24.2.
The applicant is ordered to pay the costs of the 1
st
respondent inclusive of two counsel as well as costs of the 3
rd
respondent.
_______________
MATHEBULA,
J
I
concur
_________
NAIDOO,
J
On
behalf of Applicant:
Adv. S Grobler
Instructed
by:
Peyper Attorneys
Bloemfontein
On
behalf of
1
st
Respondent
:
Adv P Mokoena SC assisted by
Adv. M Skhosa
Instructed
by:
Maphosa Mokoena Inc.
c/o Matsepes
Bloemfontein
On
behalf of
3
rd
Respondent
:
Adv. N Snellenburg SC
Instructed
by:
Honey Attorneys
Bloemfontein
/roosthuizen
[1]
Promotion of Administration Justice Act 3 of 2000
[2]
2004 (1) SA 16
(SCA) para 13.
[3]
2014 (1) SA 404
(CC) paras 22-30
[4]
National Coalition of Gay and Lesbian Equality v Minister of Home
Affairs
2000 (2) SA 1
(CC); Bato Star Fishing (Pty) Ltd v Minister
of Environmental Affairs and Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC).