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[2015] ZAGPPHC 254
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Viva Engineering Project CC and Another v Minister of Water Affairs and Others (64340/13) [2015] ZAGPPHC 254 (17 March 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER: 64340/13
DATE:
17/3/2015
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
VIVA
ENGINEERING PROJECT
CC
..........................................................................
First
Applicant
VIVA
ENGINEERING PROJECT CC
AND
CORRO-WEAR JOINT
VENTURE
................................................................
Second
Applicant
and
MINISTER
OF WATER
AFFAIRS
............................................................................
First
Respondent
MRS
Z MATHE
NO
….............................................................................................
Second
Respondent
METHABICA
CONSULTING
..................................................................................
Third
Respondent
STELENBOSCH
NACO
..........................................................................................
Fourth
Respondent
BELTA
SERVICES
......................................................................................................
Fifth
Respondent
PRO-ELECTRO
SERVICES
.........................................................................................
Six
Respondent
JUDGMENT
A
B ROSSOUW A J
(1)
This is an application in terms of the Promotion of Administrative
Justice Act 3 of 2000 (PAJA) for the judicial review of
the
disqualification of certain bids from a state tender.
(2)
The applicants (Viva Engineering Projects CC ('Viva') and Viva and
Corro-Wear SA CC ('Corro-Wear') Joint Venture ('the Joint
Venture')
brought an application against the first respondent (the Department
of Water Affairs, represented by the Minister of
Water Affairs
('DWA')) and the second respondent (DWA'S Departmental Bid Evaluation
Committee ('the Committee')) for the review
and setting aside of the
Committee's decision to award state tenders to the third respondent
(Methabica Consulting ('Methabica')),
fourth respondent (Stellenbosch
Naco ('Stellenbosch')), fifth respondent (Belta Services ('Belta'))
and sixth respondent (Pro-
Electro Services ('Pro-Electro')).
(3)
On 23 December 2013 Viva and the Joint Venture sought as a matter of
urgency to interdict the implementation of the tenders
pending the
finalisation of a review application. This application was struck off
the roll because of lack of urgency.
(4)
Subsequently, and after the record had been delivered in terms of
rule 53(4) of the Uniform Rules, Viva and the Joint Venture
supplemented their founding affidavit and amended their Notice of
Motion and now seek the following relief:
1. 'that the
decision of [DWA] and [the Committee] to disqualify both [Viva] and
[the Joint Venture] from the tender W0647 WTE:
Mechanical and
Electrical Asset Management Support of Major Plant and Machinery for
Northern, Central, Eastern, Western Operations,
Limpopo, Mpumalanga,
North West, Gauteng, Free State, Northern Cape, KwaZulu Natal,
Eastern Cape and Western Cape be reviewed and
set aside;
2. that [Viva] and
[the Joint Venture] be re-instated to the tender process to be
reconsidered as set out in [4] below;
3. that the decision
of [DWA] and [the Committee] to award the tender to [Methabica,
Stellenbosch, Belta and Pro-Electro] be reviewed
and set aside;
4. that the tender
be and is remitted back to the relevant committees for
reconsideration, with specific regard to such determination
as this
Court may make on the issues dealt with in the Judgement of this
Court;
5.
that [DWA] and [the Committee], together with all those who persist
in opposing the relief sought, pay [Viva] and [the Joint
venture]
costs in this Main Application jointly and severally, the one paying
the other to be absolved;
6.
further and/or alternative relief.'
(7)
Stellenbosch and Pro-Electro do not oppose the relief sought.
(8)
The two main issues between the parties are the following: Whether
the Joint Venture as apposed to Corro-Wear submitted a bid,
in other
words, the Joint Venture's
locus standi
to bring this
application and whether the Committee's decision to disqualify Viva
and the Joint Venture in the first round of the
bid evaluation
process is reviewable in terms of PAJA.
(9)
Mindful of the
Plascon-Evans
rule, the following facts are
common cause:
(10)
On 1 March 2013 DWAF through its supply chain management unit
advertised invitations to tender for Mechanical and Electrical
Asset
Management Support of Major Plant and Machinery for Northern,
Central, Eastern, Western Operations, Limpopo, Mpumalanga,
North
West, Gauteng, Free State, Northern Cape, KwaZulu Natal, Eastern Cape
and Western Cape under Tender No W0647WTE with the
closing date being
4 April 2013.
(11)
In terms of the advertisement tenders could only be submitted on the
official tender documentation and potential bidders were
invited to a
compulsory clarification meeting with representatives of DWA that
would take place on 18 March 2013.
(12)
The official tender documentation consisted of 6 parts, ie
Instructions to Bidders, Bid Forms, Conditions and Special Conditions
of Contract, Conditions of Contract, Technical Specification and
Requirements and Bid Requirements.
(13)
In terms of the bid documents the bids would be evaluated following a
three phased approach, ie Phase 1: Administration Compliance,
Phase
2: Technical Compliance and Phase 3: Evaluation of Price and
Preference Points Claimed.
(14)
Regarding the first phase of the evaluation process the bid documents
under the heading 'Evaluation Criteria' stipulate as
follows:
It's
compulsory that all bidders comply with the administration
requirements of this bid. Omission to complete and/or submit the
listed documents will render your bid non responsive and the bid will
not be considered for the phase 2 evaluation. The compulsory
documents that must be completed and/or attached to the bid include:
1. CIDB rating certificate (original) 2. An original and valid
tax
clearance certificate 3. Company registration certificate (original
or certified copy) 4. Company workmanship compliance certificate
(original or certified copy) 5. Completed and signed standard bidding
documents (SBD1 [Invitation to Bid], SBD2 [Tax clearance
certificate
requirements], SBD4 (Declaration of Interest], SBD 6.1 [Claim form
for preference points for B-BBEE], SBD8 [Declaration
on bidder's past
supply chain management practices], SBD 9 [Certificate of Independent
Bid Determination], Annexure 7 [Instructions
to Bidders], SAP Vendor
Form).
(15)
The compulsory clarification meeting was held on 18 March 2013.
(16)
Mr Spiller, the sole member of both Viva and Corro-Wear, attended the
site meeting on 18 March 2013 in his capacity as representative
of
Viva.
(17)
At this meeting a representative of DWAF informed those present that
failure to comply with any element regarding administrative
compliance except for the B-BBEE certificate would invalidate a
bid.
(18)
In the minutes of this meeting the following is recorded:
'Mr
Spiller from Viva asked if he can Bid for a JV in another area whiles
going alone on another area. Mr VW Kohlmeyer [DWAF's representative]
responded by saying that can only be entertained in separate Bids,
not on one Bid'.
(19)
Sixteen bids were received on time, including the bids of Viva , the
Joint Venture, Methabica, Stellenbosch, Belta and Pro-Electro.
(20)
On 18 July 2013 the second respondent (the Departmental Bid
Evaluation Committee ('the Committee')) sat for 4 hours and 40
minutes to evaluate the bids only in terms of administrative
compliance, ie phase one of the evaluation process.
(21)
Bidders 1, 2, 5, 9, 10, 11 and 14 (not parties to these proceedings)
were, inter alia, disqualified for not submitting/submitting
expired
Company workmanship compliance certificates. Bidder 3 (Viva) was
disqualified for submitting a copy and an expired tax
clearance
certificates for its subcontractors and collusive bidding based on
the provisions contained in SBD9, Bidder 4 (not a
party to these
proceedings) was disqualified for submitting a company registration
certificate that was not certified, Bidder 6
(Stellenbosch) was
disqualified for not submitting original tax clearance certificates
for its subcontractors, Bidder 8 (not a
party to these proceedings)
was disqualified for submitting a CIDB 5CE while the requirement was
4ME, Bidder 13 (not a party to
these proceedings) submitted a CIDB
6CE while the requirement was 4ME, Bidder 16 (the Joint Venture) was
disqualified for collusive
bidding based on the provisions contained
in SBD9.
(22)
The Committee, at the same meeting, decided to relax the requirements
pertaining to company registration certificates and tax
clearance
certificates in respect of subcontractors. - The bidders concerned
were given the opportunity to remedy these defects
prior to possible
appointment. Consequently the status of bidders 4 and 6
(Stellenbosch) were changed from non responsive to responsive.
In the
result bidders 4, 6 (Stellenbosch), 7 (Methabica), 12 (Pro-Electro)
and 15 (Belta) were shortlisted for the next phase.
(23)
The decision to disqualify Viva and the Joint Venture was taken after
the committee had mandated one of its committee members,
Mr Mdletshe,
to advise the committee as to how the bids of Viva and the Joint
Venture should be evaluated. Mr Mdletshe's opinion
was, in short,
that by submitting two bids for the same tender the impression was
created by the bidders that they were separate
and in competition
with each other and that it was a contravention of the Competition
Second Amendment Act 39 of 2000.
(24)
On 30 September 2013 Viva and the Joint Venture were notified that
their bids had been disqualified and were further advised
of the
reasons for disqualification, being Viva's non-compliance with the
bid conditions regarding subcontractors' tax clearance
certificates
and possible bid rigging and collusive tendering based on s 4(1) of
the Competition Act and the conditions contained
in SBD9.
(25)
The successful bids were approved by the Departmental Bid
Adjudication Committee and the tenders have been implemented.
THE
ISSUE OF LOCUS STANDI
(26)
Viva and Corro-Wear contend that they also submitted a bid as a joint
venture. The respondents deny this and contend that the
bid was
submitted by Corro-Wear and not by a joint venture.
(27)
The Instructions to Bidders contain the following conditions:
If
the Bid is submitted by a joint venture or more than one person
and/or companies and/or firms it shall be accompanied by the
following:
The
original or a certified copy of the original document under which
such joint venture was constituted which must define precisely
inter
alia the conditions under which the joint-venture function, its
period of duration and the participation of the several constituent
persons and/or companies and/or firms.
A
certificate signed by or on behalf of each participating person
and/or company and or/firm authorising the person who signed the
Bid
to do so' (Par 7.2).
(28)
Paragraph 4 of SBD2 contains the following condition:
'In
bids where Consortia/Joint Ventures/Sub-contractors are involved,
each party must submit a separate Tax Clearance Certificate'.
(29)
In terms of the common law a joint venture in respect of a single
transaction is a partnership if the following three essentials
are
present, namely: 1) that each of the partners brings or binds himself
to bring something into the partnership; 2) that the
business should
be carried on for the joint benefit of both parties and 3) that the
object should be to make and share profits.
(
Bester v Van Niekerk
1960 (2) SA 779
(AD) 783G-785A).
(30)
In terms of the bid documents, as I read it, a joint venture in
respect of a single transaction is an association of persons
in terms
of which each person brings or binds himself to bring his expertise
and/or property and/or capital and/or efforts and/or
skill and/or
knowledge into the joint venture. In my view, this definition does
not only include joint ventures that qualify as
partnerships in terms
of the common law (See
Bester v Van Niekerk
supra
). but
also associations closely related to partnerships (See eg
R v
Bowen NO and others
1967 (3) SA 236
(R)).
(31)
The bid conditions are clear: A joint venture can only submit one bid
and each party to the joint venture must sign a certificate
authorising the person who signs the bid to do so and each party's
tax clearance certificate should be included in the bid documents.
(32)
I now turn to the bid documents submitted by the Joint Venture:
(33)
On the first page of the bid document the words 'Joint Venture'
appear beneath the name 'Corro-Wear SA'. No mention is made
of Viva
on this page.
(34)
The letter of presentation written on Corro-Wear's letterhead and
addressed to DWA dated 2 April 2013 and forming part of the
bid
documents (this letter is indexed as item 1 - 'Covering Letter')
makes no mention of a joint-venture with Viva. Save for
the
names of the bidders, the wording of this letter is almost identical
to the wording of a similar letter included in Viva's
bid documents.
(35)
In SBD1 (Invitation to Bid) the name of the bidder is indicated as
'Corro-Wear SA' and signed by Corro-Wear's chief executive
officer.
Save for two stamps bearing Viva's name, no mention is made of a
joint venture with Viva.
(36)
The following documents also reflect the bidder as only Corro-Wear:
The Declaration of Interest (SBD4), The Certificate of
Independent
Bid Determination (SBD9) and the Pricing Schedule (SBD 3.1). The
aforesaid stamps also appear on The Pricing Schedule
and the
Declaration of Interest.
(37)
The Memorandum of Agreement entered into between Viva and Corro-Wear
dated 2 April 2013 and which was submitted as part of
the bid
documents contain the following relevant clauses:
(38)
The last three unnumbered paragraphs of Clause 6 read as follows:
'
The
parties therefore agree that they will tender on Corro-Wear the said
contract together with Corro-Wear being the main contractor
.
In
the event of Corro-Wear being awarded the contract by it will
subcontract all the (electrical and mechanical) work to Viva
, and
will carry out the mechanical, electrical related specialist work
themselves. (Own emphasis.)
The
parties agree that
the terms of the subcontract portion of the
work
will be on the same basis as that of the main contract ie by
means of a 'back-to-back' agreement .(Own emphasis.)
The
parties further agree that they will be independently responsible for
their own profits'.
Clause
7 contains the following term:
'
Viva
will pay Corro-Wear 24 hours after receive payment from D.W.A.
'
(Own emphasis.)
(39)
It is quite clear from the bid documents submitted by the Joint
Venture, and more in particular SBD1 (Invitation to bid) that
Corro-Wear was the tenderer. The name of Viva does not appear in any
of the bid documents, save for the Memorandum of Agreement
and a few
stamps here and there, nor is any of the bid documents signed on
behalf of Viva nor is Viva in any of the bid documents
indicated as a
joint bidder, nor is there a certificate signed by Viva authorising
Corro-Wear to sign the bid.
(40)
Furthermore, clauses 6 and 7 of the Memorandum of Agreement make it
clear that the relationship between Corro-Wear and Viva
is that of
main contractor and subcontractor. Based on these clauses alone, it
is clear that the contractual relationship between
Viva and
Corro-Wear has never been that of a joint venture as envisaged in the
definition contained in the bid documents or otherwise.
(41)
To the extent that the Joint Venture also relies on the documents
submitted by Viva in support of its submission that the Joint
Venture
as opposed to Corro-Wear submitted a bid, it is clearly in
contravention of the aforesaid conditions of the standard bid
documents.
(42)
The fact that the Committee perceived the bid as that of a joint
venture does not alter the position.
(43)
I therefore find that Corro-Wear, and not the Joint Venture, was the
real bidder and, consequently, that Viva and Corro-Wear
in
their capacity as partners or associates in a joint venture have no
locus standi
in this application,
(44)
In view of this finding, I shall henceforth confine myself to the
disqualification of Viva only.
THE
COMMITTEE’S DECISION AND ITS VALIDITY
(45)
Viva, relying on PAJA ,contends that it is entitled to final relief
on the grounds that the decision to disqualify and exclude
Viva from
the tender in the first round:-
1. was not
rationally connected to the documentation placed before the decision
making committee (s 6(2)(f)(ii)(cc));
2. was materially
influenced by and based upon an error of law, namely an incorrect
interpretation of the
Competition Act, 1998
and the Construction
Industry Development Board Act, 2000 (s 6(2)(d));
3. was procedurally
unfair (s 6(2)(c));
4. was attributable
to irrelevant considerations which were taken into account and
relevant considerations not considered (s 6(2)(e)(iii));
5. was taken in bad
faith (s 6(2)(e)(v));
6. was taken
arbitrarily or capriciously (s 6(2)(e)(vi)); and
7.
was so unreasonable that no reasonable person could have arrived at
the decision (s 6(2)(j)(ii)(cc)).
(46)
The award of a tender for the supply of goods or services to a public
entity is an administrative action, ie administrative
conduct that
involves a decision, which is subject to judicial review in terms of
PAJA. (See
Transnet Ltd v Goodman Bros (Pty) Ltd
[2000] ZASCA 151
;
2001 (1) SA
853
(SCA) and
Gamevest (Pty) Ltd v Regional Land Claims
Commissioner, Northern Province and Mpumalanga and others
2003
(1) SA 373
(SCA) at 382B-D).
(47)
The constitutional and legislative framework within which
administrative action may be taken in the state procurement process
is Section 217 (1) of the Constitution, the
Preferential Procurement
Policy Framework Act 5 of 2000
and the
Public Finance Management Act
1 of 1999
with PAJA supplying the lens for judicial review (
Allpay
Consolidated Investment Holdings (Pty) Ltd and others v Chief
Executive Officer, South African Social Security Agency and
others
2014 (1) SA 604
(CC) par 45).
(48)
In
Allpay
, in dealing with the the proper legal approach that
should be followed in cases where the award of state tenders is
sought to be
reviewed, the following is,
inter alia
, stated:
The constitutional and legislative framework entails supply chain
management prescripts that are legally binding and insistence
on
process formalities ensures fairness to all participants in the bid
process (paras 22 and 27). Procedural requirements ensure
even
treatment of all bidders and must be considered on their own merits
and not through the lens of the final outcome (par 24).
The
materiality of compliance with legal requirements depends on the
extent to which the purpose of the requirement is attained.
One must
first establish, factually, whether an irregularity occurred. If so,
then the irregularity must be legally evaluated to
determine whether
it amounts to a ground for review under PAJA. This legal evaluation
must, where appropriate, take into account
the materiality of any
deviance from the 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 (paras 22 and 28 to
30).
(49)
I shall first deal with Viva's contention that the Committee
committed an irregularity by disqualifying Viva on the basis of
the
said tax certificates.
(50)
I am of the view that the Committee did not disqualify any of the
tenders on this basis. This much is clear from what transpired
on 18
July 2013.: A resolution was passed, or, to put it differently, a
deliberate decision was taken that all bidders who did
not submit
original tax clearance certificates for their identified
subcontractors would be requested to do so prior to possible
appointment. Thus, it is clear that, had Viva and the Joint Venture
not been disqualified on another ground, they would have been
afforded the same opportunity. I express no opinion as to whether the
Committee was entitled to condone the requirement, but, having
done
so, all the bidders received equal treatment.
(51)
The Committee's reliance on the defective tax certificates in its
letter dated 30 September 2013 is factually incorrect and
clearly a
misconception of what was decided on 18 July 2013.
(52)
In the light of this finding, I find it unnecessary to deal with the
other issues raised by the parties about the tax certificates
in
respect of sub-contractors.
(53)
I now turn to the issue as to whether the Committee's decision
to disqualify Viva on the basis of SBD9 is reviewable
in terms of
PAJA.
(54)
In the Committee' minutes of the meeting that was held on 18 July
2013 the following is recorded:
Bidder
[Viva] submitted two Bids as Bidder Number 3 [Viva] & 16 [Viva
and Corro-Wear Joint Venture]
Disqualified
based on the provisions of SBD9 (Collusion Bidding)'
(55)
In the Committee's recommendation to the Departmental Bid
Adjudication Committee that the bid be awarded to the successful
bidders, the following is recorded about the disqualification of Viva
and the Joint Venture:
'BIDDER
3 VIVA ENGINEERING . . . Final decision by all panel members:
Disqualified based on Standard Bidding Document (SBD9), possible
Bid
Rigging or Collusive Bidding.' and
'BIDDER
16 CORRO-WEAR JV VIVA ENGINEERING . . . Disqualified based on
Standard Bidding Document (SBD9), possible Bid Rigging
or Collusive
Bidding.'
(56)
The reasons given for the disqualification are, as stated above,
contained in a letter addressed to Viva dated 30 September
2013,
paragraph 6.2 of which reads as follows:
Secondly,
[Viva] tendered for bid W0647WTE as bidder 3. [Viva] also tendered
for the same bid in a joint venture with Corro-Wear
as bidder 16.
Bidder(s) concerned have not substantiated in their bids, or any
other form, the reasons for this action or any commercial
benefit to
DWA that outweighs the requirements of the
Competition Act of 1998
.
The
Competition Act of 1998
is quiet clear about this practice and the
Treasury Regulations outline the actions or remedies that need to be
taken when such
is detected by the public institutions.
In terms
of the SBD 9: Certificate of Independent Bid Determination, which was
attached in the tender document and was signed by
the bidder (Viva
Engineering), this practice is not permitted as it leads to possible
bid rigging or collusive tendering
. (Own emphasis.)
By
submitting two bids for the same tender, an impression has been
created by bidders that they are separate and in competition
with
each other. It is clear that, in this case, this was not so and this
makes ground for bid collusion fertile.
Section 4(1)
of the
Competition Second Amendment Act, No 39 of 2000
states that this
practice '
has an effect of substantially preventing or lessening
competition in a market place and such practices are prohibited
'
Paragraph
7 reads as follows:
In
lieu of the above points that were assessed by the [Committee]
[Viva's] both bids 3 and 16 were disqualified
in Phase 1. As a
result, the said bids were not further evaluated. It must be
emphasised that DWA has decided to reserve its other
rights that are
available to it pertaining to this matter.' (Own emphasis.)
(57)
Viva's argument, in short, is that the Committee made a material
error of law by interpreting Viva's bid as a bid in contravention
of
the
Competition Act 89 of 1998
, that the error was material and that
this misinterpretation constituted a material irregularity.
(58)
Section 4(1)(b)(ii)
read together with
Section 4(5)
of the
Competition Act allows
an agreement, arrangement or understanding or
concerted practice between two constituent firms that involves
collusive tendering.
Viva and Corro-Wear were in terms of the
Competition Act constituent
firms when the bids were submitted
because Mr Spiller was the sole member of each close corporation and
they were thus
in terms of the
Competition Act
allowed
to
enter into an agreement that involved collusive tendering. That was
not placed in dispute by any of the parties.
(59)
It is obvious that the Committee made an error of law regarding the
interpretation of the
Competition Act, but
did the error constitute
an irregularity and, if so, was the irregularity material?
(60)
From the minutes of the Committee and its recommendations to the
Departmental Bid Adjudication Committee, it is evident that
the
Committee primarily relied on the conditions contained in SBD9 and
not so much on the
Competition Act.
(61
)
The question as to whether the Committee's misrepresentation
constituted an irregularity and, if so, whether it was material,
can
only be assessed after due consideration of the conditions contained
in SBD9 (Certificate of Independent Bid Determination).
(62)
SBD9 consists of two parts, ie an introductory part and the
certificate itself. SBD9 contains the following relevant conditions:
Paragraph
2 of the first part reads as follows:
'I
understand that the accompanying bid will be disqualified if the
Certificate is found not to be true and complete in every respect'.
Paragraph
4 of the first part reads as follows:
'This
SBD serves as a certificate of declaration that would be used by
institutions to ensure that, when bids are considered, reasonable
steps are taken to prevent any form of bid-rigging'.
Paragraph
5 of the second part reads as follows:
'For
the purposes of this Certificate and the accompanying bid, I
understand that the word 'competitor' shall include any individual
or
organisation, other than the bidder, whether or not affiliated with
the bidder, who: a) has been requested to submit a bid in
response to
this bid invitation; b) could potentially submit a bid in response to
this bid invitation, based on their qualifications,
abilities or
experience; and c) provides the same goods and services as the bidder
and/or is in the same line of business as the
bidder.'
Paragraph
6 of the second part reads as follows:
'The
bidder has arrived at the accompanying bid independently from, and
without consultation, communication, agreement or arrangement
with
any competitor. However, communication between partners in a
joint-venture will not be construed as collusive bidding.'
Paragraph
7 of the second part reads as follows:
'In
addition, there have been no consultations, communications,
agreements or arrangements with any competitor regarding the quality,
quantity, specifications and conditions or delivery particulars of
the products or services to which this bid invitation relates'.
Paragraph
9 of the second part reads as follows:
'The
terms of the accompanying bid have not been, and will not be,
disclosed by the bidder, directly or indirectly, to any competitor,
prior to the date and time of the official bid opening or of the
awarding of the contract'.
(63)
In terms of the conditions contained in SBD9 constituent firms are
regarded as competitors, which means that consultations,
communications, agreements or arrangements between constituent firms,
such as Viva and Corro-Wear, are also prohibited and substantiates
a
ground for disqualification.
(64)
The clear purpose of SBD9, in my view, is to prevent any collusive
tendering between bidders, irrespective of the nature of
the
relationship between them and irrespective of whether they are in
terms of the
Competition Act entitled
to participate in such
practices.
(65)
In terms of s1(i) of the Procurement Act an 'acceptable tender' means
'any tender which, in all respects, complies with the
specifications
and conditions of tender as set out in the tender document;'
(66)
Regarding the interpretation of the words 'acceptable tender', the
following was said in
Chairperson, Standing Tender Committee and
others v JFE Sapela Electronics (Pty) Ltd and others
2008 (2) SA
638
(SCA) par 14:
The
definition of "acceptable tender" in the [Procurement] Act
must be construed against the background of the system
envisaged by
section 217(1) of the Constitution, namely one which is 'fair,
equitable, transparent, competitive and effective'.
In other words,
whether 'the tender in all respects comply with the specifications
and conditions of tender as set out in the contract
documents' must
be judged against these values'.
(67)
The definition of tender cannot be given its wide literal meaning. It
does not mean that a tender must comply with conditions
which are
immaterial, unreasonable or unconstitutional. (
See obiter
remark
in
Millennium Waste Management (Pty) Ltd v Chairperson, Tender
Board: Limpopo Province and others
2008 (2) SA 481
(SCA) par 19
which was applied in
Dr JS Moroka Municipality v The Chairperson
of the Tender Evaluation Committee of the Dr JS Moroka Municipality
(937/2012)
[2013] ZASCA 186
(29 November 2013) par 10).
(68)
Furthermore, as a general principal an administrative authority has
no inherent power to condone failure to comply with a peremptory
requirement. It only has such power if it has been afforded the
discretion to do so. (See
Minister of Environmental Affairs and
Tourism and others v Pepper Bay Fishing (Pty) Ltd; Minister of
Environmental Affairs and others
v Smith
2004 (1) 308 (SCA) par
31).
(69)
Viva does not dispute the materiality, reasonableness and
constitutionality of the conditions contained in SBD9.
(70)
These conditions are peremptory and there is nothing in the papers
that indicate that the Committee had the power to condone
non-compliance with a peremptory requirement.
(71)
It is common cause, and also very obvious, that Viva and Corro-Wear
collaborated in submitting their respective bids and in
doing so they
contravened the conditions contained in SBD9.
(72)
Thus, I can find no irregularity on the part of the Committee in
disqualifying Viva in the first round.
(73)
Even if it can be found that the Committee's misinterpretation was an
irregularity, then one must establish its materiality.
In terms of s
6(2)(d) of PAJA administrative action may be reviewed if it ' . . .
was materially influenced by an error of law.
One view is that an
error of law is not material or relevant if the decision is
justifiable on the facts despite the error. (See
Derby-Lewis and
another v Chairman, Amnesty of the Truth and Reconciliation
Commission and others
2001 (3) SA 1033
(C) 1057D-1058G). The
other view is that an error of law is material only if it effects the
outcome of the administrative action.
(
Liberty Life Association of
Africa Ltd v Kachelhoffer NO
2005 (3) SA 69
(C) para 48). I
prefer the latter approach: Since the Committee based its decision on
the conditions of SBD9, its legal error regarding
the provisions of
the
Competition Act did
not and could not effect the outcome of the
decision and hence no material irregularity was committed.
(74)
The purpose of the conditions contained in SBD9 would certainly not
have been attained if the submission of two separate bids
by two
close corporations in tandem or two separate bids by the same person
had been treated as responsive, That would have constituted
a
material irregularity.
(75)
Viva further contends that Viva and Corro-Wear's bids were not
competing bids and that they should be read in the alternative
because one bid was for all services for the whole country and the
other bid was for all services for only part of the country.
(76)
The Instructions to Bidders regarding alternative bids contain the
following conditions:
Any
Bidder who has duly submitted an offer which in all respects complies
with the Specification may, at his own initiative, also
submit an
ALTERNATIVE OFFER at the same time or at any time prior to the
closing time of bids. Provided that the Bidder's offer
to
specification is acceptable to the State Bid Board in every respect,
his alternative offer might also be considered for purposes
of the
award of the Contract. Any deviation from specification or
alternative condition of bid must be clearly stated and any saving
or
additional expenditure for the State brought about by each deviation
or alternative proposal must be quantified in the bid documents.
If
a bidder wishes to submit alternative bids, two separate complete
sets of Schedules, Forms, etc., shall be filled in and submitted
in
respect of each alternative Bid, clearly marked "Alternative A"
or "Alternative" etc.
Details
of all departures from, or modifications to the Specification, in the
case of alternative Bids, shall be clearly stated
in Annexure A.'
(77)
This condition clearly contemplates an alternative bid submitted by
the very same bidder as an alternative bid to his main
bid. In any
event, neither Viva's nor Corro-Wear's bid contained any indication
of whatsoever nature that they were submitted as
alternative bids,
nor was there compliance with this condition regarding the manner in
which such bids should be marked. Furthermore,
no saving or
additional expenditure for DWAF brought about by an alternative bid
was addressed in the bid documents as required
for alternative bids.
These are all clear indications that the bids submitted by Viva and
Corro-Wear were never submitted as alternatives
bids, nor can they
objectively be seen as such. No wonder the Committee evaluated the
bids of Viva and the Joint Venture as competing
bids as apposed to
alternative bids.
(78)
I conclude that I cannot find any irregularity in the administrative
process relating to Viva's disqualification, in view of
which I must
find that Viva has not proved its cause of action for the judicial
review of the Committee's decision.
(79)
In the result I make the following order:
The
application is dismissed with costs.
A
B ROSSOUW A J
DATE:
16/03/2015
DATE
OF HEARING: 9 MARCH 2015
DATE
OF JUDGMENT: 16 MARCH 2015
FOR
THE FIRST AND SECOND APPLICANTS:
ADVOCATES:
MM SNYMAN (With him ND DE LANGE)
ATTORNEYS:
NORTON ROSE FULBRIGHT (INCORPORATED AS DENEYS REITZ INC), UMHLANGA
C/O MARITZ SMITH VAN EEDEN INC, PRETORIA
FOR
THE FIRST AND SECOND RESPONDENTS:
ADVOCATE:
Z Z MATEBESE
ATTORNEYS:
THE STATE ATTORNEY, PRETORIA
FOR
THE THIRD RESPONDENT:
ADVOCATE:
K TSATSAWANE
ATTORNEYS:DIALE
MOGASHOA ATTORNEYS
FOR
THE FIFTH RESPONDENT:
ADVOCATE:
A G SOUTH
MACROBERT
INC, PRETORIA