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[2015] ZAECBHC 30
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Sizisa Ukhanyo Trading 389 CC v Department of Sports, Recreation, Arts And Culture, Province of the Eastern Cape (535/12) [2015] ZAECBHC 30 (6 October 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE LOCAL DIVISION, BHISHO)
Case
No: 535/12
In
the matter between:
SIZISA
UKHANYO TRADING 389 CC
APPELLANT
and
DEPARTMENT
OF SPORTS, RECREACTION,
ARTS
AND CULTURE, PROVINCE OF THE
EASTERN
CAPE
RESPONDENT
FULL
COURT JUDGMENT
MBENENGE
J:
[1]
This is an appeal against the judgment of Saba AJ setting aside an
award made by the respondent to the
appellant of tender
SCUM-14-12/13-0013 (the Tender). The appeal is serving before
this Court with the leave of the court
a quo
.
[2]
The central issue of this matter involves the interpretation of a
special condition of the Tender.
The respondent successfully
contended before the court
a quo
that the special condition is
inherently ambiguous and unfair. The appeal was prosecuted
principally on the basis that the
special condition is not ambiguous
.
[3]
The salient facts in light of which the issue of this matter is to be
determined are largely common
cause or, at the very least, not in
dispute. There are, throughout the Eastern Cape, a large number
of educational, social
and cultural groups which require to attend
various functions. Most of these groups lack the means to cover
the cost of such
transport either in whole or in part.
[4]
As part of its broader mandate, the respondent itself had been
arranging and providing for various
groups to be transported
throughout and beyond the Eastern Cape Province.
Transport operators were engaged to
provide transport on an
ad hoc
basis.
[5]
The respondent decided to appoint a single coordinating service
provider which in turn would be
in a position to subcontract to
operators holding authorities issued in terms of the
National Land
Transport Act 5 of 2009
. To that end, an invitation for the
provision of services to transport athletes/players/participants to
various sport and
recreation events in and outside of the Eastern
Cape was advertised in the local press on 18 May 2012.
[6]
The bid specifications set out the background to the Tender and
certain specific requirements.
There were also “
special
conditions
” that formed part of the invitation to tender.
One of those conditions, which is at the heart of this appeal, reads:
“
The bidder shall
be obliged to sub-contact transport service providers in the 8
districts of the province and copies of such agreements
must be
attached (letters from associations). When possible, the
principal must sub-contract to the local transport service
providers
from where a trip commences.”
[7]
Nine tenders, including that of the appellant, were received from
various entities and joint ventures.
Eight of the nine tenders
were eliminated on various grounds, with the respondent’s Bid
Evaluation Committee (the BEC) having
been of the view that the
appellant had submitted a responsive bid.
[8]
On the recommendation of the BEC, endorsed by the Bid Adjudication
Committee, the Tender was awarded
to the appellant, culminating in
the conclusion of a Service Level Agreement by and between the
respondent and the appellant on
11 July 2012 (the SLA).
[9]
In its report recommending the approval of the appellant’s bid
as having been compliant
with the specification requirements, the BEC
stated that the attachment of “
letters of guarantee for
cooperation from both (bus and taxi associations) from all
districts”
had been one of the criteria adopted to
eliminate non-compliant tenderers.
[10]
The BEC report further pointed to at least three of the tenderers as
having been excluded on the basis that
there had been no compliance
with the special condition subject to this appeal (the special
condition). The appellant’s
tender provided a single
letter from the Mdantsane East London and District Taxi Association
which does not operate in the eight
districts comprising the Eastern
Cape Province, but in the Mdantsane East London District.
[11]
After the appellant had commenced performing certain services
pursuant to the SLA, meetings involving
the Member of the Executive
Council responsible for Sports, Recreation, Arts and Culture in
the Eastern Cape Provincial Government,
the Head of the respondent
Department and representatives of bus and taxi associations in the
Eastern Cape were held on diverse
occasions. Subsequent to
those meetings, the respondent,
having been
of the view that the Tender was invalid, penned a letter to the
appellant which, in so far
as it is
relevant hereto, reads:
“…
Subsequent
to the conclusion of the Service Level Agreement a number of
association in the bus and taxi industry have raised queries
concerning the Evaluation and Adjudication of the aforesaid tender.
On the instruction of the
MEC and HOD of the Department, an urgent investigation was undertaken
to evaluate the concerns which were
raised. In addition
independent legal advice was obtained.
The investigation
undertaken by the Department have revealed that one of the “
special
conditions
” to the invitation to tender was, at least,
ambiguous…
The Department’s
investigations has revealed that what in fact was intended were
letters of support confirming the co-operation
from both bus and taxi
associations in all 8 districts.
The intention was that
the bus and taxi associations in all of the districts would confirm
that the service provider had the necessary
support and co-operation
from such associations.
On reconsideration of
your Company’s tender, it is clear that the aforesaid
requirement was not met other than, at best, in
respect of one
district.
The advice that the
Department has received is that ambiguous conditions, which may have
resulted in uncertainly, render the entire
tender process unfair.
The incorporation of ambiguous conditions of tender do not meet the
standard required by Section 217
of the Constitution and the PPPFA.
Under the circumstances
the Department has decided that the entire tender process should
commence afresh…”
[12]
The appellant did not accept that the Tender was invalid and recorded
its intention to enforce the terms
of the SLA. The divergence
of views that ensued between the parties hereto resulted in the
launch of proceedings before the
court
a quo
in which the
respondent sought, in the main, an order declaring the award of the
Tender unlawful and of no force or effect.
[13]
In its erudite judgment, the court
a quo
, after referring to
excerpts from the report of the BEC reasoned:
“
It is clear from
the excerpt from the BEC report in paragraph [14] above as well an
excerpt from the conditions of the contract
and operational
requirements referred to above that, in addition to the agreements
with sub-contractors,
letters of guarantee for cooperation from
taxi and bus associations had to accompany the bid documents.
However, the special conditions which read: ‘
The bidder
shall be obliged to sub-contract transport service providers in the 8
districts of the province and copies of such agreements
must be
attached (letters from association)…’
do not mention
what should be contained in the letters from associations. This
condition, in my view, is ambiguous.
Failure to indicate that
it was mandatory to attach the letters of guarantee from associations
in the special conditions, without
a doubt, created confusion between
the requirements for subcontract agreements to be entered into with
licensed operators and the
requirements for support from bus and taxi
associations. I may add … that the situation led to a
chaotic evaluation
process and unfairness between bidders.”
[14]
The court
a quo
also made moment of the fact that the
appellant had, in its quest to be compliant, submitted together with
its bid documents,
a letter emanating from one district whereas
the relevant conditions of contract and operational requirements
required letters
of guarantee for cooperation from all 8 districts,
as also the fact that the criteria used for eliminating other
tenderers namely,
failure to attach letters of guarantee for
cooperation from bus and taxi associations from all districts, had
not been applied
to the appellant.
[15]
The court
a quo
was of the view that the requirements of
section 217 of the Constitution demanding fairness, equity,
transparency and competitiveness
were not honored when the decision
to award the Tender to the appellant was made.
[16]
Placing reliance on
Allpay
Consolidated
Investment
Holdings Pty Ltd and Others v The Chief Executive Officer of the
South African Social Security Agency and Others
[1]
,
the court
a
quo
concluded that the confusion in the bid specification, the ambiguity
in the special condition as well as the criteria used in eliminating
other bidders rendered the Tender invalid and liable to be set aside.
[17]
The appeal was pursued principally on the contention that the court
a
quo
misdirected itself on the interpretation of the special
condition and should have found that the special condition was not
uncertain
or ambiguous, but that “
(letters from
associations)
” provided an alternative to tender
ers
who could not conclude agreements with transport service
providers and, as such, could not attach copies of such agreements.
[18]
There is not the slightest doubt that the special condition is
ambiguous. It is discernible, upon reading
the special
condition, even without having regard to factors outside of its four
corners, that it is manifestly ambiguous.
It could not be
contended that the words within brackets were meant to qualify the
statement preceding the brackets; “
agreements
” and
“
letters
” mean different things all together. The
contention that the words within brackets provided an alternative to
tenderers
who could not conclude agreements with transport service
providers nor attach copies of such agreements implies a reading
into
the clause without justification therefor. All that need be
said is that the ambiguity resulted in confusion. The
possibility is great that some interested tenderers might not have
tendered realizing that they would not meet the conditions and
specifications of the Tender. It is not impossible that such
non-participation might have resulted from the very ambiguity
contended for by the respondent. Some entities
may
well have thought
that
that they could not meet the conditions of tender.
[19]
Little wonder, therefore, that the tenderers, including the
appellant, did not understand what was required
of them and they
sought, as demonstrated by the record, to comply with the special
condition in different ways, resulting in the
inclusion of the
appellant and the exclusion of the rest.
[20]
An “
acceptable
tender
”
is defined in
section 1
of the
Preferential Procurement Policy
Framework Act 5 of 2000
as any tender “
which,
in all respects, complies with the specifications and conditions of
tender as set out in the tender document
.”
“
Fairness”
as enshrined in section 217 of the Constitution requires tender
conditions to be clear and unambiguous
[2]
.
[21]
The submission by Mr Buchanan SC, who appeared for the respondent,
that the present case is a clear example
of the unfairness which
immediately arises pursuant to uncertain and ambiguous material
tender conditions, must succeed.
[22]
None of the other appeal grounds, not persisted in by Mr Paterson SC,
who appeared for appellant at the hearing
of the appeal, has merit.
Regard being had to the
ambiguousness of
and the inherent unfairness created by the special condition, the
court
a quo
did not have to pronounce on whether the
appellant’s tender was compliant. Also, given that the
condition is in and
by itself ambiguous, the question of whether the
decision to launch the application was prompted by the taxi industry
in the award
of the tender, is irrelevant. The respondent’s
review application passed muster in all respects. There is no
basis for tampering with the order of the court
a quo
.
[23]
In the result, the appeal is dismissed with costs.
S
M MBENENGE
JUDGE
OF THE HIGH COURT
I
agree
G
GOOSEN
JUDGE
OF THE HIGH COURT
I
agree
I
T STRETCH
JUDGE
OF THE HIGH COURT
Appellant’s
Counsel:
Mr T
J M Paterson SC
Drake
Flemmer Orsmond (EL) Inc
KING
WILLIAM’S TOWN
Respondent’s
Counsel:
Mr R
G Buchanan SC
Bhisho
State Attorneys
EAST
LONDON
C/O
Office of the Premier
KING
WILLIAM’S TOWN
Heard
on: 11
September 2015
Delivered
on: 06 October 2015
[1]
2014(1)
SA 604 (CC), para
[2]
Allpay
(
supra
)
.
A
lso
see
Minister of Social
Development v Phoenix Cash and Carry
[2007] 3 All SA 115
(SCA) at 116, where it was held:
“
A
tender process which depends on uncertain criteria lends itself to
the exclusion of meritorious tenders and is opposed to fairness
among tenderers, and between tenders and the public body which
supposedly promotes the public weal.”