About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2012
>>
[2012] ZAGPPHC 66
|
|
D F S Flemingo SA (Pty) Ltd v Airports Company South Africa Ltd and Others (70057/2009) [2012] ZAGPPHC 66 (17 May 2012)
NOT
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
/ES (REPUBLIC OF SOUTH AFRICA)
CASE
NO: 70057/2009
Date:17/05/2012
IN
THE MATTER BETWEEN:
D
F S FLEMINGO SA (PTY)
LTD
…........................................................................
APPLICANT
AND
AIRPORTS
COMPANY SOUTH AFRICA
LTD
............................................
1ST
RESPONDENT
BIG FIVE DUTY FREE (PTY)
LTD
...............................................................
2nd
RESPONDENT
THE
TENDER BOARD OF
ACSA
................................................................
3
rd RESPONDENT
JUDGMENT
PHATUDI.
J
[1]
The applicant seeks to review and set aside:
1.1
the tender for the Operation of the Core Duty and VAT-free Stores in
the international department and arrival airside terminals
at ORTambo
International Airport, Cape Town international Airport and the new
International Airport at La Mercy (north of Durban
KZN) bid reference
number CDF08.05/2009 (the tender); and/or
1.2
... the decision of the first and/or third respondent to award the
tender to the second respondent
1
.
[2]
On the 29 May 2009, the first respondent (ACSA) caused issue of an
invitation to bid (ITB) calling upon "proposals from
prospective
retailers to lease retail space as described in more detail in ...
ITB"
2
[3]
The applicant and the second respondent (Big Five), among others,
submitted their tender bids. The tender was awarded to Big
Five on 26
August 2009. Big Five, the incumbent since the year 2000 and a
successful bidder, entered into a lease agreement on
25 September
2009 with ACSA on terms set out in the pro forma lease agreement
(lease agreement).
[4]
The applicant succeeded in interdicting ACSA and Big Five from
implementing the lease agreement pending the institution and
finalisation of this review proceeding.
[5]
Big Five continues to operate the core duty and VAT-free retail
outlets at OR Tambo International Airport, Cape Town and La
Mercy
King Shaka International Airport on the terms it had with ACSA since
the year 2000. Big Five's proposal to extend its operation
by another
five years was declined by ACSA. ACSA decided to internationally
advertise the tender. The invitation to bid (ITB) was
drawn and
published.
[6]
The ITB
3
sets out fully and in great detail the requirements, terms and
conditions the prospective bidders are to comply with. The important
sections for the purposes of this application are the General Terms
(GT) (section II) and Evaluation Procedure 8c Criteria (EPC)
(section
III). The GT spells out the definition of words and phrases used in
the ITB, the manner in which the bids will be handled
and how the
tender process would be conducted.
[7]
It is worth noting that '[b]ids will be evaluated by ACS A in
accordance with the procedure and criteria set out in Schedule
III
(evaluation procedure and criteria)...'
4
It is further stipulated at clause 10 that '[s]ubject to clause 8.1.1
above, the Tender Board [TB] subject to the approval of the
Board of
Directors [BD] of ACSA, is the sole body empowered to award any Bid
and no other Person or body shall have the power or
right to amend a
Bid or to make any concession or to conclude.any agreement with any
person in respect thereof
5
[8]
The applicant's counsel
6
submits that the ITB identifies three particular bodies in the
evaluation and decision making process. The first, Bid Evaluation
Committee (BEC) followed by the Tender Board (TB) and lastly, ACSA
Board of Directors (BD).
[9]
Section III of ITB stipulate 'the Bid Evaluating Committee and the
Tender Board will consider the following criteria. An indication
of
the maximum points capable of being awarded for each criterion is
included.'
7
[10]
The Tender Board (TB), as stipulated in clause 8.3 of ITB, shall be
entitled to rely on evaluations, findings or recommendations
made ...
for this purpose. Clause 10.1 of ITB provides that '[subject to
clause 8.1.1 above, the Tender Board, subject to the approval
of the
Board of Directors of ACSA, is the sole body empowered to award any
Bid and no other person or body shall have the power
or right to
award a Bid or to make any concession or to conclude any agreement
with any person in respect thereof.'
[11]
After evaluation of all bids, BEC recommended the "entity
scoring the highest points, Big Five, to be awarded the tender
for a
ten year period".
The
recommendation clause further stipulate-
"Furthermore
is [sic] must be noted that Big Five Duty Free (Pty) Ltd offered to
pay ACSA a further amount of 12,5% of their
after tax profit as
additional rental."
8
[12]
The applicant alleges that this "offer by the second respondent
has been taken into account in awarding the tender to
the second
respondent".
9
The applicant's counsel further submits that this "further 12,
5%" constitutes an additional term unsolicited and outside
the
parameters of the constraints of the ITB, which renders the second
respondent's bid to be disqualified. He refers this "further
12,
5%" as a "sweetener" or "unsolicited extra carrot
hanging in front of ACSA". He further submits that
this "further
12, 5%" was taken into account in awarding the bid.
[13]
The first and third respondents' response to the applicant's
allegation is that 'the Bid Evaluation Committee did not take
into
consideration, for purposes of assessing and evaluating the bids, the
statement "Furthermore it must be noted that Big
Five Duty Free
(Ptv) Ltd offered to pav ACSA a further amount of 12. 5% of their
after tax profit as additional rental.1"
10
It is further placed on recorded that '...no considerations other
than those set out in the ITB were taken into account in the
evaluation and assessment of the submissions made by the bidders'.
11
[14]
I enquired from first and third respondents' counsel
12
to "unpack" the "furthermore" statement appearing
in clause 5 of the recommendation. Counsel submits that the
"further
12, 5%" did not influence the outcome of the recommendation as
it appears nowhere in considering the scoring.
I further enquired as
to where does this "further 12, 5%" come from or how did it
come about that ACSA or Tender Board
make mention of it in their
recommendation. Counsel submits that there is no evidence on record
as to how this "offer"
came to the recommendation.
[15]
Second respondent's counsel begged leave to address this "further
12, 5% rental." He submits that he realizes that
the first and
third respondents' counsel is at pains in "unpacking" the
last sentence in the recommendation. He submits
that that did not
play a role in influencing the scoring.
[16]
Section 6(2) provides that "[a] court or tribunal has the power
to judicially review an administrative action if
(a)
...
(b)
a mandatory and material procedure or condition prescribed by an
empowering provision was not complied with;
(c)
the action was procedurally unfair;
(d)
...
(e)
the action was taken (i)
(ii)
...
(iii)
because irrelevant considerations were taken into account or relevant
considerations were not considered."
[17]
In my evaluation of the evidence tendered and submissions made, it is
clear that the second respondent offered to pay ACSA
a further amount
of 12, 5% of their after tax profit as an additional rental. It is
further clear from first and third respondents'
submission that BEC
did not take this 12, 5% into consideration in assessing and
evaluating the bids. Counsel for first and third
respondents was
indeed at pains to address me as to how this 12, 5% came into the
recommendation clause. It is not clear from the
record as to how
either ACSA or TB came to the recommendation especially the
"furthermore" clause.
[18]
In my view, this "further 12, 5% offer" by the second
respondent should have been disclosed to the other bidders.
It is
further in my view that this "sweetener" did play a role in
the final recommendation and the awarding of the tender
to the second
respondent. It was improper or irregular on the part of the first
and/or third respondents to consider the "sweetener"
without an indication on the record of proceedings as to how either
ACSA or TB dealt with it. The decision taken by ACSA or TB
was due to
irrelevant considerations taken into account' . Failure to disclose
the offer made by the second respondent to the applicant
and other
bidders is unfair.
[19]
In CEO, SASSA v Cash Paymaster
2012 (1) SA 216
Tshiqi, JA dealt with
the "mandatory and material procedure or condition prescribed by
an empowering provision" requirement
as worded in s 6(2) (b) of
PAJA. The court held, following the principle set out in Nokeng Tsa
Taemane Local Municipality v Dinokeng
Property Owners Association,
that "[i]t 's important to mention that the mere failure to
comply with one or other administrative
provision does not mean that
the whole procedure is necessarily void. It depends in the first
instance on whether the Act contemplated
that the relevant failure
should be visited with nullity and in the second instance on its
materiality." The court further
referred to a decision in Moseme
Road Construction CC & Others v King Civil Engineering
Contractors (Pty) Ltd & Another
2010 (4) SA 359
(SCA) where it
was held that "not every slip in the administration of tenders
is necessarily to be visited by judicial sanction".
The court
held that consideration of public interest, pragmatism and
practicality should inform the exercise of a judicial discretion
whether to set aside administration or not"13
[20]
Considering the decisions and the provisions relied on as falling
within section 6(2) (b) of PAJA, I am of the view that the
applicant's point is not fatal. What is fatal is the consideration of
an undisclosed "sweetener" offer outside the ITB
in making
further recommendations.
[21]
Section 217 of the Constitution of the Republic of South Africa
provides that-
"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."
[22]
Consideration of "a further 12, 5%" by ACSA or TB was not
in accordance with the system that is fair and transparent
with other
bidders and, in my view, on this leg alone, the tender stands to be
set aside. The second respondent was and still is
the incumbent. The
services have not been and will not be interrupted by the setting
aside of the tender.
[23]
It is trite that costs follow the event. The applicant succeeds with
the application and is entitled to the costs, such costs
to include
the costs of two counsel.
[24]
In the result, I make the following order.
ORDER
The
decision of the first and/or third respondent to award the tender for
the Operation of the Core Duty and VAT-free Stores in
the
International Departures and arrival airside terminals at OR Tambo
International Airport, Cape Town International Airport and
the new
International Airport at La Mercy (north of Durban KZN) bid reference
number CDF08.05/2009 to the second respondent is
set aside with
costs, such costs to include the costs of two counsel.
AML
PHATUDI
Judge
of the High Court
Heard
on: 16 and 17 April 2012
For
the Appellant: Adv MC Maritz SC
:
Adv EC Labuschagne SC Instructed by: Messrs: Savage, Jooste &
Adams Incorporated
For
the First and Third Respondent: Adv KD Moroka SC
:
Adv L Gcabashe
:
Adv Jara
Instructed
by: Messrs: Mkhabela Huntley Adekeye Inorporated
For
the Second Respondent: Adv Wim Trengove SC
:
Adv John Peter SC
Instructed
by: Messrs: Fluxmans Incorporated
Date
of Judgment: 17 May 2012
1
Notice
of motion. Review application pi & 2
2
Invitation to Bid - p44, paragraph 11. Cf paragraph 10.1 AA p!3.
3
The concept ITB is annexed as PS1 to AA at pp42-l 17 and Record of
Proceedings bundle, volume 1 pplC-76
4
Clause
8 - Bid Evaluation - ITB at p52 on Record of Proceedings
5
ITB
p54 clause 10.1
6
Adv
M C Maritz SC
7
Record
of Proceedings p2S clause 5 of ITB or p69 RA Vol 1
8
Tender
Evaluation Report, Record of Proceedings p628 paragraph 5, (p304 5FA
para 6.1)
9
Supp
FA p304 para 6.2
10
First
and second respondents' AA pi 142 para 83.2 First and second
respondent's AA pi 142 para 83.3
11
Adv
K D Moroka SC
12
Adv
K D Moroka SC