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[2012] ZAGPPHC 168
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Piet Bok Construction CC v Minister of Public Works and Others (45193/2011) [2012] ZAGPPHC 168 (15 August 2012)
NOT
REPORTABLE
IN
THE HIGH COURTOF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT)
Case
number: 45193/2011
Date:
15 August 2012
In
the matter between:
PIET
BOK CONSTRUCTION
CC
…....................................................................
Applicant
And
MINISTER
OF PUBLIC
WORKS
...........................................................................
1st
Respondent
THE
CONSTRUCTION INDUSTRY
DEVELOPMENT
BOARD
…................................................................................
2nd
Respondent
NEO SIYABONGA CONSTRUCTION
AND
PLANT HIRE
CC
............................................................................................
3rd
Respondent
MAVIO TRADING ENTERPRISES
CC
..................................................................
4th
Respondent
MINISTER
OF CORRECTIONAL
SERVICES
.......................................................
5th
Respondent
JUDGMENT
PRETORIUS
J.
[1]
This is a review application where the applicant requests the court
to review and set aside the decision by the first respondent
to award
tender number H09/052 to the Joint Venture formed by the third and
fourth respondents. Secondly that the decision by the
second
respondent to grant the third respondent a 6CE Contractor Grading be
reviewed and set aside; and that the first respondent
be ordered to
forthwith award said tender H09/052 to the applicant. The first
respondent was represented in court by counsel who
only had
instructions to keep a watching brief, but not to participate in the
proceedings.
[2]
The tender was for waste water treatment works and water purification
works to be constructed, repaired, maintained and operated
at
Losperfontein and Groenpunt Prisons. That is the reason why the
Minister of Correctional Services is cited as fifth respondent,
but
no recourse is claimed against the fifth respondent.
[3]
Losperfontein Prison has 1400 inmates and personnel and the Groenpunt
Prison has 4000 inmates and personnel. They rely on water
and
sanitation 24 hours a day every day of the year.
[4]
On 19 October 1997 a tender was advertised . The tender conditions
provided inter alia as follows:
"4.4
Standard risk management assessment criteria in respect of tenders
received for routine projects in the engineering and
construction
works environments:
Tender
offers will be evaluated by an Evaluation Committee based on the
technical and commercial risk criteria listed hereunder.
Each
criterion carries the same weight / importance and will be evaluated
individually based on reports presented to the Evaluation
Committee
by the Professional Team appointed on the project. A tender offer
will be declared non responsive and removed from any
further
evaluation if any one criterion is found to be present an
unacceptable risk to the Employer.
In
order for the evaluation reports to be prepared by the Professional
Team, the Tenderer is obliged to provide comprehensive information
on
form DPW-09 (EC). Failure to complete the said form will cause the
tender to be declared non-responsive and removed from any
further
consideration. The Employer reserves the right to request additional
information over and above that which is provided
by the Tenderer on
said form. The information must be provided by the Tenderer within
the stipulated time as determined by the
Project Manager, failing
which the tender offer will mutatis mutandis be declared
non-responsive."(Court's emphasis)
[5]
It is clear from these conditions that any tenderer who fails to
satisfy even one condition will be declared non-responsive
and
removed from any further evaluation. Should any one criterion be
found to present an unacceptable risk to the employer the
tenderer
will be declared non-responsive.
[6]
The first respondent appointed Virtual Consulting Engineers (VCE) as
consulting engineer for the project. Dr Veldtman of VCE
conducted the
risk assessment of the third and fourth respondents as they were the
successful tenderers in a joint venture. The
third and fourth
respondents listed only one project under the heading "current
work" which was for a piggery structure.
Six projects were
listed under previous work. In the first listed project the third and
fourth respondents were subcontractors
and the project manager could
thus not comment. In project two it was indicated by the contact
person at the number supplied by
the third and fourth respondents
that he had no knowledge of Neo Siyabanga Construction; the same
applied for the third project.
The fourth project related to a 450mm
water pipe project and storm water drains for Lekwa Municipality. It
was confirmed that the
work had been completed successfully. Mr
Kuona, the contact person for the fifth project, said that he had no
knowledge of the
firm Neo Siyabanga Construction.
[7]
The director Mr K Ramborosa of Hlangani Engineers were contacted,
regarding the sixth project and confirmed that the 600mm pipe
lines
were done, but that Neo Siyabonga were not involved in any of the
contracts. There was no information available in five of
the six
projects listed by the third and fourth respondents as previous work
done by them. Counsel for the third and fourth respondents
had to
concede that these facts provided by the third and fourth respondents
on five of the six projects were lies, but requested
the court to
ignore it completely. The reason why the court should ignore these
lies by the third and fourth respondents is, according
to their
counsel, that they had a sponsor for R4 million and therefor the
court should not take the outright lies by the third
and fourth
respondents into consideration. According to counsel for the third
and fourth respodents a sponsorship in such conditions
would be good
enough to secure the tender.
[8]
They do not set out the reasons for the outright lies in respect of
previous work. The only conclusion the court can come to
is that they
told these lies to ensure that the contract be awarded to them.
[9]
The final conclusion Dr Veldtman came to regarding the joint venture
of third and fourth respondents is:
"No
evidence of previous contracts which included reinforced concrete
work or wastewater and water purification works could
be found.
Experience in maintenance and operation of wastewater and water
purification plants is essential, to execute the work
at
Losperfontein and Groenpunt Prisons. Based on the lack of sufficient
appropriate construction experience Neo Siyabonga JV Mavio
Trading
will pose a risk in completing the Scope of Work related to the
contract" (Court's emphasis)
[10]
The risk assessment as set out by Dr Veldtman is not disputed. The
third and fourth respondents aver:
"I
wish to state that the risk component was not the sole criteria of
determining the successful bidden Save to state that
the respondents
was awarded the tender on the basis of having scored the highest
points, the respondents are not able to give further
reasons for the
award and these shall be advanced by the first respondent."
(Court's emphasis)
[11]
The Bid Evaluation Committee (BEC) had a meeting on 24 March 2012
where it was decided:
"The
Project manager will now compile a recommendation in which Piet Bok
Construction, the second highest bidder, will be recommended."
[12]
The applicant argues that the third and fourth respondents had to be
removed from any further evaluation. On 20 April 2010
the BEC found:
"It should be noted that the approval granted on the 12/03/2010
with respect to award necessarily being made
to highest point scoring
tenderer exist only in circumstances when such a tenderer does not
meet legislative requirements e.g.
No tax clearance certificate in
cases where documented evidence exists on failed or cancelled
projects. The CIDB grading should
be the requirement of the
contractor's technical capacity to do the work."
and:
"After
thorough discussion by the BEC members decision is made that Project
Manager have to compile a recommendation to appoint
Neo Siyabonga JV
Mavio Trading." (Court's emphasis)
[13]
The third and fourth respondents score was 91.19, whilst that of the
applicant was 91 points. The score of the joint venture
was higher
due to the BEE credentials.
[14]
The joint venture attempted to cede its right, title and interest in
the tender to the Stuart Group (Pty) Ltd against payment
of R1,200
000.00. The "Memorandum of Cession Agreement" was signed,
but not implemented. It was in contravention of the
general
conditions of the contract.
[15]
VCE compiled reports on both the applicant and the joint venture of
third and fourth respondents. The conclusion reached by
Dr Veldtman
of Virtual Consulting Engineers regarding the applicant was:
"The
Contractor has completed various contracts related to wastewater
treatment reinforced concrete structures as well as pumps
installations: - The tender price is market related and well
balanced. All references confirmed a high level of work and quality
and contract administration/' (Court's emphasis)
[16]
This in contrast to the conclusion he reached regarding the joint
venture of third and fourth respondents:
"It
seems as if the JV has limited construction experience and the
reference given for current work is as a sub-contractor.
Confirmation
of the quality of work could not be given by the client, Department
of Agriculture, and a technical risk evaluation
could not be done.
The
contract consists of building work and does not contribute to
experience in civil engineering work related to wastewater
purification
work.
For
previous work, confirmation could only be obtained for Project no 4
from Mr K Mahlangu who confirmed the completion of a water
pipe and
storm water drains contract.
No
evidence of previous contracts which included reinforced concrete
work or wastewater and water purification works could be found.
Experience in maintenance and operation of wastewater and water
purification plants is essential, to execute the work at
Losperfontein
and Groenpunt Prisons. Based on the lack of sufficient
appropriate construction experience Neo Siyabonga JV Mavio Trading
will
pose a risk in completing the Scope of Work related to the
contract' (Courts emphasis)
[17]
In the "Re-evaluation due to previous evaluation that were
deemed to be flawed" under "Motivation for not recommending
the highest scoring Tender" it is set out:
"7.3
Motivation(s) for not recommending the highest scoring Tenderer (if
applicable):
A
previous submission recording the reasons for not awarding to the
highest scored bidder, was approved on 12 March 2010. (refer
to the
attached original submission).
The
highest scored bidder was evaluated for technical risks with the
information available on previous and current projects. No
information of similar projects was provided. However, the reference
provided by the bidder, was contacted and it was ascertained
that the
said bidder was a sub-contractor on projects that were indicated. The
main contract value was around R22 000 000-00 and
the sub-contract
value of work was around R 2 900 000-00 which consisted of general
building work. On another project to the value
ofR1 100 000-00 the
said bidder has been involved with subcontract work to the value of
around R 500 000-00. The nature of this
work was storm water drainage
and water reticulation work. It is not understood why the said bidder
did not provide any references
to bigger civil engineering contracts
and the grading of the said bidder is not understood. In light of the
fact that the said
bidder could not provide details relating to
similar projects, the risk to award this contract to the said JVis
deemed too high.
The
commercial risk is also deemed high, as the tariffs are unbalanced.
Lastly, arithmetical errors made by this bidder also indicates
an
R529 142.40 loss to the bidder.
Therefore
the technical and commercial risk of appointing the highest scored
bidder is deemed to be extremely high and unacceptable."
(Court's emphasis)
[18]
The documents that the applicant attached to the application
indicated that the BEC supported the award to the applicant, but
the
decision was again referred to the BEC from the Bid Adjudication
Committee (BAC) on 2 December 2010.
[19]
It is clear that the tender was awarded to the joint venture on 2
February 2011 on its CIDB grading. The evaluation in the
risk
assessment did not play any role in awarding the tender to the joint
venture of third and fourth respondents.
[20]
The second respondent declared in its answering affidavit:
"The
2006 regulations with regard to newly constituted enterprises allowed
contractor applications to be graded using financial
capability only,
as these enterprises will not have a track record. As such, these
enterprises were allowed to provide a sponsorship
to substantiate its
net asset value."
[21]
This could by no means be applicable on third and fourth respondents
as they had provided a so-called track record of projects
they had
completed although this was based on outright lies. The requirement
to adhere to the satisfaction of the risk assessment
was totally
ignored and disregarded by the National Bid Committee.
[22]
No reason is set out by the second respondent as to why the third and
fourth respondents were not disqualified immediately
due to their
inexperience and outright lies which caused Dr Veldtman to come to
the conclusion that they would pose a risk to complete
the work
related to the contract.
[23]
It is clear from all the evidence that the third and fourth
respondents have no previous experience in the operation and
maintenance
of wastewater and water purification plants. The two
prisons are not ordinary facilities and have inmates and corrective
facility
personnel who are dependent on proper water supplies and
sanitation 24 hours a day year in and year out. These are not
facilities
that can be closed down whilst work is being done.
[24]
The court finds that the tender should not have been awarded to the
third and fourth respondents due to their lack of experience
and the
fact that they had lied in their tender document regarding previous
work done. They should have been disqualified immediately
as
non-responsive on those grounds. The work they have done at the
prisons since the tender has been awarded was maintenance work
as
they are waiting for a decision on the enviromental impact assesment.
They have thus not started the project as such.
[25]
The tender was originally advertised on 19 October 2007 and awarded
to the third and fourth respondents on 2 February 2011.
It took three
years and four months for the tender to be awarded. Should the court
find against the respondents the whole process
will have to start
afresh. In the light of the history of it taking three years and four
months to award the tender and the conditions
due to the work having
to be done at the prisons, the court has to decide whether there are
exceptional circumstances in this matter
which would cause the court
to order the second respondent to appoint the applicant.
[26]
Section 8
(1) (c) (ii) (aa) of the
Promotion of Administrative
Justice Act 3 of 2000
provides:
"(1)
The court or tribunal, in proceedings for judicial review in terms of
section 6
(1), may grant any order that is just and equitable,
including orders-fa) ...
(b)
...
(c)
setting aside the administrative action and-
(')...
(ii)
in exceptional cases-
(aa)
substituting or varying the administrative action or correcting a
defect resulting from the administrative action;" (Court's
emphasis)
[27]
In Bato Star Fishing (Pty) Ltd v Minister of Eviromental Affairs and
Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC) O'Regan J held:
"[48]
In treating the decisions of administrative agencies with the
appropriate respect, a Court is recognising the proper
role of the
Executive within the Constitution. In doing so a Court should be
careful not to attribute to itself superior wisdom
in relation to
matters entrusted to other branches of government A Court should thus
give due weight to findings of fact and policy
decisions made by
those with special expertise and experience in the field. The extent
to which a Court should give weight to these
considerations will
depend upon the character of the decision itself, as well as on the
identity of the decision-maker. A decision
that requires an
equilibrium to be struck between a range of competing interests or
considerations and which is to be taken by
a person or institution
with specific expertise in that area must be shown respect by the
Courts. Often a power will identify a
goal to be achieved, but will
not dictate which route should be followed to achieve that goal. In
such circumstances a Court should
pay due respect to the route
selected by the decision-maker This does not mean, however, that
where the decision is one which will
not reasonably result in the
achievement of the goal, or which is not reasonably supported on the
facts or not reasonable in the
light of the reasons given for it, a
Court may not review that decision. A Court should not rubber-stamp
an unreasonable decision
simply because of the complexity of the
decision or the identity of the decision-maker. "
and
at par 57:
"[57]
In circumstances such as these, moreover, where the decision-maker is
seeking to evaluate a large number of applications
against similar
criteria, the dictum in the Computer Investors Group case is not
relevant. In cases such as the present, it will
be permissible, and
indeed will often be desirable, for administrative decision-makers to
adopt and apply general criteria evenly
to each application in order
to ensure that the decision subsequently made is fair and
consistent." (Court's emphasis)
[28]
In Commissioner, Competition Commission v General Council of the Bar
of South Africa and Others
2002 (6) SA 606
(SCA) Hefer AP found:
"[14]
It is not necessary to deal at length with a reviewing Court's power
to substitute its own decision for that of an administrative
authority. Suffice it to say that the remark in Johannesburg City
Council v Administrator, Transvaal, and Another that 'the Court
is
slow to assume a discretion which has by statute been entrusted to
another tribunal or functionary' does not tell the whole
story. For,
in order to give full effect to the right which everyone has to
lawful, reasonable and procedurally fair administrative
action,
considerations of fairness also enter the picture. There will
accordingly be no remittal to the administrative authority
in cases
where such a step will operate procedurally unfairly to both parties.
As Holmes AJA observed in Livestock and Meat Industries
Control Board
v Garda
'.
. . the Court has a discretion, to be exercised judicially upon a
consideration of the facts of each case, and . . . although
the
matter will be sent back if there is no reason for not doing so, in
essence it is a question of fairness to both sides1."
(Court's
emphasis)
[29]
In this instance the court must not only have regard to the fairness
of dealing with the tender to the applicant and third
and fourth
respondents, but also as to fairness to inmates and personnel at
Losperfontein - and Groenpunt prisons.
[30]
The fact that the applicant had initially been recommended by the BIC
as the preferred tenderer, inter alia, due to its previous
experience
must be taken into consideration. It was the Bid Adjucation Committee
(BAC) who did not approve the bid by the applicant.
The BAC decided
that the CIDB grading should be the only requirement of the
contractor's technical capacity.
[31]
This technical capacity was the reason for the applicant's contention
that the third and fourth respondents could not have
been appointed.
It is clear that the third and fourth respondents lied in respect of
the projects they had previously been involved
in and completed.
There is no evidence that they have any experience in sanitation or
water purification works.
[32]
The information supplied by the applicant as to previous projects
related to wastewater treatment; constructing a reservoir;
upgrading
of a water purification plant; earthworks; road; stormwater and
sewage; sewage. All these projects were completed and
when Dr
Veldtman enquired all the clients were satisfied. The tender price
was 11.5% below the pre-tender estimate and 14% lower
than the
average of all the tenders received. The abovementioned projects
related to similar work as the current tender.
[33]
The court has to agree with Dr Veldtman that the joint venture of
third and fourth respondents "will pose a risk in completing
the
Scope of Work related to the contract." Furthermore the third
respondent's CIDB rating had lapsed on 27 May 2011.
[34]
It is clear that in this instance this is an exceptional case as set
out in section 8 (1) (c) (ii) of Promotion of Administrative
Information Act. Therefore the court should intervene and appoint the
contractor to avoid a further lapse of three years and four
months
before a contractor is appointed. This is specially so where the
contract is in regards to the two prisons which rely on
clean water
and adequate sanitation for 4000 and 1500 people respectively.
[35]
The second respondent filed a notice indicating that the second
respondent will abide by the court order.
[36]
I therefore make the following order:
1.
The decision by the First Respondent to award the tender under tender
number H09/052 to the Joint Venture formed by the Third
and Fourth
Respondents, is reviewed and set aside;
2.
The First Respondent is ordered to forthwith award the tender under
tender number H09/052 to the applicant;
3.
The Third and Fourth Respondents are ordered jointly and severally to
pay the applicant's costs including the costs occasioned
by the use
of two counsel.
Judge
Pretorius
Case
number : 45193/2011
Heard
on : 25 July 2012
For
the Applicant / Plaintiff : Adv Maritz SC
:
Adv Vermaak
Instructed
by : PJ Faurie Inc
For
the 1st Respondent : Adv Mangolele
Instructed
by : State Attorney
For
the 3rd and 4th Respondent : Adv Majozi
Instructed
by : Motalane Kgariya Inc
Date
of Judgment : 15 August 2012