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[2024] ZAECMKHC 91
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Zen JV v Department of Transport: Province of Eastern Cape and Others (4495/2023) [2024] ZAECMKHC 91 (27 August 2024)
FLYNOTES:
ADMINISTRATIVE
– Tender –
Compliance
with specifications
–
Decision
to disqualify applicant’s bid – Requirement for
construction health and safety officer – Right
to
procedurally fair administrative action entailed opportunity to
make representations – Respondent ought to have
requested
clarity from applicant before making its decision –
Applicant demonstrated that its bid complied in all respects
with
specifications and conditions of tender – Decision was
unlawful – Reviewed and set aside.
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, MAKHANDA)
Of
interest
CASE
NO. 4495/2023
In
the matter between:
ZEN
JV
Applicant
and
THE
DEPARTMENT OF TRANSPORT:
PROVINCE
OF THE EASTERN CAPE
First respondent
THE
MEC OF THE EASTERN CAPE PROVINCE
DEPARTMENT
OF TRANSPORT
AND
COMMUNITY SAFETY
Second respondent
DOWN
TOUCH INVESTMENTS (PTY) LTD
Third respondent
JUDGMENT
LAING
J
[1]
This matter concerns a dispute over the first respondent’s
decision
to award a tender for the upgrading of a 20 kilometre
stretch of road, via the village of Clarkebury, in the Engcobo
district of
the Eastern Cape. The applicant obtained an interdict on
28 December 2023 to prevent the further implementation of the award
to
the third respondent, pending the review of the first respondent’s
decision. The matter presently before the court is the
review itself.
Background
[2]
The first respondent advertised a tender for the above construction
project
and stipulated the tender conditions that would apply. These
included the qualifying or eligibility requirements for any potential
bidder as well as the criteria that the first respondent would use
for the evaluation and adjudication of the bid itself.
[3]
The applicant is a joint
venture (‘JV’).
[1]
It submitted a bid for the goods and services to be supplied, quoting
a price of R 327,628,259. This was the lowest price of the
22 bids
that the first respondent received. Having calculated that it would
consequently obtain the maximum of 90 points for price,
as well as a
maximum of ten points for specific goals,
[2]
the applicant was confident that it would secure the tender.
[3]
Much to the applicant’s surprise, it subsequently learnt that
the first respondent had awarded the tender to the third respondent.
The successful bidder’s price, however, was R 363,528,290.
This was approximately R 36 million more expensive than the
applicant’s.
[4]
The first respondent’s tender required a bidder to propose a
construction
health and safety officer (‘CHSO’) for the
construction work to be carried out. Importantly, he or she needed a
minimum
of five years’ experience in such capacity on surfaced
road projects. When determining whether the applicant had met the
eligibility requirements, the first respondent’s Bid Evaluation
Committee (‘BEC’) found that it had failed to
comply; the
proposed CHSO, Ms Zandile Ndamase, had only four years’
experience. Consequently, the BEC disqualified the applicant’s
bid from further evaluation and adjudication.
[5]
The applicant pointed out
that Ms Ndamase had been employed by Rumdel (Pty) Ltd as a CHSO for
several years.
[4]
She had worked
on various surfaced road projects, including: the upgrading of the N2
from Tetyana to Sithebe Komkhulu, from 2016
until 2019; the upgrading
of the road from St Barnabas Hospital to the Hluleka Nature Reserve,
from 2019 until 2022; and the upgrading
of the R63 from Fort Beaufort
to Alice, from 2022 until present. This was a period of more than the
five years’ experience
stipulated for the tender. In the
circumstances, the applicant contended that it had met the
eligibility requirements. The first
respondent’s decision to
disqualify its bid was unlawful.
Applicant’s
supplemented case
[6]
The applicant supplemented its founding papers pursuant to the
delivery
of the record. It indicated that it had completed a
pro
forma
document included in the tender and described as
‘returnable schedule E’, setting out Ms Ndamase’s
experience.
The applicant had also attached a copy of her
curriculum
vitae
(‘CV’). Read together, the documents
demonstrated that Ms Ndamase had been a CHSO for surfaced road
projects from 2016
until 2023, when the bid was submitted. The
applicant asserted that it had met the eligibility requirements.
[7]
It went on to refer to the minutes of a BEC meeting from which it was
apparent that the BEC had resolved to seek clarity from some of the
bidders about the experience of key personnel. The BEC sought
approval in this regard from the Director: Supply Chain Management,
Mr Phumlani Hani. He refused, saying that this would give an
unfair
advantage to the bidders in question. The experience of the
applicant’s proposed CHSO had not been properly quantified;
its
bid had to be disqualified. The BEC accepted and implemented Mr
Hani’s advice.
[8]
The applicant contended that it was quite apparent from schedule E,
read
with Ms Ndamase’s CV, that she had the necessary
experience. If clarity was required, then both the tender conditions
and
the first respondent’s Supply Chain Management Policy
(‘SCMP’) permitted the BEC to have requested additional
information with the prior approval of the accounting officer or
delegated official. Furthermore, the applicant averred that it
had a
right to make representations to the first respondent before its bid
was disqualified. This would have allowed it to draw
the BEC’s
attention to the relevant documents, providing the clarity that had
originally been sought.
Respondent’s
case
[9]
In its supplemented answering papers, the first respondent set out
the
basis for its opposition. It argued that the applicant had failed
to exhaust the available internal remedies; section 7(2) of the
Promotion of Administrative Justice Act 3 of 2000 (‘PAJA’)
precluded the court from reviewing the matter. Furthermore,
the first
respondent referred to the definition of an ‘acceptable
tender’, provided in terms of section 1 of the Preferential
Procurement Policy Framework Act 5 of 2000 (‘PPPFA’), and
averred that the applicant’s bid did not comply with
the
specifications and conditions of the tender; the first respondent had
no authority to condone such non-compliance.
[10]
The first respondent dealt in greater detail with Ms Ndamase’s
experience, as reflected
in the applicant’s bid. It pointed out
that there were apparent inconsistencies, contradictions, and
deficiencies in the
information supplied. The applicant had failed,
for example, to stipulate project end dates and duration with
sufficient particularity.
The first respondent could not make
assumptions. If schedule E and Ms Ndamase’s CV were properly
interpreted, then she had
only 54 months and 11 days of experience.
This fell short of the 60 months (five years) required. The first
respondent noted, too,
that Ms Ndamase had failed to provide a
supporting or confirmatory affidavit in relation to her actual
experience.
[11]
Regarding Mr Hani’s involvement, the first respondent
emphasised that he was delegated
with authority to advise the BEC. He
merely indicated to the BEC that the applicant had failed to comply
with a mandatory requirement;
it was unnecessary and impermissible
for the BEC to seek clarity. The bid had to be disqualified.
In
reply
[12]
The applicant, in reply, asserted that no internal remedy was
available. Moreover, the
dispute concerned whether its bid was an
‘acceptable tender’, as defined, rather than whether any
non-compliance could
be condoned. What was at issue was a proper
interpretation of the documentation submitted to demonstrate Ms
Ndamase’s experience.
The applicant addressed, again, the
details thereof and argued that the documentation indicated a period
of six-and-a-half years,
more than what was required.
Issues
to be decided
[13]
From the papers, the following issues emerge: (a) was an internal
remedy available to the
applicant; (b) did the applicant’s bid
comply in all respects with the specifications and conditions of the
tender; (c) was
the first respondent obliged to have requested
clarity from the applicant; and (d) should the first respondent have
given the applicant
an opportunity to make representations prior to
any decision to disqualify its bid? It might not be necessary to
determine each
issue conclusively; a finding in favour of the
applicant regarding (b), above, could well decide the matter.
[14]
Furthermore, given the divergent approaches that have developed in
our jurisprudence in
relation to the meaning of an ‘acceptable
tender’, it is necessary to analyse this aspect more closely
within the context
of the present matter, notwithstanding that any
remarks made in this regard could well be
obiter dicta
.
[15]
An overview of the legal framework is set out below.
Legal
principles involved
[16]
For the sake of convenience, it is easier to deal separately with the
regulatory framework,
followed by the applicable case law.
Regulatory
framework
[17]
It is trite that public
procurement decisions, such as the appointment or disqualification of
a bidder, are examples of administrative
action.
[5]
They are subject to the just administrative action provisions
contained in section 33 of the Constitution.
[6]
In that regard, PAJA is the national legislation that was enacted to
give effect thereto, allowing a person to challenge administrative
action by means of the judicial review mechanism created in terms of
section 6. To do so successfully, a litigant must rely on
the review
grounds listed thereunder.
[18]
Public procurement itself
is further subject to section 217 of the Constitution. More
specifically, sub-section (1) stipulates that
when an organ of state
contracts for goods or services, it must do so in accordance with a
system that is fair, equitable, transparent,
competitive, and
cost-effective.
[7]
These are the
cardinal principles of the procurement of goods and services by South
African public entities.
[19]
The first respondent, as
a provincial department, is required to implement the above
principles in accordance with the provisions
of Public Finance
Management Act 1 of 1999 (‘PFMA’). The applicable system
of procurement is not found directly in
the above legislation but
appears in the Treasury Regulations thereto, under the heading of
supply chain management.
[8]
In
that regard, regulation 16A6.1 indicates that the procurement of
goods and services must be achieved through either a quotation
or a
bidding process; regulation 16A6.3 indicates that tender
documentation must include evaluation and adjudication criteria.
[20]
The Supply Chain Management Policy (‘SCMP’) of the first
respondent gives practical
effect to the statutory and regulatory
framework. The powers and functions of the first respondent’s
BEC are addressed under
paragraph 10.8.2. Of relevance to the present
matter is the following:
‘
If the bid
committee requires additional information from a specific bidder for
a sole purpose of seeking clarity, such communication
must be done in
writing with the prior approval by the Accounting Officer or
delegated official. Such communication must not provide
the relevant
bidder with the opportunity to supplement, enhance or amend
his/her/their bid.’
[9]
[21]
The evaluation of bids is addressed in terms of paragraph 10.8.3.2,
which stipulates that
bids must be evaluated according to the
criteria set by the bid specification committee and contained in the
tender documents.
To that end, paragraph 10.8.4 requires the BEC to
ensure that a bid complies ‘in all respects’ with such
criteria.
[22]
The dispute at the heart of the present matter is whether the
applicant’s bid satisfied
the criteria contained in the first
respondent’s tender documents. This must be decided with
reference to the definition
of an acceptable tender in terms of
section 1 of the PPPFA:
‘”
acceptable
tender”
means any tender which, in all respects, complies with the
specifications and conditions of tender as set out in the tender
document.’
[23]
Arising from this is the question whether it was
permissible, if not obligatory, for the BEC to have sought
clarity
from the applicant in circumstances where the information supplied
was unclear.
Case
law
[24]
The first respondent’s case is essentially that the applicant
failed to comply with the
eligibility requirements. It was not a bid
that complied in all respects with the specifications and conditions
of tender, as set
out in the tender documents.
[25]
There is, of course, a continuum of compliance. At the one extreme is
absolute compliance, i.e.
a meticulously prepared bid from a bidder
with an abundance of expertise and experience; at the other extreme
is absolute non-compliance,
i.e. a poorly prepared bid from a bidder
with no expertise or experience. Along the continuum, however, is a
range of partial compliance,
marked by increasing levels of
uncertainty. How would a procuring entity treat, for example, a bid
where the bidder had previously
completed a construction project to
the value of R 149,999,999 instead of the stipulated minimum of R
150,000,000? Where to draw
the line between adjacent points along the
continuum is not straightforward.
[26]
This was clearly recognised in
Metro
Projects CC and another v Klerksdorp Local Municipality and
others
,
[10]
where Conradie JA remarked:
‘
There are degrees
of compliance with any standard and it is notoriously difficult to
assess whether less than perfect compliance
falls on one side or the
other of the validity divide. Whether or not there can in any
particular case be said to have been compliance
with “the
specifications and conditions of tender” may not be an easy
question to answer.’
[11]
[27]
The question of what constitutes compliance is a vexing one and has
given rise to two broadly
divergent approaches in South African
public procurement law. The meaning of an ‘acceptable tender’
has been subjected
to either a strict approach,
[12]
on the one hand, or to a more flexible approach, on the other.
[28]
In
Chairperson:
Standing Tender Committee and others v JFE Sapela Electronics (Pty)
Ltd and others
,
[13]
Scott JA held as
follows:
[14]
‘
The definition of
“acceptable tender” in the Preferential 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”.
[15]
In other words, whether
“the tender in all respects complies with the specifications
and conditions of tender as set out in
the contract documents”
must be judged against these values.’
[29]
A few years later, in
Minister
of Social Development and others v Phoenix Cash & Carry-Pmb
CC
,
[16]
the Supreme Court of Appeal made certain general observations about
the circumstances that offended against the principles contained
in
section 217(1) of the Constitution. These remain pertinent. In that
regard, Heher JA commented as follows:
‘
(1)
a tender process which depends on uncertain criteria lends itself to
exclusion of meritorious
tenderers and is opposed to fairness among
tenderers, and between tenderers and the public body which supposedly
promotes the public
weal;
(2)
a process which lays undue emphasis on form at the expense of
substance facilitates corrupt
practice by providing an excuse for
avoiding the consideration of substance; it is inimical to fairness,
competitiveness and cost-effectiveness.
By purporting to distinguish
between tenderers on grounds of compliance or non-compliance with
formality, transparency in adjudication
becomes an artificial
criterion. In saying this I do not suggest that the tender board is
not entitled to prescribe formalities
which, if not complied with,
will render the bid invalid, provided both the prescripts and the
consequences are made clear. What
I am concerned to stress is the
need to appreciate the difference between formal shortcomings which
go to the heart of the process
and the elevation of matters of
subsidiary importance to a level which determines the fate of the
tender.’
[17]
[30]
Heher JA warned against the unwarranted elevation of form above
substance, which impeded the
effective application of the principles
of fairness, competitiveness and cost-effectiveness. It was important
to recognize the
materiality of the non-compliance in question.
[31]
Shortly afterwards, in
Millennium
Waste Management (Pty) Ltd v Chairperson Tender Board: Limpopo
Province and others
,
[18]
the Supreme Court of Appeal dealt with a tender committee’s
disqualification of a bid for non-compliance with a certain
administrative requirement, as it was termed. The bidder failed to
sign a form titled ‘declaration of interest’. Jafta
JA
found that the underlying regulations empowered the tender board to
accept bids even if they did not comply with the tender
requirements.
[19]
The learned
judge went on to observe that:
‘
Moreover, our law
permits condonation of non-compliance with peremptory requirements in
cases where condonation is not incompatible
with public interest and
if such condonation is granted by the body in whose benefit the
provision was enacted (
SA
Eagle Insurance Co Ltd v Bavuma
).
[20]
In this case condonation of the appellant’s failure to sign
would have served the public interest as it would have facilitated
competition among the tenderers. By condoning the failure the tender
committee would have promoted the values of fairness, competitiveness
and cost-effectiveness which are listed in section 217. The appellant
had tendered to provide the needed service at a cost of R
444 244,43
per month whereas the consortium had quoted and was awarded the
tender at the amount of R 3 642 257,28
per month.’
[21]
[32]
Jafta JA proceeded to address the meaning of an ‘acceptable
tender’, pointing out
that the definition provided in terms of
the PPPFA had to be construed within the context of section 217 of
the Constitution, in
its entirety. At the same time, it was
imperative to strive for an interpretation that promoted the spirit,
purport and objects
of the Bill of Rights, as required under section
39(2) of the Constitution.
[22]
Jafta JA held as follows:
‘
In this context
the definition of tender cannot be given its wide literal meaning. It
certainly cannot mean that a tender must comply
with conditions which
are immaterial, unreasonable or unconstitutional.’
[23]
[33]
The court went on to say that, in the determination of whether the
bidder’s non-compliance
rendered its bid unacceptable, regard
had to be had to the purpose of the declaration of interest in
relation to the tender process
itself. It was not evident how the
signing of the form would have safeguarded against corruption. What
was of importance was the
nature of the information furnished and not
the signature.
[24]
[34]
Several years later, in
Dr
JS Moroka Municipality and others v Betram (Pty) Ltd and another,
[25]
the Supreme Court of
Appeal reached a watershed in the determination of what constituted
an ‘acceptable tender’. The
court dealt with the crisp
issue of whether a municipality could disqualify a bid supported by a
copy of a tax clearance certificate
when the tender had required an
original document. The High Court previously held that an original
tax clearance certificate was
not a material requirement. Leach JA
disagreed, saying that it was for the municipality and not the court
to decide what should
be the prerequisites for a valid bid. A failure
to comply with prescribed conditions would result in the
disqualification of a
bid unless the conditions were immaterial,
unreasonable, or unconstitutional.
[26]
To the argument that the municipality ought to have been satisfied
with a copy of the tax clearance certificate and that the bidder’s
failure to have provided an original was something that could and
should have been condoned, Leach JA held:
[27]
‘
The immediate
difficulty I have with this argument relates to its underlying
premise that there existed a discretion to condone
a failure to
comply with any of the minimum qualifying requirements set out in the
tender invitation. The respondent was unable
to point to such a
discretion being afforded in any of the relevant legislation or
regulations, and, as Brand JA said in
Pepper
Bay
:
“
As a general
principle 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.”
[28]
[35]
The court found that the tender documents afforded no discretion to
the municipality. It could
not condone a failure to comply with the
prescribed minimum prerequisite of a valid and original tax clearance
certificate. The
bid was not an acceptable tender.
[29]
The court referred to the decision in
Millennium
Waste
but
seemed to reject the liberal approach adopted by Jafta JA. In that
regard, the court commented that insofar as the decision
might be
construed as accepting that a municipal functionary could condone a
failure to comply with a peremptory requirement of
a tender, if he or
she was of the view that it would be in the public interest to do so,
it should be regarded as incorrect.
[36]
The judgment has not escaped criticism.
[30]
It has, however, marked a
distinct break from the approach taken in
Millennium
Waste
and
earlier judgments.
[37]
The decision in
AllPay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency, and
Others
[31]
was handed down at the
same time as that in
Dr
JS Moroka
and
the contrasts are unmistakeable.
AllPay
has been described as a
move away from strict adherence to formalities and the ‘endorsement
of a more flexible context-sensitive
methodology’.
[32]
[38]
The Constitutional Court, in this regard, set out the proper legal
approach to irregularities
in a public procurement process. It held,
inter
alia
,
that the materiality of compliance with legal requirements depends on
the extent to which the purpose of such requirements is
achieved.
[33]
In an oft-quoted passage,
Froneman J dealt with materiality as follows:
‘…
Under the
Constitution there is no reason to conflate procedure and merit. The
proper approach is to establish, factually, whether
an irregularity
occurred. Then the irregularity must be legally evaluated to
determine whether it amounts to a ground of review
under PAJA. This
legal evaluation must, where appropriate, take into account the
materiality of any deviance from 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.
…
Assessing the
materiality of compliance with legal requirements in our
administrative law is, fortunately, an exercise unencumbered
by
excessive formality. It was not always so. Formal distinctions were
drawn between “mandatory” or “peremptory”
provisions on the one hand and “directory” ones on the
other, the former needing strict compliance on pain of non-validity,
and the latter only substantial compliance or even non-compliance.
That strict mechanical approach has been discarded. Although
a number
of factors need to be considered in this kind of enquiry, the central
element is to link the question of compliance to
the purpose of the
provision. In this court O’Regan J succinctly put the question
in
ACDP
v Electoral Commission
[34]
as being “whether
what the applicant did constituted compliance with the statutory
provisions viewed in the light of their
purpose”. This is not
the same as asking whether compliance with the provisions will lead
to a different result.’
[35]
[39]
The Constitutional Court was careful to confirm, however, that
compliance with the requirements
for a valid public procurement
process was still legally required.
[36]
Froneman J stated that:
‘
Once a particular
administrative process is prescribed by law, it is subject to the
norms of procedural fairness codified in PAJA.
Deviations from the
procedure will be assessed in terms of those norms of procedural
fairness. That does not mean that administrators
may never depart
from the system put in place or that deviations will necessarily
result in procedural unfairness. But it does
mean that, where
administrators depart from procedures, the basis for doing so will
have to be reasonable and justifiable, and
the process of change must
be procedurally fair.’
[37]
[40]
Notwithstanding the decision in
Millennium Waste,
and the
flexible and purposive approach taken by the Constitutional Court in
AllPay
, the Supreme Court of Appeal has not, in general,
departed from the strict approach adopted in
Dr JS Moroka
.
This is evident from several recent decisions.
[41]
In
Overstrand
Municipality v Water and Sanitation Services South Africa (Pty)
Ltd
,
[38]
the Supreme Court of Appeal considered a tender for the operation and
maintenance of water and sewerage infrastructure. The tender
stipulated certain minimum staffing requirements to ensure a water
supply ‘at the right quality and quantity, as well as
operations optimisation and asset preservation’.
[39]
The successful bid reflected a substantial shortfall in this regard.
The award was challenged. Navsa JA held as follows:
‘
I am alert to the
debate concerning the possible sufficiency of substantial or adequate
compliance with what, in conventional terms,
is described as
mandatory requirements. One should also guard against invalidating a
tender that contains minor deviations that
do not materially alter or
depart from the characteristics, terms, conditions and other
requirements set out in tender documents.
In the present case the
non-compliance is not of a trivial or minor nature. The tender by
Veolia was not an “acceptable”
one in terms of the
Procurement Act, in that it did not “in all respects”
comply with the specifications and conditions
set out in the
RFP.’
[40]
[42]
The successful bid, submitted by Veolia, reflected a substantial
shortfall in the number of process
controllers required for the
infrastructure in question. It is of some importance to note that the
minimum staffing requirements,
stipulated in the tender documents,
were derived from regulation 2834 of the repealed Water Act 54 of
1956 but survived in terms
of the
National Water Act 36 of 1998
. In
other words, the requirements were regulated.
[43]
In
WDR
Earthmoving Enterprises v The Joe Gqabi District Municipality
,
[41]
the Supreme Court of Appeal considered a tender in terms of which a
bidder was required to have submitted audited financial statements
for three financial years. The appellant, being a JV, failed to do so
for all its members.
[42]
Swain
JA held:
‘…
the
obligation to furnish audited annual financial statements is found in
the
Municipal Supply Chain Management Regulations. The
failure to
provide the requisite audited annual financial statements cannot
accordingly be regarded as trivial, or of a minor nature.
Likewise,
the requirement cannot be described as immaterial, unreasonable or
unconstitutional.’
[43]
[44]
As apparent from the facts of the case, the requirement in question
was regulated; the
Municipal Supply Chain Management Regulations
stipulated
the production of audited financial statements for the
past three years. No authority was available to the municipality to
condone
non-compliance.
[45]
The strict approach taken in
Dr
JS Moroka
continues
to influence public procurement jurisprudence. It runs like a thread
through numerous judgments of the High Court.
[44]
In that regard, Bolton has commented:
‘…
public
procurement regulation in South Africa [has moved] to a point where
procuring entities have very limited discretionary powers
when
evaluating compliance with tender conditions. They may exercise
discretion when evaluating compliance with tender conditions
only if
the tender conditions imposed were “immaterial, unreasonable or
unconstitutional” or if they reserved for themselves
discretion
in the tender invitation when evaluating compliance with tender
conditions.’
[45]
[46]
Bolton’s observations were made some ten years ago. The current
landscape of South African
public procurement law remains largely
unchanged. It is necessary to emphasise, however, that the
Constitutional Court has seen
no need, yet, to revisit the approach
adopted in
AllPay
.
The more flexible and context-sensitive methodology
[46]
demonstrated therein remains good law.
[47]
The regulatory framework and case law explored above comprise the set
of legal principles according
to which the present matter must be
assessed. This will be done in the discussion below.
Application
of principles to the facts
[48]
There are several aspects to be considered. These will be treated
under the sub-headings that
follow.
Availability
of an internal remedy
[49]
It was the first respondent’s argument that the applicant
failed to exhaust the available
internal remedy. The court could not
review the decision to disqualify its bid.
[47]
In this regard, the first respondent referred to the dispute
resolution mechanism in the Treasury Regulations, as well as
paragraph
20.1 of its SCMP.
[50]
Regulation 16A of the Treasury Regulations, dealing with supply chain
management, is silent in
relation to dispute resolution. Paragraph
20.1 of the SCMP provides as follows:
’
20.1
The Accounting Officer or delegated official will employ the content
of Provincial Treasury ECSCM Circular 23 of
2010/11: Complaints
Mechanism, which is a standard framework which allows for departments
to recommend remedial actions to be instituted
in cases of
non-compliance with the prescribed SCM norms and standards, including
criminal recourse in cases of corruption, fraud
or other criminal
offences.
20.2
Where an aggrieved party has declared a dispute during the
subsistence of a contract, such dispute must be
resolved through
conciliation, mediation and/or arbitration by invoking the
alternative dispute resolution mechanism to settle
disputes amicably
and reduces the need for formal proceedings.’
[51]
The exact contents of Circular 23 of 2010/11, mentioned in paragraph
20.1, are unknown. They
appear to address non-compliance by the first
respondent’s employees with the applicable norms and standards
rather than
serve as a dispute resolution mechanism for unhappy
bidders. Insofar as paragraph 20.2 is concerned, the envisaged
mechanism is
clearly intended for disputes that arise during the
subsistence of a contract and not during the evaluation and
adjudication stages
of the tender process.
[52]
The first respondent did not pursue the issue any further in
argument. Nothing more needs to
be said in that regard.
Compliance
with specifications and conditions of the tender
[53]
The starting point for the discussion at this stage is to reiterate
paragraph 10.8.4 of the first
respondent’s SCMP, which was
applicable to the tender. This stipulates that:
‘
[the BEC] shall
evaluate compliance with bid specifications and the bidder’s
ability to perform. Only bids that complied in
all respects will
proceed to the next phase.’
[48]
[54]
The text indicates that a bid had to comply ‘in all respects’
with the specifications
and conditions of the tender before it could
be evaluated further. No discretion was afforded to the BEC. Turning
to the tender
documents themselves, the notice and invitation to
tender provided that a bidder had to propose key personnel who met
the minimum
requirements contained in the section headed ‘T1.2
TENDER DATA’. This included a professionally registered CHSO
with
a minimum of five years’ experience on road projects. The
same requirement was repeated elsewhere.
[55]
Under T1.2 TENDER DATA, clause F2.1 addressed eligibility. In that
regard, F2.1.1 stated as follows:
‘
Tenderers must
submit a tender offer that complies in all aspects to the conditions
as detailed in this document. Only those tenders
that comply in all
aspects with the tender conditions, specifications, pricing
instructions and contract conditions will be declared
responsive.’
[56]
The minimum requirements for a bidder’s key personnel were set
out in more detail under
F2.1.4.4. It read:
‘
Key personnel
To be considered for a
Contract in terms of this Tender, the tenderer must have in its
employment or intend to employ, for the duration
of the contract, the
following key personnel who comply with the following minimum
requirements:
1. …
2. A
suitably qualified and experienced full time Construction Health and
Safety Officer(s) to manage the contractor’s
health and safety
obligations on site who:
i.
Is registered with SACPCMP as a Professional Construction
Health and
Safety Manager (Pr CHSM) or Professional Construction Health and
Safety Officer (Pr CHSO);
AND
ii.
has a minimum of five (5) years’ experience as a Construction
Health and Safety Officer on surfaced road construction projects.
A completed returnable
schedule E: TENDERER’S KEY PERSONNEL to be provided. Attach to
each schedule proof of indicated professional
registration with the
specified professional body.’
[57]
Inserted at the foot of F2.1.4.4 in bold text was the following:
‘
Failure to
comply with the requirements of this clause and applicable returnable
schedule will render the tender offer non-responsive.
’
[58]
This was emphasised later under F.3.13, which provided that a bid
would only be acceptable if
the conditions listed thereunder were
met. This included the stipulation, under sub-clause (n), that a
bidder had to meet the minimum
eligibility requirements specified in
terms of clause F2.1.
[59]
Consequently, the applicant proposed Ms Ndamase as its CHSO. It
submitted schedule E and included
the information depicted in the
table below:
[49]
Client
& project
name
Description
of
project
Project
end date
&
duration
Value
of
project
Position
held
SANRAL
Upgrade
of R63, sect 13, between Fort Beaufort and Alice
Current
R
714 m
Safety
Environmental Officer
SANRAL
Upgrade
of N2, sect 18, from Tetyana to Sithebe Komkhulu
Sept
2016- April 2019
R
645 m
‘’
[60]
In the top right corner of schedule E was the instruction, ‘See
enclosed CV’. The
applicant enclosed Ms Ndamase’s CV
summary thereafter, indicating that she had 19 years’
experience as a CHSO with
various construction companies and that her
engagement date with Rumdel (Pty) Ltd was 20 October 2016. A table
set out details
of her experience, from which the following
appears:
[50]
Company
name
Dates
employed
Position
of
employment
Major
contracts
Approx.
value
Brief
description
of
contract
Rumdel
Cape Construction
[51]
October
2016
Safety
Environmental Officer
N2
Tetyana site
R
488 million
Upgrading
of national route, N2, section 18, from Tetyana (KM24) to Sithebe
Komkhulu (KM41)
Rumdel
Cape Construction
2019-
2022
Safety
Environmental Officer
R61
R
214 million
Upgrading
of the road from R61 at St Barnabas Hospital to the Hluleka Nature
Reserve: 16 km
Rumdel
Cape Construction
2022-
present
Safety
Environmental Officer
R63
R
714 million
Upgrading
of R63 from Fort Beaufort to Alice
[61]
The first respondent contended that there were inconsistencies in the
information that Ms Ndamase
furnished. For example, schedule E
indicates that she worked on the upgrading of the N2 from Tetyana to
Sithebe Komkhulu from September
2016 until April 2019, whereas her CV
merely indicates October 2016; furthermore, the applicant indicated
in table A to schedule
D,
[52]
for similar projects completed, that the upgrading of the R61 from St
Barnabas Hospital to the Hluleka Nature Reserve had been
for a period
of 24 months, whereas Ms Ndamase’s CV indicated a period of
three years, i.e. ‘2019- 2022’. The
applicant disputed
this in reply. The relevant documents had to be considered together
in their entirety.
[62]
The court is inclined to agree with the applicant. As Govindjee J
found, when dealing with part
A of the application:
‘
Consideration of
“schedule E” together with the “CV summary”
prima
facie
supports
Zen JV’s submission that Ms Ndamase complied with the
stipulated five-year requirement. This is so even if a strict
interpretation is afforded to the discrepancy between “September
2016” and “October 2016”, so that the
later date is
utilised. That discrepancy certainly cannot, on its own, serve to
disqualify the entire bid.’
[53]
[63]
In keeping with the general approach to the interpretation of
documents, context and language
must be considered together, with
neither predominating over the other.
[54]
For purposes of complying with the conditions of the tender, the
applicant completed schedule E but amplified the information
contained therein by including Ms Ndamase’s CV. There was no
condition that prevented the applicant from doing so. It cannot
be
denied that the information would have given rise to a certain amount
of ambiguity but, at worst for the applicant, a reasonable
interpretation of the relevant documents reveals that the stipulated
minimum of five years’ (or 60 months’) experience
for a
bidder’s proposed CHSO was indeed satisfied, if not exceeded.
This can be seen from the rudimentary table below:
Project
description
Duration
Total
Upgrading
of N2, Tetyana to Sithebe Komkhulu
October
2016- April 2019
[55]
30
months
Upgrading
of R61 from St Barnabas Hospital to Hluleka Nature Reserve
2020-
2022
[56]
24
months
Upgrading
of R63 from Fort Beaufort to Alice
2022-
present
[57]
18
months
Grand
total
72
months
[58]
[64]
It was also the first respondent’s contention that the
applicant failed to set out Ms Ndamase’s
experience with the
required particularity. The format of schedule E required a bidder to
stipulate project end dates and duration;
the applicant merely
stipulated ‘current’ in relation to the upgrading of the
R63 from Fort Beaufort to Alice, while
Ms Ndamase’s CV
stipulated ‘2022- present’. The applicant, said the first
respondent, was supposed to have specified
the applicable dates by
month and year.
[65]
The tender documents do not support the first respondent’s
argument. All that was required
was for a bidder to provide a
‘completed returnable schedule E’; no condition stated
that a bidder was required to
set out the relevant dates by month and
year. Whereas the format of schedule E facilitated the calculation of
the required experience,
the tender documents did not indicate that a
bidder was expected to complete the table precisely in accordance
therewith.
[66]
In
Premier
of the Free State Provincial Government and others v Firechem Free
State (Pty) Ltd
,
[59]
Schutz JA held that one of the requirements for a credible tender
procedure is that:
‘
a tender should
speak for itself. Its real import may not be tucked away, apart from
its terms.’
[60]
[67]
If the first respondent had intended the specification of experience
in such detail to comprise
a condition of the tender, then it was
imperative for it to have said so. This cannot simply be assumed. In
Tekoa
Consulting Engineers (Pty) Ltd v Alfred Nzo District
Municipality
,
[61]
the court stated:
‘
The conditions of
tender must spell out, clearly and unambiguously, what is required of
a bidder. There must be no vagueness or
lack of clarity about what
constitute the “rules of the game”, so to speak.’
[62]
[68]
On a reasonable interpretation of schedule E and Ms Ndamase’s
CV, there can be no hesitation
in stating that she met the
requirement of five years. The issue of non-compliance simply does
not arise. The decision to disqualify
the applicant’s bid was
not rationally connected to the information before the BEC,
[63]
alternatively it was so
unreasonable that no reasonable person could have made it.
[64]
Consequently, the
applicant has established the necessary grounds upon which the
decision can be reviewed.
[69]
The court is satisfied that the applicant’s bid, insofar as it
pertained to the stipulated
eligibility requirements for a CHSO,
complied in all respects. The first respondent’s
disqualification thereof was unlawful.
Purposive
approach to determination of an acceptable tender
[70]
The court has already found that the disqualification of the
applicant’s bid was unlawful.
It might be helpful, however, to
examine the present matter further in light of the divergent
jurisprudential approaches that have
emerged in relation to the
meaning of an ‘acceptable tender’.
[71]
The tender in the present matter involves the supply of goods and
services of a considerable
magnitude. The construction of a
20-kilometre stretch of tarred road will require a large work force,
as well as reliance on heavy-duty
construction machinery and
equipment. The risk of an injury is not insignificant. Consequently,
it is understandable why the first
respondent stipulated eligibility
requirements for key personnel such as the CHSO. It was not apparent,
however, why the first
respondent distinguished between experience on
surfaced road projects and experience on other projects, e.g. the
construction of
low-cost housing or schools or water treatment works.
The demands made on a CHSO’s expertise in the various scenarios
described
above are unlikely to be remarkably different. The
distinction appears to have been made arbitrarily.
[72]
The applicant proposed Ms Ndamase, who was a CHSO with 19 years’
experience at the time
of the closing date for the tender. If a
flexible and purposive approach was adopted by the BEC, in terms of
which the question
whether the applicant’s bid was an
acceptable tender was construed and adjudicated in accordance with
the principles contained
in section 217(1) of the Constitution, then
an immaterial shortfall in Ms Ndamase’s experience as a CHSO on
surfaced road
projects should not, on its own, have justified
disqualification. However, from a reading of the case law as it
stands, three important
conditions must be recognised before a
purposive approach could have been adopted: (a) the eligibility
requirements for the tender
must not have been immaterial,
unreasonable, or unconstitutional;
[65]
(b) the tender documents must have granted a discretion to the first
respondent when evaluating compliance;
[66]
and (c) the eligibility
requirements were not to have been statutorily derived.
[67]
[73]
If the above conditions had been present, then the R 36 million price
difference between the
applicant’s bid and that of the third
respondent should also have militated against disqualification. The
principles of competitiveness
and cost-effectiveness ought not to be
sacrificed too easily on the altar of disqualification to the gods of
strict compliance.
[74]
In
Afrirent
Fleet (Pty) Ltd v Moqhaka Local Municipality and another
,
[68]
the court warned against
ignoring the relevance of the above principles. Cronjé AJ
remarked,
obiter
dicta
,
that:
‘
The matter before
us raises the important issue that government may, compared with
other tenderers who may have lower B-BBEE points,
pay much higher
amounts for the same services when costs are not carefully
considered. The constitutional values of competitiveness
and cost
efficiency should always be considered. This municipality may pay in
excess of R 12 million more for the same service
just on a points
difference. I take no issue with the point system but this is an
aspect that needs further consideration in public
procurement.’
[69]
[75]
Similar remarks could be made in the context of the present matter.
The decision to disqualify
the applicant’s bid came at a cost
of R 36 million; in a developing nation such as ours, with limited
resources, this is
a price that we can ill afford. At some point,
common sense must prevail. In time, the right case with the right
facts might warrant
a closer look at a more flexible and purposive
approach to the determination of an ‘acceptable tender’.
Request
for clarity
[76]
The circumstances under which the decision was made invite the
question why the BEC did not ultimately
seek clarity from the
applicant. From the papers, it is evident that the BEC indeed
prepared a letter, requesting clarity regarding
Ms Ndamase’s
experience on the project for the upgrading of the N2, from Tetyana
to Sithebe Komkhulu. This was never approved
by the Director: Supply
Chain Management. The applicant argued that Mr Hani’s failure
to approve the request also constituted
one of the review grounds
already mentioned; alternatively, if he was not authorised to do so
by the empowering provision,
[70]
i.e. paragraph 10.8.2 of the first respondent’s SCMP, then this
was a further ground upon which the applicant based its challenge.
Considering the findings reached earlier, it is unnecessary to
explore the argument further. Nevertheless, the observation can
be
made that a simple request for clarity about the nature of Ms
Ndamase’s experience could have avoided the disqualification
of
the bid and the ensuing litigation, provided that the BEC never
presented the applicant with an opportunity to supplement, enhance,
or amend its bid.
[77]
In
Logbro
Properties CC v Bedderson NO and others
,
[71]
Cameron JA referred to a public entity’s ever-flexible duty to
act fairly in relation to the implementation of a tender process.
[72]
Similarly, in
Metro
Projects CC and another v Klerksdorp Local Municipality and
others
,
[73]
Conradie JA referred to
Logbro
and held that:
‘
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.’
[74]
[78]
Any reliance placed on a request for clarity, such as ought to have
been done in the present
matter, must be done fairly. When properly
implemented, it can be a significant factor in decreasing the level
of uncertainty along
the continuum of compliance described earlier.
The procuring entity must, however, do so in a way that does not
contravene the
principles listed in section 217(1) of the
Constitution.
Opportunity
to make representations
[79]
The applicant contended that the first respondent failed to give it a
reasonable opportunity
to make representations prior to the decision
to disqualify its bid. If this had been done, then the applicant
would have provided
the clarity that had been sought.
[80]
Section 3(2) of PAJA indicates that the right to procedurally fair
administrative action includes
a reasonable opportunity to make
representations.
[75]
Whereas
the case law to which the applicant referred seems to support its
contentions,
[76]
it is not
clear how feasible it would be for the first respondent to make such
opportunity available to all bidders whose bids
fell to be
disqualified in similar circumstances. Certainly, in relation to a
tender that attracted multiple bidders, for a procuring
entity to
arrange a hearing for each bidder prior to taking a decision to
disqualify would not be a sensible use of administrative
capacity or
resources.
[81]
Section 3(4) permits an administrator to depart from the requirements
mentioned in section 3(2)
if it is reasonable and justifiable to do
so. The administrator must, however, consider all relevant factors,
including,
inter alia
, the urgency of the matter, as well as
the need to promote an efficient administration and good governance.
Within the context
of a tender process, where the supply of goods and
services to the procuring entity or an affected community is often
time-sensitive,
it appears that it would be permissible for a
procuring entity to dispense with a hearing, provided that a bidder
was afforded
a reasonable opportunity to make representations by
other means, e.g. written submissions. In a situation where the
procuring entity
was uncertain about the bidder’s compliance
with a specification or condition of the tender, as was the case
here, a request
for clarity would have satisfied the requirements for
procedurally fair administrative action, as envisaged under section
3(2),
read with section 3(4) of PAJA. Mindful of the court’s
findings regarding compliance, however, it is unnecessary to
investigate
this aspect further.
Relief
and order
[82]
The applicant has demonstrated that there was no internal remedy
available prior to its institution
of these proceedings. It has also
demonstrated that its bid complied in all respects with the
specifications and conditions of
the tender; this is so irrespective
of whether a strict or a purposive approach is adopted in relation to
the meaning of an ‘acceptable
tender’. Consequently, the
court is persuaded that the applicant has successfully established
one or more grounds under section
6(2) of PAJA upon which the first
respondent’s decision to disqualify the applicant’s bid
can be reviewed and set aside.
[83]
Notwithstanding the above findings, the court is also satisfied that
the first respondent ought
to have requested clarity from the
applicant before making its decision. There is merit, too, in the
applicant’s contention
that the right to procedurally fair
administrative action entailed, in these circumstances, the
opportunity to make representations.
The court is of the view that
the first respondent’s request for clarity would have met the
requirements of section 3(2),
read with section 3(4), of PAJA.
[84]
The first respondent’s decision to disqualify the applicant’s
bid was unlawful. The
applicant did not, ultimately, seek a
substitution of the decision; it merely sought the remittal of the
matter back to the BEC.
This is, to quote Heher JA in
Gauteng
Gambling Board v Silverstar Development Ltd
,
[77]
almost always the prudent and proper course.
[85]
The parties never addressed directly, in argument, the remainder of
the relief sought. No basis
was presented for the review and setting
aside of any agreements concluded between the first and third
respondents and arising
from the award. It hardly needs stating,
however, that an agreement concluded on the premise that the first
respondent lawfully
awarded the tender to the third respondent would
be invalid and would be of no force or effect. The applicant’s
prayer for
alternative relief suffices for the appropriate order to
be made in that regard.
[86]
The only remaining issue for determination is that of costs. The
applicant, as the successful
party in these proceedings, is entitled
to the recovery of its expenses; the general rule must be applied.
Mindful of the complexity
and importance of the matter, entailing the
evaluation of a multi-million Rand tender with significant
consequences for the parties
involved, as well as the communities
dependent on the road in question, the court sees no reason why not
to award the costs of
junior and senior counsel. It would be
reasonable to award such costs on Scales B and C, respectively.
[87]
In the circumstances, the following order is made:
(a) the first
respondent’s decision to disqualify the applicant’s bid
and its decision not to award to the applicant
the tender for the
appointment of a civil engineering contractor for the upgrading of
road DR08034 from the N2 to the R61 via Clarkebury
(20 km) Phase 1,
under tender number SCMU10-23/24-0001, and its decision to award the
tender to the third respondent, are hereby
reviewed and set aside;
(b) any agreements
concluded between the first and third respondent because of the award
of the tender are hereby declared
invalid and set aside;
(c) the matter is
hereby referred to the first respondent for adjudication of the
tender
de novo
; and
(d) the first
respondent is ordered to pay the costs of the review, including the
costs of two counsel on Scales B and C respectively.
JGA
LAING
JUDGE
OF THE HIGH COURT
APPEARANCES
For
the applicant:
Adv
De la Harpe SC with Adv Watt
Instructed
by:
Drake
Flemmer & Orsmond Inc.
c/o
De Jager Lordan
2
Allen Street
Makhanda
Email:
Stuart@djlaw.co.za
Ref:
S Tarr/cb/R257/2005
For
the respondents:
Adv
Ntsepe
Instructed
by:
State
Attorney
29
Western Road
Central
GQEBERHA
Email:
MSisilana@justice.gov.za
(Ref:
1597/2023/T)
Date
of hearing:
01
August 2024.
Date
of delivery of judgment:
27
August 2024.
[1]
The
JV consisted of two members: Rumdel (Pty) Ltd and Lik’themba
Building and Construction CC. Both entities are based in
East
London.
[2]
The specific goals and the points that can be allocated are those
envisaged under
section 2(1)
of the
Preferential Procurement Policy
Framework Act 5 of 2000
. These include contracting with persons or
categories of persons who have been historically disadvantaged by
unfair discrimination
because of race, gender, or disability.
[3]
The combined scores for price and specific goals, as calculated by
the applicant, totalled 100 points. This was the maximum that
could
be achieved.
[4]
Rumdel
(Pty) Ltd is one of the members of the JV. See n 1 above.
[5]
In
Logbro
Properties CC v Bedderson NO and others
2003
(2) SA 460
(SCA), Cameron JA remarked, at paragraph [5], that this
was obvious; the Supreme Court of Appeal had consistently applied
the
Constitution’s administrative justice provisions to
government tender processes. See
Umfolozi
Transport (Edms) Bpk v Minister van Vervoer en Andere
[1997] ZASCA 8
;
[1997]
2 All SA 548
(SCA), at 552-3;
Transnet
Ltd v Goodman Brothers (Pty) Ltd
[2000] ZASCA 151
;
2001
(1) SA 853
(SCA), at 870; and
Olitzki
Property Holdings v State Tender Board and Another
2001
(3) SA 1247
(SCA), at paragraph [33].
[6]
Section
33(1) of the Constitution provides that everyone has the right to
administrative action that is lawful, reasonable, and
procedurally
fair.
[7]
Section
217(2) permits an organ of state to implement a procurement policy
providing for categories of preference in the allocation
of
contracts, and the protection or advancement of persons, or
categories of persons, disadvantaged by unfair discrimination.
Section 217(3) requires national legislation to prescribe a
framework within which the above policy must be implemented. The
PPPFA is the legislation in question.
[8]
GNR
225 of 15 March 2005.
[9]
Sic.
At
sub-paragraph v.
[10]
[2004]
1 All SA 504 (SCA).
[11]
At
paragraph [15].
[12]
Some
might say the strict approach is formalistic in nature. See n 30
below.
[13]
[2005]
4 All SA 487 (SCA).
[14]
At
paragraph [14].
[15]
Sic.
It is most probable that the term ‘cost-effective’ was
intended, as used in section 217(1) of the Constitution.
[16]
[2007]
3 All SA 115
(SCA).
[17]
At
paragraph [2].
[18]
[2008]
2 All SA 145 (SCA).
[19]
At
paragraph [16].
[20]
1985
(3) SA 42
(AD), at 49G-H.
[21]
Millennium
Waste
,
at paragraph [17].
[22]
At
paragraph [18].
[23]
At
paragraph [19].
[24]
At
paragraph [20].
[25]
[2014]
1 All SA 545 (SCA).
[26]
At
paragraph [10].
[27]
At
paragraph [12].
[28]
Minister
of Environmental Affairs and Tourism and another v Pepper Bay
Fishing (Pty) Ltd; Minister of Environmental Affairs and
Tourism and
another v Smith
[2003]
4 All SA 1
(SCA). In this matter, the court dealt with an
application for fishing rights, made under
section 18
of the
Marine
Living Resources Act 18 of 1998
. A senior official rejected the
application for want of compliance with the procedural requirements
contained in a General Notice
made in terms of the legislation in
question. Brand JA held that the official’s powers were
derived from the enactment
constituted by the General Notice; if the
General Notice did not confer power to the official to condone
defects in the application,
then he had none. At paragraphs [31] to
[35].
[29]
Dr
JS Moroka
,
at paragraph [16]. It is not apparent from the judgment that the
provision of an original tax clearance certificate was a legislative
requirement.
[30]
The overall reasoning of the court has been described as
‘problematic’. See Bolton ‘Disqualification for
non-compliance with public tender conditions’
PER/PELJ
2014(17)6, at 2340. It
has also been referred to as ‘a retreat into formalism’.
See Volmink ‘Legal consequences
of non-compliance with bid
requirements’ (2014) 1
APPLJ
41, at 54. More
recently, the decision was criticised for being
a
‘notoriously formalistic judgment’. In this regard, see
Kohn ‘Time to go back to first principles: a critical
analysis
of the 2017 Procurement Regulations reveals them to be short of the
legality-cum-rationality mark’ (2019) 6
APPLJ
1, at
28.
[31]
2014
(1) SA 604 (CC).
[32]
Kohn,
n 30 above, at 29. The learned writer comments that the methodology
essentially entails an assessment of the materiality
of the
non-compliance, as informed by the purpose of the condition or
requirement.
[33]
AllPay
,
a
t
paragraph [22].
[34]
[2006] ZACC 1
;
2006
(3) SA 305
(CC), at paragraph [25].
[35]
AllPay
,
at paragraphs [28] and [30]. See, too, the Constitutional Court’s
confirmation, in paragraph [58], that the materiality
of
irregularities is determined chiefly by assessing whether the
purposes of the tender requirements have been ‘substantively
achieved’.
[36]
This is a well-established principle. In
Steenkamp
NO v Provincial Tender Board, Eastern Cape
2007
(3) SA 121
(CC), Moseneke DCJ reiterated, at paragraph [60], that a
procurement process ‘compels strict and equal compliance by
all
competing tenderers on the closing day for the submission of
tenders.’ More recently, in
Westinghouse
Electric Belgium Société Anonyme v Eskom Holdings
(SOC) Ltd and another
[2016]
1 All SA 483
(SCA), Lewis JA held, at paragraph [43], that ‘the
tender invitation, which sets out the evaluation criteria, together
with the constitutional and legislative procurement provisions,
constitute the legally binding framework within which tenders have
to be submitted, evaluated and awarded.’ The learned judge
emphasised that there was no room for departure from these.
[37]
AllPay
,
at paragraph [40].
[38]
[2018]
2 All SA 644 (SCA).
[39]
At
paragraph [45].
[40]
At
paragraph [50].
[41]
2018
JDR 1295 (SCA).
[42]
Its
first member did so; its second member, however, submitted audited
financial statements for only two financial years, including
interim
financial statements for a portion of the third financial year.
[43]
At
paragraph [34].
[44]
See
Mobile
Telephone Networks (Pty) Ltd v Transnet Soc Ltd
[2018]
ZAGPJHC 454 (18 June 2018);
Amandla
GCF Construction CC v Municipal Manager, Saldanha Bay Municipality
2018
(6) SA 63
(WCC);
DDP
(Pty) Ltd v Rustenburg Local Municipality
[2019]
ZANWHC 11
(28 February 2019); and
WBHO
v Nelson Mandela University
[2019]
ZAECPEHC 68 (1 October 2019). The cases are mentioned in Hoexter and
Penfold,
Administrative
Law in South Africa
(Juta,
3ed 2021), at 411 n 400. See, too, most recently,
Afrirent
Fleet (Pty) Ltd v Moqhaka Local Municipality and another
[2024]
1 All SA 85
(FB); and
Marothodi
Metsi (Pty) Ltd v Uthukela District Municipality and others
[2024]
2 All SA 433 (KZP).
[45]
Bolton,
n 30 above, at 2347. The learned writer adds that ‘this is an
unfortunate state of affairs’.
[46]
Kohn,
n 30 above.
[47]
The
argument is based on the provisions of section 7(2) of PAJA.
[48]
Sic.
[49]
Only
the relevant columns and rows are reflected.
[50]
Only the relevant information has been included.
[51]
The
applicant indicated in its founding affidavit that one of its
members, Rumdel (Pty) Ltd, was previously registered under the
name
of Rumdel Construction (Cape) (Pty) Ltd.
[52]
The
table appears under section D, requiring a bidder to list similar
projects completed.
[53]
Zen
JV v Department of Transport: Province of the Eastern Cape and
Others
(4495/2023)
[2023] ZAECMKHC 140 (28 December 2023), at paragraph [25].
[54]
Natal
Joint Municipal Pension Fund v
Endumeni
Municipality
[2012]
2 All SA 262
(SCA), at paragraph [19].
[55]
The
later commencement date has been used, i.e. October 2016 instead of
September 2016, considering Ms Ndamase’s date of
engagement
with Rumdel (Pty) Ltd. The first respondent’s calculation of
11 days, based on the period from the date of engagement
until the
end of the month, i.e. 20- 31 October 2016, is entirely unlikely and
simply untenable when schedule E and the CV are
read together.
[56]
The
lesser period of 24 months has been used, as set out by the
applicant in table A to schedule D.
[57]
The
reference to ‘present’ has been interpreted as the date
upon which the bid was submitted, i.e. 27 June 2023. The
first
respondent accepted a period of 18 months for purposes of the
calculations in its supplemented answering papers.
[58]
The applicant contended in reply that the period was either
six-and-a-half or five-and-a-half years, depending on the period
allocated to the upgrading of the R61 from St Barnabas Hospital to
the Hluleka Nature Reserve. This seems to be premised on the
understanding that the upgrading of the R63 from Fort Beaufort to
Alice involved a period of 12 months; the first respondent,
in
contrast, accepted a period of 18 months; see n 57 above.
[59]
[2000] 3 All SA 247 (A).
[60]
At paragraph [30].
[61]
[2022]
3 All SA 892 (ECG).
[62]
At
paragraph [57].
[63]
Section
6(2)(f)(ii)(cc) of PAJA.
[64]
Section
6(2)(h).
[65]
Considering
the nature of the project, the eligibility requirements cannot be
described as such.
[66]
They did not. Discretion could have been granted, possibly, by
stipulating at the foot of clause F2.1.4.4 that a failure to comply
with the eligibility requirements
might
render the tender offer
non-responsive.
This
could have created the necessary authority.
[67]
Importantly,
if the eligibility requirements were indeed required by statute or
otherwise regulated as such, then the principle
of legality would
have prevented any attempt on the part of the first respondent to
condone non-compliance in the absence of
an empowering legislative
provision. This was the underlying principle that operated in both
Pepper
Bay
and
Dr
JS Moroka
.
[68]
[2024]
1 All SA 85 (FB).
[69]
At
paragraph [73].
[70]
Section 6(2)(a)(i).
[71]
[2003] 1 All SA 424 (SCA).
[72]
At
paragraph [8].
[73]
[2004] 1 All SA 504
(SCA).
[74]
At
paragraph [13].
[75]
Section
3(2)(b)(ii).
[76]
See
Logbro
,
at paragraph [8];
Metro
Projects CC
,
at paragraph [13]; and
Thebe
Healthcare v NBC, Road Freight Industry
2009
(3) SA 187
(WLD), at paragraphs [26] to [30].
[77]
2005
(4) SA 67
(SCA), at paragraph [29].