IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case number: 5729/2023
In the matter between:
CONTOUR TECHNOLOGY (PTY) LTD Applicant
and
THEEWATERSKLOOF MUNICIPALITY First Respondent
UTILITIES WORLD (PTY) LTD Second Respondent
Bench: Sidaki, T.S. AJ
Heard: 7 & 19 June 2024
Delivered: 23 October 2024
This judgment was handed down electronically by circulation to the parties'
representatives via email and release to SAFLII. The date and time for ha nd-down is
deemed to be 10h00 on Wednesday, 23 October 2024.
JUDGMENT
SIDAKI, AJ
Introduction
1. This matter concerns a review of a tender awarded by the first respondent
(the Municipality) to the second respondent (Utilities), for the provision and
administration of the electricity prepayment vending system.
2. The applicant (Contour) applied in its notice of motion for the following relief:
“… an order that:
2.1. the decision taken by the first respondent to award Tender FIN
03/2022/23 for the provision and administration of electricity
prepayment uniform vending system for the period 1 July 2022 until
30 June 2025 (the tender), to the second respondent , is reviewed
and set aside.
2.2. a substitution order is granted in terms of which the tender is
awarded to the applicant.
2.3. the first respondent pays the costs of the application, alternatively,
that the first and second respondent pay the costs jointly and
severally should the latter oppose the review.
2.4. further and/or alternative relief.”
3. The Municipality advertised the tender on 8 April 2022 , with the ‘tender
notice and invitation to tender’ document (tender notice), providing, inter alia,
that:
3.1. “Only tenderers who satisfy the eligibility criteria stated in the Tender
Conditions and Tender Data (were) eligible to submit tenders”.
3.2. “All bids received shall be evaluated in terms of the Theewaterskloof
Municipality Supply Chain Management Policy, read w ith the
Preferential Procurement Regulations of 2017. It is estimated that
the 80/20 preference points system will be applicable. Tenders will
be evaluated in terms of price and preference.”
3.3. “Council reserves the right to accept a tender in full, partially or not at
all and is not obliged to accept the lowest tender received.”
4. A compulsory clarification meeting hosted by the Municipality for prospective
bidders was held on 21 April 2022. The closing date for the tender was 29
April 2022. Thereafter, the tender evaluation process unfolded.
5. The Bid Evaluation Committee (BEC) prepared a bid evaluation report (BEC
Report/ Report), in which it set out its working process and recommended
the award of the tender to Utilities. The BEC adopted the Report at its
meeting held on 22 September 2022. Th at R eport was tabled for
consideration by the Bid Adjudication Committee (BAC) at its meeting held
on 23 September 2022 . T he BAC, at the recommendation of the BEC,
resolved to award the tender to Utilities.
6. The Municipality communicated the BAC resolution to Utilities by letter dated
10 October 2022. On that day the Municipality also wrote to Contour,
advising it that its bid had been unsuccessful.
7. Contour lodged an internal appeal against the award of the tender to Utilities.
The calculation and award of B -BBEE points in the tender evaluation
process formed one of the grounds of appeal. The appeal was dismissed.
8. The Municipality communicated the dismissal of the appeal to Contour by
letter dated 24 October 2022 . I note that the Municipality’s Appeal Authority
did not deal with the issues raised as the grounds of appeal in its response.
9. Thereafter, Contour sought access to Utilities’ bid documents, first by
sending a request and later under the auspices of the Promotion of Access
to Information Act 2 of 2000 (PAIA). The Municipality provided some of
Utilities’ bid documents, including its B -BBEE sworn affidavit and an ISO
9001:15 certificate.
10. Contour subsequently instituted this review application.
Grounds of review
11. The first ground of review concerns compliance with the requirements for
Broad-Based Black Economic Empowerment (B -BBEE) status. Contour
asserts that the sworn statement that was produced to prove Utilities’ B-
BBEE status was invalid . As such, the Municipality ought not to have
awarded any preference points for B -BBEE status level of contribution to
Utilities.
12. The second ground concerns an alleged failure by Utilities to submit a valid
ISO certificate 9001: 2015 in Quality Management Systems the necessary
certification for its Revenue Collection and Management Tamper Systems.
13. Once the rule 53 record was produced, the applicant supplemented its
grounds of review to include that : (a) the perce ntage of sub -contracting
services (the online vending software tendered by Utilities which generates
the prepaid electricity tokens ) was above the allowed threshold of 25%; (b)
Utilities’ certificate of independent bid determination was defective; (c)
compliance issues such as , (i) a failure to attach proof of public liability
insurance, (ii) a defect concerning the signatory to Utilities’ bid document, (iii)
a defect in the Utilities’ board resolution authorising the appointed signatory
to sign all documents in connection with the bid.
14. The applicant seeks a review in terms of the Promotion of Administrative
Justice Act 3 of 2000 (“PAJA”).
Legal framework
15. Section 217 (3) of the Constitution refers to the national framework within
which organs of state must implement their procurement policy. It provides:
“217. Procurement
1. 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.
2. Subsection (1) does not prevent the organs of state or institutions
referred to in that subsection from implementing a procurement
policy providing for
a. categories of preference in the allocation of contracts; and
b. the protection or advancement of persons, or categories of
persons, disadvantaged by unfair discrimination.
3. National legislation must prescribe a framework within which the
policy referred to in subsection (2) must be implemented.”
16. The national legislation prescribing the framework within which procurement
policy must be implemented is the Preferential Procurement Policy
Framework Act 5 of 2000 (Procurement Act),1 and the regulations published
thereunder.2 The Broad -Based Black Empowerment Act 53 of 2003 (B -
BBEE Act) is also relevant in this case.
17. In Steenkamp Moseneke DCJ (as he then was) stated:
1 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South
African Social Security Agency and Others (CCT 48/13) [2013] ZACC 42; 2014 (1) SA 604 (CC); 2014
(1) BCLR 1 (CC) (29 November 2013) (Allpay), at para 33.
2 Preferential Procurement Regulations, 2017.
“Section 217 of the Constitution is the source of the powers and
function of a government tender board. It lays down that an organ of
state in any of the three spheres of government, if authorised by law
may contract for goods and services on behalf of government.
However, the tendering system it devises must be fai r, equitable,
transparent, competitive and cost -effective. This requirement must be
understood together with the constitutional precepts on administrative
justice in section 33 and the basic values governing public
administration in section 195(1).”3
18. The proper approach in review applications of this nature was enunciated in
Allpay:
“[28] 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 c ompliance to the purpose of the provision, before
concluding that a review ground under PAJA has been established.4
Relevant terms and conditions and bid specifications
19. The invitation to bid form included the following requirement:
“B-BBEE status level verification certificate/sworn affidavit (for EMES &
QSEs) must be submitted in order to qualify for preference points for B-
BBEE.”
20. One of the relevant terms and conditions for bidding read:
3 Steenkamp NO v Provincial Tender Board of the Eastern Cape (CCT71/05) [2006] ZACC 16; 2007
(3) SA 121 (CC); 2007 (3) BCLR 300 (CC) (28 September 2006) (Steenkamp) at para 33.
4 Allpay at para 28.
“This bid is subject to the Preferential Policy Framework A ct and the
Preferential Procurement Regulations, 2017, the General Conditions of
Contract and, if applicable, any other special conditions of contract.”
21. When testing for administrative compliance , tenders would be found non -
compliant (albeit these documents may be requested from the tenderer ) if,
inter alia:
21.1. the tenderer has failed to submit a certified valid B -BBEE certificate,
QSE or EME affidavit, whereas where points were claimed and a
copy of the certificate or affidavit was supplied, a certif ied valid copy
of the B-BBEE certificate, QSE or EME affidavit may be requested.
21.2. the tenderer has failed to submit a valid ISO 9001:2015 certificate in
Quality Management Systems, in respect of the provision of
Revenue Collection, Tamper Management.
22. The 80 /20 preference point system would be used, in terms of which a
maximum of 80 points is allocated for price, calculated in accordance with a
set formula, and the remaining 20 p oints is awarded for B -BBEE status level
of contribution. B-BBEE points are allocated on a sliding scale depending on
status level of contribut ion, where Level 1 receives 20 points, Level 2
receives 18 points and non-compliant contributor receives 0 points.
23. A person awarded a contract may not sub -contract more than 25% of the
value of the contract to any other enterprise that does not have an equal or
higher B-BBEE status level that the person concerned, unless the contract is
sub-contracted to an EME that has the capability and ability to execute the
sub-contract.
BEC Report
24. The BEC Report is the key document in which the details of the assessment
of the bidders are recorded. Its recommendation formed the basis of the
BAC’s resolution to award the tender to Utilities.
25. Seven tenders (including those of Contour and Utilities) were received at
close of the bidding process. The procedure for the evaluation of the tenders
involved four steps: step 1- test for eligibility; step 2- test for responsiveness;
step 3- test for administrative compliance ; step 4 - scoring of financial offer,
evaluation of points for preferencing and calculating total tender evaluation
points to the lowest, ranking tender offers from the highest number of tender
evaluation points to the lowest, recommending tenderer with the highest
number of tender evaluation po ints for the award of the contract, unless
there are compelling and justifiable reasons not to do so.
26. Table 3 of the Report set s out the criteria considered in the test for eligibility
of the bidders . These were listed as, ‘paid the tender participation fe e
payment’; ‘STS Association certificate’; ‘complies with pricing instruction’;
‘attended compulsory clarification meeting’; ‘ISO Certificate’; ‘references’.
The BEC concluded that all bidders met the test for eligibility and accordingly
were eligible to proceed to the next stages of the evaluation process.
27. Quite what mechanism was used by the BEC to assess the validity of any of
the ISO Certificates is unclear to me. The Municipality’s answering affidavit
says, “the BEC was satisfied that the second respondent, by submission of
its ISO certificate, had fulfilled the requirement of submitting an ISO
certificate, that demonstrates its ability to measure internal process controls
related to quality and the measuring of client satisfaction”.
28. The test for responsiveness in Step 2 of t he evaluation process involved
criteria such as, ‘signed and completed form of offer’; ‘compliance with
eligibility’; ‘compliance with the specifications’; ‘compliance with the special
conditions of contract’; ‘com pliance with point 1 of additional conditions of
tender’.
29. The outcome of this section of the evaluation was recorded in Table 4 of the
Report, which stated that all bidders were found to be responsive for further
evaluation.
30. As regards the test for adminis trative compliance in Step 3, it is stated that
tenders will be found to be non-compliant if, inter alia: the tenderer has failed
to complete and sign and attach requested information to all schedules not
excluded in the responsiveness criteria; the tender er has failed to submit a
municipal account of where the head office of the company is registered or in
a case where the premise is leased, the tenderer has failed to provide a
copy of the lease of the premise; the tenderer has failed to fully complete
Schedule 1 and failed to submit a valid tax clearance certificate or tax
compliance status pin; the tenderer has failed to submit a certified B -BBEE
certificate, QSE or EME affidavit, whereas points were claimed and a copy of
the certificate or affidavit was supplied, a certified copy of the B -BBEE
certificate, QSE or EME affidavit may be requested.
31. The assessment of the administrative criteria is set out in Table 5 of the
Report. It states under schedule 3 (preference points claim form in terms of
the preferential procurement regulations of 2017 (MBD 6.1), that all the
bidders complied . Utilities claimed 18 points and that Contour claimed 20
points. Schedule 12 of the table dealing with “B-BBEE proof”, records that
Utilities had filed a valid B-BBEE sworn affidavit and Contour a valid B-BBEE
certificate. Under Notice 2, it was recorded that Contour had submitted an
expired tax compliance status pin, however it says this was immaterial for
purposes of bid evaluation. Thus, all the bids were found t o meet the
administrative compliance leg of the evaluation process.
32. With the bidders having been found to be eligible, responsive and
administratively compliant, a financial scoring was done in terms of the
Preferential Procurement Regulations of 2017 . The formula used factored
the following: ‘points scored for price of bid under consideration; price of bid
under consideration and price of lowest acceptable bid. In addition, each
bidder was awarded B -BBEE points depending on its B -BBEE status ,
resulting in Utilities receiving 18 points (as B-BBEE Level 2 contributor) and
Contour 20 points (as B-BBEE Level 1 contributor). The B -BBEE contributor
points were added to the overall scoring of each bidder. The BEC then used
the total scores to rank the bids.
33. The outcome of this exercise was that based on the total scores, which were
influenced by the B-BBEE points awarded, Utilities ranked first and Contour
came second. Consequently, the BEC recommended that the tender be
awarded to Utilities, “ for scoring the h ighest points in terms of preferential
procurement regulations contained in the Theewaterskloof supply chain
policy”.
34. Acting on the BEC recommendation, t he BAC resolved to award the tender
to Utilities on the same basis.
Discussion
Compliance with B-BBEE requirements
35. A company’s B -BBEE status is one of the factors to be weighed in a bid
evaluation process. The B -BBEE score earned by a bidder contributes
materially towards the determination of the outcome of a tender process.
36. According to the BEC Report, all the bidders for this tender claimed
preferential points for B-BBEE. All the bidders submitted B-BBEE certificates
to prove their status, except Utilities which submitted a sworn affidavit.
37. A Qualifying Small Enterprise (QSE), which means a measured entity under
the QSE scorecard regime with a n annual total revenue of bet ween
R10 million and R50 Million , is subject to a B-BBEE verification process
(conducted by an accredited verification agency or professional ) in order to
obtain a B-BBEE certificate.
38. By contrast, a 51% black owned QSE qualifies for a Level 2 B-BBEE status
without having to undergo a verification process , but on the strength of a
self-assessment produced in the form of a sworn affidavit , on an annual
basis, confirming, firstly, its annual total revenue of between R10 million and
R50 million and, secondly, its level of black ownership.5
39. Utilities took the option to submit a sworn affidavit to prove its B -BBEE
credentials for this bid.
40. Contour avers that Utilities’ B-BBEE affidavit was invalid and, as such, the
Municipality erred in awarding Utilities any preference points for B-BBEE.
41. I have indicated above t he proper approach , which is first to establish,
factually, whether an irregularity occurred, and thereafter the irregularity must
be legally evaluated to determine whether it amounts to a ground of review
under PAJA.6
42. Upon surveying the sworn affidavit, the following becomes apparent.
43. The deponent to the affidavit is Mr Brian Hill, who declares, inter alia, that:
43.1. he is a “member” of Utilities, a proprietary limited company;
43.2. the company is 54% black owned as per Amended Code Series 100
of the Amended Codes of Good Practice issued under section 9(1) of
the B-BBEE Act;
43.3. based on the financial statements/management accounts and other
information available on the latest financial year -end of 2020,
Utilities’ annual total revenue was between R10 000 000.00 (ten
million rand) and R50 000 000.00 (fifty million rand)
5 Codes of Good Practice on Broad-Based Black Economic Empowerment, 2019.
6 Allpay at para 28.
43.4. the company is at least 51% black owned , thus qualifying it as a
Level 2 B-BBEE Level Contributor.
43.5. the sworn affidavit will be valid for a period of 12 months from the
date signed by the commissioner of oaths.
44. It is not immediately clear whether the date of 22 April 2022 which appears
below the deponent’s signature is the same date on which the sworn affidavit
was signed by the commissioner of oaths.
45. It is common cause that a s a consequence of this declaration, Utilities was
awarded 18 points for its B-BBEE status level of contribution.
46. A sworn affidavit of this nature is meant to serve the same purpose as a B -
BBEE certificate, which is to provide an assurance of B -BBEE compliance,
but without having to incur the cost of a verification agency or professional .
This is a special dispensation given to black owned QSEs.
47. Contour avers that given the substantial savings in preparing a B -BBEE
affidavit instead of obtaining independent verification, municipalities should
be astute when evaluating a bidder’s self-assessment for B-BBEE
compliance. I agree.
48. Insistence on compliance with process formalities fulfils various purposes
including ensuring fairness to participants in the bid process and enhancing
the likelihood of efficiency and optimality in the outcome.7
49. In terms of the B -BBEE Practice Guide, 8 a non-binding guide issued by the
B-BBEE Commission to assist with the interpretation to ensure consistency
in the application of the B-BBEE Act, a B-BBEE sworn affidavit is evidence of
a measured entity’s compliance with the B -BBEE Act over a particular
7 Allpay at para 27.
8 Practice Guide 01 of 2018 published by the B -BBEE Commission entitled, “Determining the validity
of a Broad -Based Black Economic Empowerment Verification Certificate, B -BBEE Certificate and
Sworn Affidavit” (the B-BBEE Practice Guide”/ “Guide”).
period. According to the Guide, such compliance is based on B -BBEE
related information of a measured entity in line with the applicable Codes as
envisaged in section 9(1) of the B-BBEE Act.
50. The B-BBEE Practice Guide offers some pointers which it considers as key
when determining the validity of a sworn affidavit, such as:
50.1. the designation of the deponent as either the director, owner or
member must be indicated in order to know that person is duly
authorised to depose of an affidavit;
50.2. it should indicate the total revenue for the year under review and
whether it is based on audited financial statements or management
accounts;
50.3. the date the deponent signed and date of commissioner o f oaths
must be the same.
51. Utilities’ sworn affidavit does not bear distinct dates indicating when each of
the respective signatures of the deponent and that of the commissioner of
oaths were appended. In its answering affidavit, the Municipality asserts th at
the BEC had noted that the affidavit had been deposed to before a
commissioner of oaths on 22 April 2022. On the face of it, i t is
unascertainable whether th e date that appears on the document was the
date on which the deponent signed the affidavit or the date when the affidavit
was commissioned or both.
52. Utilities’ financial year -end is at end of February. Accordingly, the relevant
latest financial year -end would have been 2022. The financial in formation
used to measure the total annual revenue which qualifie d the company as a
Level 2 B -BBEE contributor QSE, in respect to this bid , was sourced from
financial year-end of 2020, some two financial years prior.
53. The sworn statement does not say whether financial information referred to
was sourced from financial statements (whether audited or not) or
management accounts or some other information.
54. At this juncture of the factual enquiry, it is apposite to ask w hat information
Utilities’ sworn affidavit was required to convey at the relevant time and
whether it did it in fact convey that information.
55. In my estimation, the purpose of the sworn affidavit is to give an assurance
of B -BBEE compliance at the relevant point, either at the closing time for
receipt of tenders, which in this case was 12h00 on Friday 29 April 2022 , or,
at the time of the awarding of B -BBEE points , or both . Either way, w ere
Utilities to undergo a B-BBEE verification process, based on the information
sourced from the 2020 financials , be found to be B-BBBEE compliant ? I
think not.
56. What of the warranty in the sworn affidavit that it was valid for a period of 12
months from the date signed by the commissioner?
57. To the extent that the impugned sworn affidavit sought to give an assurance,
based on unidentified 2020 financials, that Utilities satisfactorily met the B-
BBEE related tender requirements for eligibility , responsiveness and/or
administrative compliance, at the relevant point in time, this was misleading.
58. The limited time span of the utility of the sworn affidavit is suggestive of a
recognition of the ever-changing nature of the financial information which
should underpin B-BBEE compliance.
59. The Municipality acknowledges that , “the BEC did not go behind these
statements in the affidavit”; that, “there was no apparent reason for it to have
done so ”; and that, “the second respondent’s representations that it wa s a
qualifying QSE (i.e. that its revenue was within the prescribed parameters)
were accepted at face value as being true and correct.”
60. It is small wonder then that the BEC and the rest of the Municipality’s supply
chain management system failed to pick up the anomalies in the sworn
affidavit.
61. In its answering affidavit, Utilities simply says, without more, that “ at the time
of the bid submission, only the 2019/2020 annual fi nancial statements were
available. The 2020/2021 annual financial statements were signed off only
after submission of the bid . Moreover, referring to the 2020/2021 annual
financial statement would have made no difference as Utilities’ turnover did
not exceed R50 million in 2020/2021”.
62. This response does not address the many facets to a B -BBEE sworn
affidavit and how these were met at the relevant point in time. None of the
financial statements referred to were produced. It is not explained why other,
more current, financial information, such as management accounts, was not
used. In any event, this explanation was not before the decision-maker at the
time of the bid evaluation and was not considered by it.
63. It is uncontroversial that the evaluation of bids by public entities must be
done in accordance with the specifications for the particular procurement
and the points system as set out in the tender notice and the prescripts of
the Procurement Act. A proper evaluation of the contents of a sworn affidavit
is essential in order to ensure B-BBEE compliance and equal treatment of all
bidders.
64. The role that procedural requirements play in ensuring even treatment of all
bidders was dealt with as follows in Allpay:
“[23] To the extent that the judgment of the Supreme of Court of Appeal
may be interpreted as suggesting that the public interest in
procurement ma tters requires greater caution in finding that grounds
for judicial review exist in a given matter, that misapprehension must be
dispelled. So too the notion that even if proven irregularities exist, the
inevitability of a certain outcome is a factor that should be considered
in determining the validity of administrative action.
[24] This approach to irregularities seems detrimental to important
aspects of the procurement process. First, it undermines the role
procedural requirements play in ensuring even treatment of all bidders.
Second, it overlooks that the purpose of a fair process is to ensure the
best outcome; the two cannot be severed. On the approach of the
Supreme Court of Appeal, procedural requirements are not considered
on their own merits, b ut instead through the lens of the final outcome.
This conflates the different and separate questions of unlawfulness and
remedy. If the process leading to the bid’s success was compromised,
it cannot be known with certainty what course the process might have
taken had procedural requirements been properly observed.”
65. I conclude that the contents of the sworn affidavit did not reflect the true B-
BBEE status of Utilities at the time of its measure. It failed to fulfil the
purpose of a B-BBEE sworn affidavit which, in this case, would have been a
self-assessed qualification as an eligible black owned QSE.
66. It follows that the basis upon which the B -BBEE status points were awarded
to Utilities was flawed.
67. Consequently, the award of any B-BBEE points to Utilities on the strength of
the sworn affidavit constituted a material irregularity which, when legally
evaluated, amounts to a ground of review under PAJA.
68. I find the applicant has established that when the BEC and the supply chain
management conducted an evaluation of Utilities’ B-BBEE sworn affidavit:
68.1. a mandatory and material condition prescribed by an empowering
provision was not complied with (section 2(b) of PAJA);
68.2. relevant considerations were not considered (section 2(e)(iii) of
PAJA).
69. The Municipality ’s failure in the evaluation process renders the decision
unconstitutional (section 2(i) of PAJA).
70. Given the conclusion I have reached, that there was a failure of compliance
with B-BBEE requirements, it is not necessary to determine the remainder of
the issues or the additional grounds in the review application . The finding I
have set out above in relation to sections 2(b), 2(e)(iii) and 2(i) of PAJA
is dispositive of the matter.
Remedy
71. Contour seeks an order reviewing and setting aside the decision to award
the tender to Utilities.
72. It is well recognised that once a ground of review under PAJA has been
established, section 172(1)(a) of the Constitution requires the decision to be
declared unlawful.9 I have concluded that a ground of review has been
established and the decisions taken consequent thereto to be unlawful.
73. The consequences of the declaration of unlawfulness must then be dealt
with in a just and equitable order under section 17 2(1)(b).10 Allpay reiterated
that section 8 of PAJA gives detailed legislative content to the Constitution’s
“just and equitable” remedy.11
9 Allpay at para 25.
10 Id; Bengwenyama Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and Others [2010]
ZACC 26; 2011 (4) SA 113 (CC); 2011 (3) BCLR 229 (CC) (Bengwenyama) at paras 81 -3. See also
Minister of Health and Another v New Clicks South Africa (Pty) Ltd and Others [2005] ZACC 14; 2006
(2) SA 311 (CC); 2006 (8) BCLR 872 (CC) (New Clicks) at para 19 and De Lange v Smuts N O and
Others [1998] ZACC 6; 1998 (3) SA 785 (CC); 1998 (7) BCLR 779 (CC) at para 104.
11 Section 8(1) of PAJA provides:
“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―
(a) directing the administrator―
(i) to give reasons; or
(ii) to act in the manner the court or tribunal requires;
74. An application was mooted during the hearing to amend the notice of motion
in order to seek further relief reviewing and set ting aside the resultant
contract. This was however not pursued.
75. Contour seeks a substitution order in terms of which the tender is, instead, to
be awarded to itself . It argues that this court is in as good a position as the
BEC or the BAC to award the tender. It argues further that once the B-BBEE
points awarded to Utilities are deducted from the total score, Contour , which
was ranked second, scores the highest. It is on that plain basis that Contour
seeks the substitution order.
76. Steenkamp adopted the following approach towards a c onsideration of an
appropriate remedy in public law:
“It goes without saying that every improper performance of an
administrative function would implicate the Constitution and entitle the
aggrieved party to appropriat e relief. In each case the remedy must fit
the injury. The remedy must be fair to those affected by it and yet
vindicate effectively the right violated. It must be just and equitable in
the light of the facts, the implicated constitutional principles, if a ny, and
the controlling law. It is nonetheless appropriate to note that ordinarily a
breach of administrative justice attracts public law remedies and not
private law remedies. The purpose of a public law remedy is to pre -
empt or correct or reverse an improper administrative function. In some
instances the remedy takes the form of an order to make or not to
make a particular decision or an order declaring rights or an injunction
(b) prohibiting the administrator from acting in a particular manner;
(c) setting aside the administrative action and―
(i) remitting the matter for reconsideration by the administrator, with or without directions; or
(ii) in exceptional cases―
(aa) substituting or varying the administrative action or correcting a defect resulting from the
administrative action; or
(bb) directing the administrator or any other party to the proceedings to pay compensation;
(d) declaring the rights of the parties in respect of any matter to which the administrative action
relates;
(e) granting a temporary interdict or other temporary relief; or
(f) as to costs.”
to furnish reasons for an adverse decision. Ultimately the purpose of a
public remedy is to afford the prejudiced party administrative justice, to
advance efficient and effective public administration compelled by
constitutional precepts and at a broader level, to entrench the rule of
law.”12
77. Section 8 of PAJA provides some “[e]xamples of public remedies suited to
vindicate breaches of administrative justice ”13, but this is not an exhaustive
list. However, section 8 confers on a court a “ generous jurisdiction to make
orders that are ‘just and equitable’”.14
78. Relying on Allpay 2 an d other related cases,15 Utilities submitted that were
the court to find one of the grounds of review to have been established, it
should not set aside the tender, citing reasons of practicality, the seriousness
of the illegalities, prejudice to third parties and the passage of time.
79. Utilities contends that Contour’s own bid which was only attached to its
replying affidavit , after Utilities and the Municipality had taken the point in
their answering papers , was also susceptible to some criticism. The
allegation is that Contour’s bid documents were either incomplete or replete
with irregularities , such that substitution without having ventilated these
issues would be inappropriate.
80. The Municipality’s stance is that should the court find that a ground of review
has been established, the proper course to follow would be a remittal, noting
12 Steenkamp at para 29.
13 Steenkamp at para 30.
14 Id. Quoted with approval in Bengwenyama Minerals (Pty) Limited and Others v Genorah Resources
(Pty) Ltd and Others 2011 (4) SA 113 (CC) at para 83.
15 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the
South African Social Security Agency and Others (No 2) [2014] ZACC 12; 2014 (6) BCLR 641 (CC);
2014 (4) SA 179 (CC) (17 April 2014) (Allpay 2); Chairperson: Standing Tender Committee and Others
v JFE Sapela Electronics (Pty) Ltd and Others (511/2004) [2005] ZASCA 90; 2008 (2) SA 638 (SCA) ;
[2005] 4 All SA 487 (SCA) (26 September 2005) at para 29; Esorfranki Pipelines (Pty) Ltd v Mopani
District Municipality (CCT 222/21) [2022] ZACC 41; 2023 (2) BCLR 149 (CC); 2023 (2) SA 31 (CC)
(30 November 2022) at para 24; Millenn ium Waste Management (Pty) Ltd. v Chairperson of the
Tender Board: Limpopo Province and Others (31/2007) [2007] ZASCA 165; [2007] SCA 165 (RSA);
[2008] 2 All SA 145; 2008 (2) SA 481; 2008 (5) BCLR 508; 2008 (2) SA 481 (SCA) (29 November
2007) at para 27.
that a case implicating an order of substitution requires courts to be mindful
of the need for judicial deference, 16 and their obligations under the
Constitution.17
81. The Constitutional Court in Trencon provided the following guidance:
“[48] A court will not be in as good a position as the administrator
where the application of the administrator’s expertise is still required
and a court does not have all the pertinent information before it. This
would depend on the facts of each case. Generally, a court ought to
evaluate the stage at which the administrator’s process was situated
when the impugned administrative action was taken. For example, the
further along in the process, the greater the likelihood of the
administrator having already exercised its specialised knowledge. In
these circumstances, a court may very well be in the same position as
the administrator to make a decision. In other instances, some matters
may concern decisions that are judicial in nature; in those instances – if
the court has all the relevant information before it – it may very well be
in as good a position as the administrator to make the decision.”
82. In this case, the reasons advanced by both the Municipality and Utilities for
substitution included the following:
82.1. the nature of this bid is highly technical, complex and polycentric;
82.2. the decision requires expertise and technical knowledge;
82.3. although Contour’s bid came second in the scoring , it did not follow
that it would have been awarded the tender;
16 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others (CCT 27/03)
[2004] ZACC 15; 2004 (4) SA 490 (CC); 2004 (7) BCLR 687 (CC) (12 March 2004) at para 46, citing
with approval: C Hoexter “The Future of Judicial Review in S outh African Administrative Law” (2000)
117 SA Law Journal 484 at 501-2.
17 Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited
and Another (CCT198/14) [2015] ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC ) (26
June 2015) (Trencon) at para 46.
82.4. Contour’s bid documents may themselves be subject to criticism. I
note that the BEC did flag that Contour’s tax compliance certificate
had expired on 8 June 2022, although this was not deemed to be
material enough to exclude the bidder from the evaluation process. I
would not be in a position to assess this aspect, for instance, on
available information.
83. I am cognisant of the conditions in the tender notice, inter alia, that t enders
would be evaluated in terms of price and preference , and that the
Municipality was not obliged to accept the lowest tender. These would be
best assessed by the relevant functionary.
84. The Municipality acknowledged in its heads of argument the limited timespan
of the Utilities’ contract, which commenced on 1 December 2022 and is due
to run until 30 June 2025 , and that remittal would still , at this juncture , be a
just and equitable remedy for the Municipality to make a fresh decision.
Conclusion
85. I conclude that the allocation of B-BBEE points to Utilities on the strength of
the sworn affidavit that was presented to the Municipality was irregular. The
resultant decision to award the tender to Utilities stands to be reviewed and
set aside.
86. This court is not in as good a position as the administrator to finally decide
the award of the tender. Having regard to the reasons set out above, I hold
the view that the decision of the administrator is not a foregone conclusion.
Accordingly, remittal is the appropriate course to follow.
Order
1. The decision taken by the first respondent to award Tender FIN
03/2022/23 (the tender) to the second respondent, is reviewed and set
aside.
2. The tender is remitted back to the Theewaterskloof Municipality for
reconsideration in terms of the provisions of section 8 (1)(c)(i) of PAJA ,
within a period of 90 days.
3. The first and second respondents shall be jointly and severally liable for
the applicant’s costs of suit, on the “C” scale.
T.S. SIDAKI
Acting Judge of the High Court
APPEARANCES
For the Applicant: Adv JG Dickerson SC et
Adv J Nicholson
Instructed by: Shepstone Wylie Attorneys, Durban
For the First Respondent: Adv N de Jager
Instructed by: Fairbridges Wertheim Becker, Cape Town
For the Second Respondent: Adv V Maleka SC et
Adv E Cohen
Instructed by: Smit Sewgoolam Inc, Johannesburg
c/o Bisset Boehmke McBlain, Cape Town