§REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO .: B3733/23
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
Date: 27 February 2025
E van der Schyff
In the matter between:
NDODANA CONSULTING ENGINEERS (PTY) LTD FIRST APPLICANT
OARONA CONSULTING AND ENGINEERING (PTY) LTD SECOND APPLICANT
NDODANA -OARONA JOINT VENTURE THIRD APPLICANT
and
SOUTH AFRICAN NATIONAL ROADS AGENCY
SOC LIMITED FIRST RESPONDENT
INGEROP SOUTH AFRICA (PTY) LTD SECOND RESPONDENT
HORIZON CONSULTING ENGINEERS (PTY) LTD THIRD RESPONDENT
THE INGEROP -HORIZON JOINT VENTURE FOURTH RESPONDENT
JUDGMENT
Van der Schyff J
Introduction
[1] The first respondent, the South African National Road s Agency SOC Limited
(“SANRAL”) , is an independent statutory company. It operates in terms of its
founding legislation, the South African National Roads Agency Limited and
National Roads Act 7 of 1998. SANRAL’s statutory mandate includes the financing,
improvement, management, and maintenance of the national road network in
South Africa.
[2] In September 2022, SANRAL issued three tenders in which it sought consulting
engineering services for the routine road maintenance (RRM) of freeways in and
around Tshwane, Johannesburg, and Ekurhuleni, (the “Gauteng Freeways”)
respectively. The applicants, collectively referred to as Ndodana, and the second
to fourth respondents, collectively referred to as Ingerop, were among the parties
that submitted tenders in respect of the Gauteng Freeways.
[3] Ndodana , the incumbent service provider, has been the successful bidder since
February 1997 when the three RRM contracts were first awarded to it . Ndodana
has been doing the same work that went out on tender in relation to the same
three sections of the Gauteng Freeway s for the past 25 years. This round,
Ndodana’s bids were , however, found to be non -responsive. Ingerop was
ultimately held to be the successful bidder and was awarded the three tenders
despite its tenders being significantly higher than Ndodana’s , and in two of the
tenders were the highest tenders submitted .
[4] Ndodana subsequently approached the urgent court for interim relief, pending the
review. Interim relief was granted. I am herein seized with the review proceedings.
[5] Ndodana essentially seeks this court to review and set aside SANRAL’s decisions
to declare its bid submissions to be non-responsive , to declare its bid submissions
responsive , to review and set aside the decisions to award the tenders to Ingerop,
and to remit the decisions back to SANRAL. The bids were respectively submitted
for the following contracts:
i. SANRAL X.002 -160-2023/IF (Toll) and X.002-161-2023 /1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route N4 Section 1, N4 Section 11 & 12, N4 Section 21, R21
Section 2, R104 Sections 1 & 2 and R 573 (Tshwane Freeway RRM);
ii. SANRAL X.002 -162-2023/ 1F (Toll) and X.017-010-2023 /1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route N1 Section 19, N 1 section 20, N1 Section 21, N3 Section 2,
N12 Section 18 and N17 Section 1 (Johannesburg Freeway RRM);
iii. SANRAL X.002 -163-2023/IF (Toll) and X.003 -161-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route R 21 section 1& 2, N 12 Sections 18 & 19, N3 Sections 11 &
12 and N17 Section 2 (Ekurhuleni Freeway RRM);
[6] Ndodana initially raised several grounds of review. It took issue with the procedure
followed in declaring its tenders non -responsive and the reasons provided for the
decisions. After having had the benefit of scrutinising the record provided by
SANRAL, Ndodana raised two further grounds of review, to wit, a reasonable
perception of bias and that the decision -maker was not properly constituted and
subsequently lacked authority. In this judgment, I commence by considering the
averment that the decision -maker was not properly constituted and the ensuing
consequences.
Was the decision -maker properly constituted?
[7] After having had the opportunity to scrutinise the record provided by SANRAL,
Ndodana concluded that the record does not demonstrate compliance with the
tender requirements governing the constituency of the Bid Evaluation Committee
(the “BEC”).
[8] The record reflects that the BEC held a meeting on 2 March 2023. Seven voting
members were in attendance. These were Mr. Moloto, Mr. Rughodo, Mr. Nogwaza,
Mr. Gogotya, Ms. Faku , Ms. Ndugane and Ms. Dladla. A second meeting was held
on 23 March 2023. The minutes reflect the attendance of five voting members , Mr.
Moloto, Mr. Rughodo, Mr. Nogwaza, Ms. Ndugane and Mr. Gogotya. Ndodana’s
disqualification and Ingerop JV’s appointment were apparently approved at the
BEC meeting on 23 March 2023.
[9] Mr. Gogotya is identified as a voting member who attended both the meetings . He,
however, did not qualify to be a voting member on 2 March 2023 or 23 March 2023
as his letter of appointment to the BEC reflects that his term of office expired on 1
March 2023.
[10] Ndodana averred in the confidential supplementary affidavit filed that it appears
that the BEC might not have been quorate or legitimately constituted. Since the
record does not reflect anything to gainsay this averment, Ndodana invited
SANRAL to respond to this averment.
[11] SANRAL, however, did not file a further supplementary answering affidavit after
having received the confidential supplementary affidavit filed by Ndodana.
Ingerop, in its confidential answering affidavit explained that the BEC is only
responsible for the evaluation of the bids submitted in response to a public
invitation for bids. The BEC then submits a report and recommendation to the Bid
Adjudication Committee (the “BAC”). The BEC is an evaluation committee . The
final decision of the appointment lies with the BAC. Ingerop conceded that Mr.
Gogotya’s appointment to the BEC expired. Ingerop claims, however, that five
members were appointed to the BEC, that all five members attended both
meetings and states that even if it is argued that Mr. Gogotya was not a member of
the BEC then four members attended and a quorum was met.
[12] The court is left in the dark as far as the compilation of the BEC is concerned since
the minutes of the BEC reflect that seven voting members attended the first and
five voting members attended the second BEC meeting . The court has not been
provided with any information as to the minimum required members or whether a
quorum was pr escribed in the enabling policies or regulations. In the absence of
any other facts brought to the fore by SANRAL, it is common cause that the BEC
was not properly constituted in that Mr. Gogotya attended and participated as if he
was a member of the BEC, whilst his appointment has in actual fact expired.
[13] In Actaris South Africa (Pty) Ltd v Sol Plaatje Municipality and Another1 the court
held that decisions based on recommendations of a bid evaluation committee that
was not properly constituted do not pass muster. In Mjayeli Security (Pty) Ltd and
Another v South African Broadcasting Corporation SOC Limited and Others2 the
court held that the decisions and recommendations of an improperly constituted
BEC are invalid and that this alone is sufficient reason to set aside any decision
based on such recommendations.
[14] The conundrum caused by Mr. Gogotya’s participation in the BEC’s meetings
transcends the question of whether the BEC is a voting committee and whether the
meeting was quorate. The fact is that a person who was not authorised or
appointed to participate in the evaluation of the bids, participated as a ‘voting
member’. Irrespective of whether any actual voting occurred, the only inference
that can be drawn from Mr. Gogotya being reflected as a voting member is that he
actively participated in the evaluation process and engaged with the committee
members on the topic as being a member of the BEC . The court is in the dark
about the extent of his participation and the manner in which he could or did
influence the other members’ views on the tenders.
[15] It is trite that bid evaluation committees are responsible for the evaluation of bids
submitted in response to a public invitation for bids.3 The evaluation of the bids
must be done in accordance with the specifications for the particular procurement.
The BEC must evaluate the responsiveness of bids and the ‘ability’ of each
responsive bidder to execute the contract.
1 (1357/2007) [2008] ZANCHC 73 (12 December 2008) at paras [70] and [71].
2 (47916/2017) [2023] ZAGPJHC 1132 (10 October 2023) at para [90].
3 See, inter alia , Bolton, P. ‘The Committee System for Competitive Bids in Local Government’ 2009 (12) 2
PELJ 57 -96 for a comparable discussion.
[16] Having regard to the important function of a BEC, and the reliance placed by a
BAC on the recommendations of a BEC, I must find that Mr. Gogotya’s presence
and participation caused the BEC not to be properly constituted and tainted the
sitting of the BEC and any decision made by it. This case is to be distinguished
from the position in Aurecon South Africa (Pty) Ltd v City of Cape Town ,4 where a
case was made out that the regulatory framework allows participation by non -
members of the BEC in the evaluation of tenders. In Aurecon the non -member in
question was not considered to be a member of the BEC. All the participants
understood that he was there only in an advisory capacity. In casu, SANRAL did
not rely on any provision in any relevant document or regulation allowing a non -
member of the BEC to participate in or advise the BEC in connecti on with the
scoring process or attending committee meetings in an advisory capacity. Mr.
Gogotya , in any event, did not participate in an advisory capacity but as a
committee member. On this ground alone, the applicant stands to succeed in
seeking the review and setting aside of the decisions to find Ndodana’s bids non -
responsive and to award the respective tenders to Ingerop.
Substantive grounds for reviewing and setting aside the impugned decisions
[17] Ndodana raised several substantive grounds for review. Despite finding that the
impugned decisions stand to be reviewed and set aside because the BEC was not
properly constituted , it is necessary to have regard to the other grounds of review
raised by Ndodana . These issues need to be clarified to prevent them from
occurring again in the future . To contextualise the discussion and the findings to be
made, it is necessary to set out the factual context in more detail.
Factual matrix
[18] SANRAL utilised the ‘tw o-envelope’ bidding system when it called for the
respective Gauteng Freeways’ tenders. It is trite that the ‘two -envelope’ system
allows for the evaluation of technical merit without initially considering the price.
4 2016 (2) SA 199 (SCA) (9 December 2015) at para [33].
The second envelope is only opened in relation to those bidders who met the
technical and functionality requirements.
[19] In all three tenders, Ndodana , who was the consultant on the Gauteng Freeways
for the past 25 years, passed the technical and functionality evaluation . All bidders
who passed the functionality evaluation were then evaluated on ‘price and
preference’. After the second envelopes were opened, Ndodana scored the
highest number of points in each of the three tenders. Since the second envelopes
were publicly opened, it is apt to provide the respective tender amounts and total
points obtained by each consultant wh o submitted a tender.
Tshwane
Consultant Price Total points
1 R 25 915 255.18 98
Ndodana R 26 218 571.13 99.06
3 R 26 389 860.75 98.53
4 R 26 622 183.75 97.82
5 R 26 970 628.00 96.74
6 R 27 562 050.00 94.92
7 R 29 163 310.00 89.97
Ingerop R 32 763 097.50 78.86
JHB
Consultant Price Total points
Ndodana R 31 453 687.38 100
2 R 31 620 796.87 99.57
3 R 32 203 128.00 98.09
4 R 32 794 550.00 96.59
5 R 34 395 810.00 92.52
6 R 34 867 545.75 91.32
Ingerop R 38 047 922.50 83.23
Ekhurhuleni
Consultant Price Total points
Ndodana R 26 966 444.88 100
2 R 27 098 226.25 99.61
3 R 27 718 128.00 97.77
4 R 28 309 550.00 96.02
5 R 29 324 810.25 93.00
6 R 29 900 460.00 91.30
Ingerop R 33 518 072.50 80.56
8 R 36 255 762.50 72.44
[20] Despite the fact that Ndodana had the lowest price and scored the highest points
at the pricing stage on two of the tenders and on the remaining tender, through a
combination of its BEE ranking and price still scored the highest points although it
did not tender the lowest amount , the tenders were awarded to Ingerop. The rule
53 record revealed that all the bids, save for that of Ingerop and one other bidder
on the Ekhurhuleni tender, were found to be non -responsive. It is the decision to
find Ndodana’s bids non -responsive, that essentially lies at the heart of this review
application. I pause to note that I find it curious that tenders were declared non -
responsive after being ranked according to the points’ system. Generally, only
responsive tenders are ranked. This contributes to the court’s discomfort with the
process followed by SANRAL.
[21] The BEC met twice after the second envelopes were opened. The first meeting
took place on 2 March 2023, and the second on 23 March 2023. No transcribed
record of the BEC meetings that were conducted virtually was attached to the
documents presented to the court. What is clear, however, is that SA NRAL
requested Ndodana and all the other bidders, except Ingerop and one other bidder
in the Ekurhuleni tender, to justify their prices after the first meeting , and in letters
dated 9 March 2023.
[22] I pause to note that every consultant who submitted a lower bid than Ingerop
received a request to justify its prices. It also needs to be mentioned that when
Ndodana submitted its tenders in October 2022, the second envelope s each
contained a cover letter wherein Ndodana explained its pricing strategy. Ndodana
informed the procurement officer, and essentially the BEC, of the following:
i. ‘Ndodana Consulting Engineers (Pty) Ltd has been involved with the routine
road maintenance of the Johannesburg, Tshwane and Ekurhuleni freeways
for over 2 decades. Currently Ndodana Oarona JV is appointed in the three
existing routine road maintenance contracts: …
This continuous involvement has allowed Ndodana to garner a substantial
amount of knowledge and records on the existing RRM infrastructure and
issues on the road and built up an experienced RRM team with extensive
experience on the Gauteng freeways.
These past appointments have given Ndodana Oarona JV the critical
knowledge and access to information that has influenced our pricing
strategy and allows for certain pay -items to be priced more economically
than other tenderers who may not have the same amount of experience.’
[23] Ndodana then referred to 8 specific pay -items to illustrate their strategy e.g.:
i. 34:02 Tender Evaluation Report
Ndodana Oarona JV has evaluated these RRM tenders multiple times and
has templates available.
ii. 35.02(c) Establishment of office equipment
All equipment is currently available on our existing sites and establishment
will be a minimal cost.
iii. 35:07 Routine Maintenance and Slope Management System
Based on current experience, procedures and company standard operating
procedures these items are achievable at minimal additional costs as there
is always a Route Manager or Assistant Route Manager on standby at all
hours.
[24] In regards to some of the pay -items, Ndodana quoted nominal amounts, e.g. in
32.01(a), 32.01(c), 32,02, 34.01(a),34.01(c), 34.02, 34.03, 35.01(c)(iii), 35.01(b),
35.05, 35.06. Ndodana’s justification for this boils down to it stating that as the
incumbent contractor, it already has the necessary skills, knowledge, infrastructure
or personnel to fulfill the functions at minimal cost.
[25] The record provided to the court does not reflect that the BEC gave any
consideration to Ndodana’s pricing strategy explanation before the price
justification lette rs were sent.
[26] In the price justification letters of 9 March 2023, SANRAL informed all the bidding
consultants who submitted lower tenders than Ingerop, including Ndodana , of the
following:
i. SANRAL is currently conducting tender evaluation;
ii. During the evaluation process, it was found that the tender submission
contains ‘numerous unacceptable rates’;
iii. In most instances, there are numerous zero rates, very high rates, and very
low rates;
iv. The tender offer can be said to be unbalanced;
v. SANRAL has many examples where the acceptance of unbalanced tenders
poses a problem for SANRAL in the execution of the contracts;
vi. Very high -rate items and very low -rate items are a cause of concern as it
may constitute a considerable financial risk in the event of possible
variations in quantities, claims etc.;
vii. Where items have been priced very low, it would cause similar risk to the
bidder in the event of ‘scope execution at economically unviable rates,
scope creep and increased quantities etc.’;
viii. An indication of the items with rates considered as unbalanced are marked
up in the Bill of Quantities attached. Rates identified as ‘low rates’ ‘that may
be of concern to the tenderer’ are indicated in blue, rates identified as high
rates ‘ and being a risk to SANRAL’ are indicated in red; zero rates are
indicated in yellow.
ix. The highlighted tendered rates are of concern as these constitute unhealthy
competition;
x. SANRAL drew the bidders’ attention to clause 2.1.10 of the Pricing
Schedule, that in SANRAL’s view meant that ‘tenderers are expected to
submit rates that can stand by themselves for payment of work done’.
xi. Bidders were called to adjust rates by reducing very high items and
submitting economically viable or market rates for items marked as low or
zero rates, whilst keeping the overall tender price the same as the tendered
sum.
xii. Where R0 rates are provided, bidders are requested to provide justification
on how they would execute the contract without having priced the item in
question.
[27] All the items marked in Ndodana’s Bill of Quantities were marked blue, hence
identifying the rates as ‘low rates ’.
[28] Ndodana ’s responses to the price justification letters are dated 16 March 2023.
Ndodana’s response to the price justification request in all their tenders was as
follows:
i. Ndodana noted SANRAL’s concerns related to the very low rates compared
to generally accepted market -related rates;
ii. Ndodana has ‘intentionally tendered in this way to ensure that they remain
in tou ch in this competitive environment ’;
iii. Ndodana reiterated its prior involvement in routine road maintenance on
these specific freeways for over 2 decades;
iv. This continuous involvement allowed Ndodana to garne r a substantial
amount of knowledge, records and develop standard operating procedures
for most instances on the existing RRM infrastructure and issues on the
road;
v. Ndodana built up an experienced RRM team with extensive experience on
the Gauteng Freeways
vi. Ndodana has gained critical knowledge and access to information that
influenced its pricing strategy;
vii. This allows for certain pay -items to be priced more economically than other
tenderers who may not have the same amount of experience;
viii. Pricing some of these items higher would be charging SANRAL twice for
work that has already been completed, and this could be construed as
unethical;
ix. Ndodana again referred to practical instances and specific price -items and
provided reasons for each low tender ;
x. Ndodana commented on each line item in the Bill of Quantities justifying the
particular rate and confirmed that ‘each stage/phase of a project is priced
separately and no cross -subsidisation between phases/stages occurs.’
xi. Ndodana concluded its justification letter with the undertaking that ‘any
increase in the quantities5 will not result in any claim for amendment rates or
additional costs’ .
[29] Due to the pricing strategy it followed, it was difficult for Ndodana to balance rates
without affecting the total price of the tender. Ndodana kept the rates of each price
item in the Bill of Quantities unchanged.
[30] Presumably after the BEC received the respective consultants' justification or
adjustments, memoranda were prepared that were eventually submitted to the
BAC. These were presumably discussed at the second BEC meeting on 23 March
2023. In these memoranda, the following is, amongst other recorded:
‘During the tender evaluation process, it was found that several
service provider’s ( sic) tender submissions contained numerous
unacceptable rates. In most instances, service providers have
tendered numerous zero cost rates, very high rates, and very low
rates, and therefore deeming the received tender offers
unbalanced.
5 It is relevant to note that the quantities were fixed quantities provided by SANRAL in the excel pricing
schedule that had to be completed by the respective bidding consultants.
SANRAL has many examples where the acceptance of
underpriced and unbalanced tenders poses a problem for
SANRAL in the execution of contracts.’
[31] The BEC then identified Ndodana as one of the bidders who submitted
‘unreasonable and out of proportion’ tenders due to the majority of their tendered
rates being ‘unrealistic ’.
[32] The BEC , relying on Tender Clause 2.1.10, and Tender Clause 3.8.2 declared
these bids non -responsive. Tender Clause2.1.10 provides as follows:
‘A tender may be deemed non -responsive if the unit rates or
lump sums for some of the items in the Pricing Schedule are, in
the opinion of the Employer, unreasonable or out of proportion,
and if the tenderer fails, within a period of seven (7) days of
having been notified in writing by the Employer to adjust the unit
rates or limp sums for such items, to make such adjustments.’
Tender Clause 3.8.2 provides that a responsive tender is one that conforms to all
the terms, conditions and scope of work of the tender documents, without material
deviation or qualification. A material deviation or qualification is one which, in the
employer’s opinion, would
• Detrimentally affect the scope, quality, or performance of the works, services or
supply identified in the scope of works,
• Significantly change the employer’s or the tenderers risk and responsibilities
under the contract, or
• Affect the position of other tenderers presenting responsive tenders, if it were
rectified.
[33] The rule 53 record indicates that none of the bidders’ responses to SANRAL were
acceptable to SANRAL as SANRAL declared the bids non -responsive. This
effectively disqualified all but Ingerop and one bidder in the Ekhurhuleni tender
from competing for the Gauteng Freeway tenders. Coincidentally, all bidders who
submitted prices cheaper than Ingerop were disqualified.
[34] The record also reflects that the BEC prepared two standar dised responses that
were respectively used in the respective memoranda in cases where the
consultant’s bid was regarded to be too high or too low. The record provided does
not indicate that each individual consultant’s price justification was carefully
scrutinised and analysed. It seems as if the respective consultants’ justification
was grouped together based on the nature of the justification and then generically
dealt with.
[35] The detailed information contained in the rule 53 record reflected above was,
however, not available to Ndodana before the record was filed. After Ndodana
responded to SANRAL’s price justification letter in March 2023, it did not receive
any further communication from SANRAL. Ndodana’s legal representative sent a
letter dated 2 May 2023 to SANRA L. Ndodana, among others, requested to be
informed whether it was indeed eliminated , for example, by its bids being declared
unresponsive, and if so, on what grounds. It is only after this letter was sent that
Ndodana was informed that SANRAL , already on 29 and 30 March 2023, had
awarded all three tenders to Ingerop
[36] SANRAL provided its reasons in a letter dated 10 May 2023. The reason for
SANRAL’s decision to declare Ndodana’s bid unresponsive, is contained in one
paragraph of a letter containing 18 paragraphs. Paragraph 13 of the letter reads as
follows:
‘In this instance, SANRAL duly complied with the above and
having assessed your client’s bid and responses as provided on
16 March 2023 determined that your client’s bid was
nonresponsive for it did not comply with the conditions and scope
requirements for this tender, as the rates provided could not
economically stand by themselves for the contract specification
and scope deliverables in question without seeking additional
funding from other income sources or from other rate items in the
Bill of Quantities.’ (My emphasis.)
This, SANRAL contended, constitutes a material deviation from the
tender documents , which render ed the bids non -responsive.
The parties’ submissions
[37] Ndodana asserts that SANRAL (i) afforded a wrong interpretation to Tender
Clause 2.1.10 and paid mere lip service to the audi et alteram partem principle
engrained in the clause ; (ii) SANRAL did not follow the prescribed mandatory
procedure outlined in its own tender documents; (iii) S ANRAL’ s reasons are
irrational in the sense that its decision to eliminate Ndodana was insufficiently
connected to the purpose of the tender and the information that served before the
decision -makers; (iv) SANRAL failed to take certain relevant considerations into
account; (v) SANRAL’s procedure was unfair in that it failed to adequately give the
applicants prior audi alteram partem ; and (vi) in taking the impugned decisions
SANRAL was biased or can reasonably be suspected of bias.
[38] SANRAL contends that after considering Ndodana’s bids and the low rates
contained therein, SANRAL regarded the rates as ‘constituting unhealthy
competition’ and a risk during the execution of the contract. It provided Ndodana
with the opportunity to adjust its rates whilst keeping the submitted tender price.
Ndodana failed to adjust unit prices and attempted to provide justification as to why
it quoted the prices it quoted.
[39] SANRAL claims that after considering Ndodana’s response , it still held the view
that Ndodana’s price posed a risk and that it may be difficult for the tenderer to
sustain a thirty -six (36) months contract. The justification provided did not, in
SANRAL’s view, mitigate this risk.
[40] SANRAL asserts that it adhered to the audi et alteram principle in that it gave
Ndodana the opportunity to make representations and considered their
representations. The principle does not require that the decision -maker must agree
with what the bidder says or that the decision -maker must henceforth continuously
engage ‘back and forth’ with the bidder on its bids and representations. SANRAL
claims that its minutes of the BEC reflect that Ndodana’s representations were
considered.
[41] SANRAL states that Ndodana’s view that it should have been declared the
preferred bidder and that SANRAL should thereafter have proceeded to negotiate
market -related prices with them is untenable. The conditions set out in the bid
documents clearly stated that only bids which are found to be responsive would be
evaluated on functionality and pricing. Ndodana’s bid was found not to be
responsive on pricing. SANRAL’s obligation to enter into negotiations relating to
market price rates only applied if the bidd er’s bid was found to be responsive on all
issues. The negotiations to market -related prices contemplated in the tender
documents entailed a downward adjustment, and not the converse.
[42] SANRAL denies that its decision was irrational. It claims that in the context of
these tenders, and in order to ensure that the services would be cost effective, it
considered among others the prices quoted by the bidders for the services and
whether the service providers would, taking into account a change in
circumstances, still be able to deliver on the services. It did so by considering ‘each
and every price quoted by the bidders including Ndodana [in] each item in the Bill
of [Q]uantities.’
[43] In Ndodana’s case, SANRAL contended, it was found that there is a real risk that
Ndodana would not, in due course , be able to deliver the services at that price
without compromising the quality and standard of the services. The deponent to
the answering affidavit then refers to specific items in the Bill of Quantities and
Ndodana’s response .
[44] SANRAL took issue with Ndodana’s explanation that its low rates are justified
because it either had the information required already at its disposal and need not
expend costs in compiling certain reports, that it already has the necessary
templates available, that certain items are ‘included costs’ or will be achieved at
‘minimal cost’. SANRAL opined that it still had to pay for these services but that
Ndodana had ‘nonetheless’ opted not to price them. SANRAL claims that Ndodana
has not provided reasons f or charging extremely low rates and that it is, therefore,
clear that Ndodana would not be able to deliver these services without
compromising the standard due to under -quoting.
[45] SANRAL denies that it failed to take into account relevant considerations. SANRAL
claims that it ‘considered each of the line items,’ and ‘took into account the nature
of the services in respect of each line item, and the impact on the quality of
services of the quoted price s.’ It further took into account market rates in respect of
these services and concluded that, given these materially low rates, Ndodana
would not be able to deliver on the services without compromising the quality.
[46] SANRAL denies being biased in favour of the Ingerop . SANRAL claims that
although it is correct that Ingerop was not called upon to readjust its prices, albeit
higher than other bidders’ prices, is not evidence of bias in favour of Ingerop. Even
if some line items may have been higher, all other items Ingerop quoted were
market -related and did not pose a risk to SANRAL.
[47] SANRAL admits that Ndodana has been the incumbent service provider in respect
of the contracts for the past 25 years, but denies that Ndodana was , by virtue
thereof, best suited for appointment. SANRAL opines that Ndodana’s experience
for the duration which they held the contract would only have been of relevance
after the award of the contract. SANRAL submits that if Ndodana was able to
‘underquote’ on their bid it would give them an unfair advantage over bidders ‘in
that their bid will always be low in pr ice compared to other bidders.’ This, SANRAL
contends, would seem like the tender is tailormade for Ndodana.
[48] SANRAL curiously denies that the respective bidders either received response 1 or
2, in the respective memoranda drawn up for the BAC’s benefit. This is an
objective fact determinable on a reading of the respective memoranda. SANRAL’s
explanation that - ‘This is how SANRAL classified the responses, after analy sing
various responses by each bidder. They did not mean that those were responses
to individual bidder[s].’, fails to convince, particularly in the absence of any
evidence relating to the discussion and individual analyses of the bids.
[49] Ingerop also filed an answering affidavit to Ndodana’s supplementary affidavit. I
agree with Ndodana that Ingerop’s contribution to the issues at hand is of little
value, as it is not Ingerop, but SANRAL’s decisions and the reasons for taking the
decision and the administrative decision -making processes that lie at the heart of
this review. Ingerop’s views cannot justify decisions taken by SANRAL if SANRAL
cannot sufficiently justify the decisions.
Discussion
[50] An acceptable tender is defined in section 1 of the Preferential Procurement Policy
Framework Act 5 of 2000 , as:
‘any tender which, in all respects, complies with the
specifications and conditions of tender as set out in the tender
document.’
[51] It is a well -established principle that organs of state are only allowed to evaluate
bids that are regarded as ‘acceptable’ or responsive. Responsiveness is thus the
first hurdle that bidders need to overcome.6 A bid only qualifies as responsive if it
meets all the requirements as set out in the bid document. A tenderer who
disregards mandatory bid requirements cannot complain if its bid is declared non -
responsive. Mandatory requirements are those requirements that are a sine qua
non for further consideration in the evaluation process. Non -compliance with
mandatory requirements can be glaring, but the determination of acceptability
involves not only a consideration of responsiveness to bid formalities but
compliance with the substantive requirements outlined in section 217(1) of the
Constitution.
6 See Volmink, P. Legal consequences of non-compliance with bid requirements (2014) 1 APPLJ 41-60.
[52] In determining whether a bid is responsive, an organ of state is bound to ensure
that the decision -making process is lawful, reasonable, and procedurally fair.
Administrative action is considered lawful, reasonable and procedurally fair when it
is taken within the bounds of the law, is based on rational decision -making
considering all relevant factors and follows procedures that include proper
consultation and an absence of bias. Essentially the decision -making process must
be transparent , impartial and justified by the facts and the applicable law. A
tenderer is entitled to constitutionally compliant administrative action in every
phase of its tender being considered, whether it is considered for responsiveness
or being evaluated after having been found to be responsive.
[53] It is trite that fair administrative process ‘depends on the circumstances of each
case.’ In Metro Projects CC and Another v Klerksdorp Local Municipality and
Others7 Conradie JA said:
‘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.’
[54] From the facts of this case we know that SANRAL declared Ndodana’s tenders
non-responsive because of what SANRAL considered to be the too low prices
contained in the pricing schedule. Ndodana complains that SANRAL never
informed it of the nature of the risk posed by its tender. I do not agree that
Ndodana was left in the dark regarding the risk SANRAL identified. Already in the
letter dated 9 March 2023, SANRAL informed Ndodana that very high -rate items,
7 2004 (1) SA 16 (SCA) at para 13.
and very low -rate items are a cause of concern as this may constitute ‘a
considerable financial risk’.
[55] SANRAL, however, never explained , by provid ing a factual basis , its conclusion
that the rates quoted by Ndodana could not economically stand by themselves for
the contract specification and scope deliverables. An organ of state must justify
and provide reasons for taking a particular decision. This comprises of the
conclusion reached as being the ‘reason’ for the decision, but also the facts and
other relevant considerations that formed the basis for the conclusion to be
reached. It is trite that a distinct ion is drawn between the reasons for a decision
and ex post facto justifications for a decision. In review applications , organs of
state are bound to the reasons provided to parties for the impugned decisions , they
cannot rely on ex post facto justifications for the decisions. It is the actual reasons
that underpinned a decision that has to withstand judicial scrutiny.
[56] In its letter of 10 May 2023, SANRAL provided very specific reasons for its
decision. The reasons did not include that Ndodana omitted to tender for whole
portions of the work, or that Ndodana’s past involvement in the maintenance of the
Gauteng Freeways indicated that the quality of its work has decreased, or that
SANRAL faced any financial risks due to low prices quoted and accepted in the
past, or that the prices quoted in the past by Ndodana were substantially higher
than the prices quoted now. In this review application, I am only concerned with the
reason(s) SANRAL actually proffered for its decision to declare Ndodana’s tenders
unresponsive.
[57] The first question that came to mind was, on what basis did SANRAL conclude that
Ndodana’s prices were not market -related and in fact, too low. If all the bids are
considered it is evident that while Ndodnana’s bids were amongst the lowest, it
was not disproportionally low if measured against the majority of the tenders.
Given the factual circumstances , SANRAL could not reasonably have concluded
that Ndodana ’s tenders are not economically viable and posed a risk in that it may
be difficult for the tenderer to sustain a thirty -six (36) month contract without doing
a proper risk analysis . Although SANRAL’s counsel submitted that such risk
analys is was done, the rule 53 record and the evidence before the court do not
substantiate such submission.
[58] SANRAL ‘s decision to declare the tenders non -responsive was clearly influenced
by its interpretation that Tender Clause 2.1.10 requires that for a tender to be
responsive the rates provided in each line item should economically stand by
themselves. The Supreme Court of Appeal held in Chairperson: Standing Tender
Committee and Others v JFE Sapela Electronics (Pty) Ltd and Others (“JFE
Sapela ”)8 that ‘the failure to price each and every item in the schedule of quantities
would not necessarily be fatal to a tender.’9
[59] The qualification of ‘not necessarily’ is a clear indication that something more is
required for a bid not to be acceptable tha n the mere fact that individual line items
do not economically stand by themselves. The nature of the works tendered, for
example, would be one of the factors that need to be considered. SANRAL never
explained to Ndodana why it was of the view that the rates provided could not
economically stand by themselves for the contract specification and scope
deliverables. My attention was also not drawn to any portion in the rule 53 record
where the BEC engaged in a discussion, or were afforded the benefit of an
expert’s views, regarding this aspect.
[60] I agree with Ndodana that a reading of the tender document as a whole, in its
entirety, does not support a finding that Tender Clause C2.1.10 required that the
rates provided in each line item should economically stand by themselves.
Imposing this requirement ex post facto in itself is a reason to review and set aside
the impugned decisions.10
[61] SANRAL placed heavy reliance on Clause 2.1.10 of the CIDB that provides that:
‘a tender may be deemed non -responsive if the unit rates or lump
sums for some of the items in the pricing schedule are, in the
8 2008 (2) SA 638 (SCA).
9 JFE Sapela, supra , at 645C.
10 Rail Refurb, supra , at para [29] .
opinion of the employer unreasonable or out of proportion and if
the tenderer fails, within a period of seven days of having been
notified in writing by the employer to adjust the unit rates or lump
sums of such items, to make such adjustments’
[62] The employer concerned is, however, obliged to define the parameters of what it
deems ‘unreasonable’ or ‘out of proportion’ and provide well -grounded reasons for
its view and why ‘it was in the employer's opinion’ unreasonable or out of
proportion. Reasonable grounds must exist for the employer to have formed this
opinion, and these grounds should have been communicated to the affected
bidders. The Constitutional Court has ruled in relation to an ‘is satisfied’ clause, in
the light of the right to reasonableness, ‘[m]or e is required if the decision -maker’s
opinion is challenged on the basis that the precondition did not exist. The decision -
maker must now show that the subjective opinion … was based on reasonable
grounds.’11 In a constitutional dispensation guided by constitutional imperatives of
openness and accountability, an administrator should demonstrate that it took all
the relevant considerations into account.12 Neither the letter dated 10 May 2023
that contains SANRAL’s reasons, nor any portion of the rule 53 record provided to
me reflects the reasonable grounds, or any grounds for that matter, on which
SANRAL could base its subjective opinion, that the unit rates tendered were
unreasonable or out of proportion.
[63] It is ironic that Inform Practice Note #5 sets out the manner in which tender offers
are to be evaluated in terms of the Standard Conditions of Tender when using the
competitive selection procedure. It specifically deals with instances where the
tendered sum is regarded as being unduly low and considered to compromise the
ability of the contractor to complete the project ‘i.e. [when] it presents an
unacceptable commercial risk to the employer or the tenderer has insufficient
capital to perform the contract’.
[64] Informed Practice Note #5 provides that in such circumstances –
11 Wadele v City of Cape Town 2008 (6) SA 129 (CC) at para [60].
12 See Penfold, G. and Hoexter, C. The treatment of facts in administrative -law review (2024) SALJ 14(3),
496-525. Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004 (4) SA 490 (CC) at para [103].
‘A professional estimate or the average price tendered may be
used as an indicator (benchmark or market price) of this, but not
as an absolute criterion by which a tender may be overlooked.
Any decision reached in this regard should be established on a
case -by-case basis. … Alternatively, the tenderer may have to be
called upon to demonstrate his or her ability to complete the
contract for the sum tendered in terms of clause C2.18.
Before rejecting a tender on the grounds that it is abnormally low,
the employer should request in writing details of the constituent
elements of the tender which it considers relevant, …’
[65] Fairness would have prevailed if Ndodana was called up to demonstrate its ability
to complete the contract for the sum tendered before its tender was declared non -
responsive, as this was effectively the reason proffered by SANRAL for declaring
Ndodana’s bid non -responsive.
[66] SANRAL, in addition, failed to indicate where in the tender documents it was set as
a material requirement that rates quoted in each line item, had to stand by itself for
payment of work done.
[67] To summarise, Ndodana stated upfront that its prices were low, and justified the
prices when the tender was submitted. There is no indication that SANRAL gave
such justification any consideration. The same applies to the justification provided
subsequent to SANRAL’s price justification letters. Although it is true that a
tenderer cannot expect that discussion or consultations between itself and the
employer continue indefinitely, and although it is equally correct that the employer
is still entitled to its own opinion, w hich may differ from the tenderers after such
engagements occur, adherence to the audi et alteram principle dictates that the
record in review proceedings reflect that submissions by a tenderer were
sufficiently considered.
[68] The factual matrix of the tender, and in particular in light of Ndodana being the
incumbent consultant and having been so for the past 25 years, f airness requires
that the administrator or employer provides a factual basis for its conclusion that a
tender does not comply with the conditions and scope requirements of the tender
and for its view that the rates provided ‘could not economically stand by
themselves for the contract specification and scope deliverables in question. ’
SANRAL had to do a risk assessment before it could conclude that the amounts
tendered by Ndodana were too low to sustain the contract for thirty -six months.
This risk assessment had to be properly recorded and SANRAL ’s mere ipse dixit
that a risk assessment was done, is insufficient.
[69] On a reading of the papers the impression is formed that both SANRA L and
Ingerop is of the view that Ndodana’s past involvement and experience relating to
the maintenance of the Gauteng Freeways should not be considered at all.
[70] There is no rational basis for such a perception. Tenders should , among others, be
cost-effective , and if a party who is doing good work adheres to ethical norms and
indicates that it will not charge for executing functions it need not execute because
of the scope of its current knowledge of the project, it cannot be regarded as
predatory pricing or unhealthy competition. Public funds are utili sed for funding
SANRAL’s projects. A cost -effective tender cannot be disregarded just because of
a competitive edge obtained by an incumbent contractor whose tender meets the
tender requirements.
[71] Quinot explained that past experience and the profile of the supplier including
factors such as the qualifications and experience of the personnel, management
structures , capacity, and resources, might be equally relevant to a particular
bidder’s ability to perform under the contract (as qualification criteria) and the merit
of that bidders bid compared to other bids (as award criteria). He continues to state
that the notion of responsiveness can be viewed as both distinct from and
overlapping with that of qualification.13
13 Quinot, G. The Role of Quality in the Adjudication of Public Tenders (2014) 17 (3) PELJ 1109 -1136.
[72] To answer to a submission made by Ingerop, if an incumbent contractor meets the
functionality and preference criteria and has a reputation of providing good
services at low -cost effective prices, and is able to tender lower rates because it
knows the business inside out, can save on certain aspects because it is already in
the game and doing the work, and is ethical not to double -dip by claiming for
expenses it need not incur because it is the incumbent contractor who incurred the
costs concerned in the pas t, such a contractor’s bid cannot without more be
declared non -responsive. The facts in JFE Sapela , is in my view, distinguishable
from the facts in this matter, and as stated above, SANRAL did not proffer as a
reason for its decision to declare Ndodana’s tenders non -responsive, that Ndodana
failed to quote for entire sections of the work , or that it failed to submit comparable
offers.
Miscellaneous
[73] Mr. Hlahla , the Regional Manager of the Northern region, deposed to SANRAL’s
answering affidavit Although Mr. Hlahla explains that the averments which he
deposed to fall in his personal knowledge and where matters on which he relies do
not fall within his personal knowledge have been made available from the records
in his control and were verified by officials within SANRAL. I find it problematic,
however, that Mr. Hlahla does not explain his involvement in the affairs of the BEC.
If one has regard to the two minutes of the BEC that were attached to the papers,
Mr. Hlahla was not present at either of the meetings. His evidence relating to
aspects not covered in the documentation that forms part of the rule 53 record thus
constitutes hearsay.
[74] The only confirmatory affidavit that accompanied SANRAL’s answering affidavit
was the affidavit of Ms. N. Faku. The affidavit was primarily filed to answer
Ndodana’s allegations that SANRAL failed to inform them that the bids were
awarded to Ingerop despite them specifically raising a query in this regard. Ms.
Faku stated that she confirmed the process that was followed in the procurement
process as set out by Mr. Hlahla.
[75] The court is uncertain of Ms. Faku’s role in the whole process. She claims to be
employed by SANRAL with the supply chain unit. From the minutes of the first BEC
meeting it seems as if Ms. Faku was a voting member of the BEC. She did not
state her position as being a member of the BEC, however. In any event, she did
not attend the second BEC meeting where the impugned decision to declare
Ndodana’s bid non -responsive, was made. She also does not shed any light on
any risk assessment that was undertaken, what the market -price yardstick was
against which the tenders were measured, or how this yardstick was determined.
One would expect Ms. Faku to explain how the BEC dealt with Ndodana’s cover
letter. She remained silent on those aspects. The one line in her affidavit
confirming the contents of Mr. Hlahla’s affidavit in so far as it deals with the
process that was followed in the procurement process, is wholly insufficient to
substantiate Mr. Hlahla’s remarks. His answering affidavit contains for the biggest
part hearsay that is wholly unsubstantiated and inadmissible. This is highly
relevant and detrimental to SANRAL’s case, as the hearsay, amongst others,
encompass SANRAL’s claim that Ndodana’s justification letter was adequately
considered and a proper risk assessment was done, while there is not a shred of
evidence relating to such analyses or consideration on the record provided. This
court regards with disapproval the evidence presented by SANRAL, as the best
evidence would have been evidence from the mouths (or pens) of the members of
the BEC, and preferably the chairperson of the BEC, which evidence should, at
least, had to be supported by transcribed records of the virtual proceedings that
took place.
[76] SANRAL is reminded that the Constitutional Court has clarified that the record
includes deliberations of the decision -making body.14 It consists of ‘the documents,
evidence, arguments and other information’ before the administrator at the time
and includes ‘every scrap of paper throwing light, however indirectly, on what the
proceedings were, both procedurally and evidentially.’15 Reliance on R v
Dlumayo16 in justifying the absence of reasons is misplaced.
14 Helen Suzman Foundation v Judicial Services Commission 2018 (4) SA 1 (CC) at paras [22] -[27].
15 Johannesburg City Council v The Administrator, Transvaal (1) 1970 (2) SA 89 (T) at 91G -H.
16 1948 (2) SA 677 (A) at 702.
[77] Ingerop gallantly attempted to shoulder SANRAL’s responsibility to substantiate
the impugned decisions, although Ingerop has a direct interest in these
proceedings, Ingerop cannot testify to the BEC’s frame of mind when the
impugned decisions were taken.
Appropriate relief
[78] In addition to having the impugned decisions set aside and reviewed, Ndodana
seeks this court to declare its bids responsive, and to remit the decision on who
should be awarded the tenders to SANRAL. Ndodana wants the BEC to reconsider
its bids on the one hand and Ingerop’s bids on the other.
[79] SANRAL wants all three tenders to be scrapped, and for the whole process to start
afresh.
[80] The tender was advertised for the work to commence on 1 December 2023 for a
period of 36 months. Due to the protracted review proceedings, Ndonana’s existing
contracts were sporadically extended to ensure that the Gauteng Freeways were
maintained. The contracts were not awarded, and the three -year period has thus
not yet commenced. Due to the effluxion of time and the variables that affect the
real value of money, it is just for the whole tender process to commence afresh. It
might also be that SANRAL wants to extend its tender requirements to inform all
potential bidders of the benchmark against which tender pricing will be evaluated
to ensure that a competitive process ensues. The mere fact that Ingerop was the
only tenderer whose tender was not found non-responsive in two of the tenders
and one of two in the third tender, is indicative thereof that the system as a whole
was not competitive.
[81] The three tenders thus stand to be set aside and remitted to SANRAL to start the
tender process afresh.
[82] As for the interim, the principle of the separation of powers prevents this court from
stepping into SANRAL’s shoes to decide the way forward and to conclud e
contracts for SANRAL for the interim. SANRAL is to engage in fair administrative
decision -making in dealing with the practical effect of the tender s being remitted .
Costs
[83] This review could have been concluded a long time ago if SANRAL diligently
provided the record of the proceedings. SANRAL, however, throughout the review
proceedings, failed to adhere to timelines prescribed in the Uniform Rules of Court,
court orders, directives issued by the court , or agreed among the parties.
[84] SANRAL’s lackadaisical approach to the litigation extended the duration of the
review proceedings and was a hurdle in the way of an expeditious review. It put its
opponents under immense pressure. As a token of the court’s dissatisfaction with
the manner in which SANRAL conducted itself , a punitive costs order stands to be
granted.
ORDER
In the result, the following order is granted:
1. The first respondent’s decision s to declare first to third applicants’ tenders
for the following contracts:
a. SANRAL X.002 -160-2023/IF (Toll) and X.002 -161-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route N4 Section 1, N4 Section 11 & 12, N4 Section 21, R21
Section 2, R104 Sections 1 & 2 and R 573 (Tshwane Freeway RRM);
b. SANRAL X.002 -162-2023/1F (Toll) and X.017 -010-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route N1 Section 19, N1 section 20, N1 Section 21, N3 Section 2,
N12 Section 18 and N17 Section 1(Johannesburg Freeway RRM);
c. SANRAL X.002 -163-2023/IF (Toll) and X.003 -161-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route R 21 section 1& 2, N 12 Sections 18 & 19, N3 Sections 11 &
12 and N17 Section 2 (Ekurhuleni Freeway RRM);
non-responsive are reviewed and set aside;
2. The first respondent’s decisions to award the tenders for the following contracts:
a. SANRAL X.002 -160-2023/IF (Toll) and X.002 -161-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route N4 Section 1, N4 Section 11 & 12, N4 Section 21, R21
Section 2, R104 Sections 1 & 2 and R 573 (Tshwane Freeway RRM);
b. SANRAL X.002 -162-2023/1F (Toll) and X.017 -010-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route N1 Section 19, N1 section 20, N1 Section 21, N3 Section 2,
N12 Section 18 and N17 Section 1(Johannesburg Freeway RRM);
c. SANRAL X.002 -163-2023/IF (Toll) and X.003 -161-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route R 21 section 1& 2, N 12 Sections 18 & 19, N3 Sections 11 &
12 and N17 Section 2 (Ekurhuleni Freeway RRM);
to the second to fourth respondents are reviewed and set aside.
3. The tenders for the contracts:
i. SANRAL X.002 -160-2023/IF (Toll) and X.002 -161-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route N4 Section 1, N4 Section 11 & 12, N4 Section 21, R21
Section 2, R104 Sections 1 & 2 and R 573 (Tshwane Freeway RRM);
ii. SANRAL X.002 -162-2023/1F (Toll) and X.017 -010-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route N1 Section 19, N1 section 20, N1 Section 21, N3 Section 2,
N12 Section 18 and N17 Section 1(Johannesburg Freeway RRM);
iii. SANRAL X.002 -163-2023/IF (Toll) and X.003 -161-2023/1F (Non -Toll) for
Consulting Engineering Services for the Routine Road Maintenance of
National Route R 21 section 1& 2, N 12 Sections 18 & 19, N3 Sections 11 &
12 and N17 Section 2 (Ekurhuleni Freeway RRM);
are remitted back to the first respondent to start the tender process afresh.
4. The costs of the first to third applicants and the second to fourth respondents are
to be paid by the first respondent on attorney and client scale, such costs to
include the costs of two counsel where so employed .
E van der Schyff
Judge of t he High Court
Delivered: This judgment is handed down electronically by uploading it to the
electronic file of this matter on CaseLines.
For the first to third applicant s: Adv. K. Hopkins SC
Instructed by: Fairbridges Wertheim Becker
For the first respondent: Adv. D. Mtsweni
Instructed by: MB Tshabangu Incorporated
For the second to fourth respondents: Adv. N. Schnellenburg SC
With: Adv. J.J. Buys
Instructed by: York Attorneys Incorporated
Date of the hearing: 18 February 2025
Date of judgment: 27 February 2025