IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, M AKHANDA )
CASE NO.: 1241/2022
In the matter between:
SITHATHU FUNDING (PTY)LTD Applicant
and
THE ROAD ACCIDENT FUND 1st Respondent
SKG AFRI KA (PTY) LTD 2nd Respondent
GRAND SELECT 150 (PTY) LTD 3rd Respondent
FIDMRT(PT) LTD 4th Respondent
JUDGMENT
ZONO AJ:
Introduction
[1] The applicant instituted these proceedings for a relief more fully set out in the
notice of motion. The relief sought in the notice of motion is couched in the
following terms:
“1.1 That the first respondent’s decision to disqualify the applicant for
the tender for rented office space for the East London Regional
Office for a period of 5 (five) years, under tender number
RAF/20 21/00003(the tender) and to award the tender to the
second respondent be reviewed and set aside.
1.2 That any agreement entered into between the first and second
respondent as a consequence of the award of the tender and
relating to or associated with the award of the tender be
reviewed and set aside.
1.3 That the first respondent’s decision to award the tender to the
second respondent be substituted in terms of section 8 ( c)(ii)
(aa) of the Promotion of Administration Justice Act 3 of 2000,
with an order t hat the tender be awarded to the applicant.
1.4 Alternative to paragraph 3 above, that the matter be referred
back to the first respondent for the adjudication of the tender de
novo.
1.5. That the first respondent shall pay the costs of the review jointly
and severally together with any other party which opposes the
relief.
1.6. Further and/or alternative relief.” (sic )
[2] The application is opposed by the first and second respondents. Both
respondents delivered their answering affidavits to which the applicant
respectively replied. The matter came before court as a fully opposed matter.
[3] In support of its application th e applicant contends that pursuant to an
invitation to submit bids for the tender, the applicant, the second, third and
fourth respondents submitted bids for the tender. The tender was for rented
office space for first respondent ’s East London Regional Office for a period of
five (5) years and it was issued under tender number RAF/2021/00003. The
tender was awarded to the second respondent.
[4] According to the applicant the evaluation process of bids would consist of five
(5) phases, namely:
4.1 Phase 1: initial screening and bidders who comply with the
screening process will be evaluated on the mandatory
requirements.
4.2 Phase 2: mandatory evaluation where bidders who met the
mandatory requirement s will be further evaluated for technical
functio nal criteria.
4.3 Phase 3: technical/ functional evaluation where bidders who
score 60 or more points out of 100 points will be subjected to
site visits.
4.4 Phase 4: site visits where bidders who comply with all
requirements of the site visit will be fu rther evaluated on price
and B -BBEE.
4.5 Phase 5: price and B -BBEE evaluation of bids qualified as per
the preferential point system specified in the tender.
[5] The mandatory requirement s referred to in the evaluation phase were
prescribed by and in the bid document . Twelve mandator y requirements
prescribed by the bid document are the following:
5.1 A proposed lease agreement of five (5) years and full set of
clear black and white floor plans must be submitted,
5.2 The bidder must confirm that the building will be available and
ready for occupation within three (3) months of the bid award;
5.3 The bidder must confirm that the building offered i s as per the
South African Property Owners Association (SAPOA) - Grade A
or B.
5.4 The bidder must indicate whether it is the owner/ landlord or an
agent/broker and where the bidder is an agent or broker the
bidder must provide proof of the mandate if acting on behalf of
the owner or landlord;
5.5 Where a bidder is an agent or broker the bidder must confirm
that they are registered with the Estate Agencies Affairs B oard
and in possession of a valid fidelity fund certificate and provide a
certified copy of the EAAB registration and a certified copy of a
valid Fidelity Fund certif icate.
5.6 The building should have access for people with special needs/
disabil ity or make provisions for such (e.g. Wheelchair ramp);
5.7 The bidder must confirm that the exterior and shop front s
signage and branding will be allowable ;
5.8 The bidder mu st confirm the provision of a backup power supply
(generator) which must have adequate capacity to service all
sections of RAF rented space simultaneously during power
outage s.
5.9 The bidder must confirm that the building will make provision for
goods and passengers lifts (approximately 4 metres square d) for
easy access, where applicable. In case of a single storey
building the bidder will automatically comply with this item;
5.10 The bidder must confirm that the building will have ablution
facilities, including facilities for the physically disabled on every
level or make provision for such;
5.11 Proximity to public transport should be within public transport
routes; and
5.12 A minimum of 60 secure onsite parking, of which six will c ater for
physically disabled people, must be available in accordance with
municipal by -laws. Another 240 parking spa ces must be located
within a 1 km radius of the building on offer if not in the building
premises and confirmation of that must be included in the
proposal.
[6] It is of u tmost importance that failure to comply with all the mandatory
requirements shall le ad to disqualification . It was expected that a bidder
should comply will all the mandatory requirements to proceed to the next
phase.
[7] The third phase, namely technical requirements were divided into three to wit,
general building requirements, buildin g services and site accessibility.
7.1 With regard to general building requirement there had to be a
maximum of 60 secure onsite parking with 6 (six) to cater for
disabled people; 240 parking spaces allocated within a 1km
radius. The RAF should be given right of first refusal to any
additional parking that bec omes available to the landlord i n the
course of the five years and the accommo dation must be made
as a “ white shell” or provisions be made.
7.2 Regarding the building services, the office accommodation must
be fully air conditioned and ventilated; The spaces on offer must
have its own elect ric distribution board. The accommodation
must be OHS compliant and m ust have the following: fire
detection and preven tion, fire escape route, assembly points,
and signage and a double tier cable tray in ceiling voids or make
allowance for these .
7.3 With regard to site accessibility, accommodation must be on
consecutive floors from ground floor, the bidder will get full
points. The building should allow for separate entrance / exit to
and from the building by staff , clients and service providers. The
building must make provision for access control and allo w RAF
to implement their own access control as per the RAF
standard s.
[8] The s ite visit would not be scored. H owever, the outcome of the assessment
can inf luence the successful awarding o f the bid. The site visit would be
evaluated on site accessibility, building general requirements and building
services.
[9] The scoring matrix on site accessibility was as follows:
9.1 Accommodation on consecutive floors from ground floor up, eg
ground floor and floor 1 -5 15 points.
9.2 Ground floor and accommodation from any consecutive floors
and levels e .g. Ground floor and floo r 27-3 9 points.
9.3 No consecutive floors 0 points .
[10] It is noteworthy that bidders evaluated on the technical criteria must score a
minimum threshold of 60 out of 100 points to be considered for site visit to
confirm the infrastructure and be furthe r evaluated for price B-BBEE.
[11] Phase 5 entails price and B -BBEE evaluation of bids qualified as per
preferential point system in the RFB document. The p oints for pricing and B -
BBEE were in terms of section 1 of Preferential Procurement Policy
Framework A ct 5 of 2000.
[12] Applicant posits a case that it submitted two bids for two separate properties;
one at Drury Lane , East London and the other at Reese Street, East London
both in the total sum of R31 688 872.00. The applicant contends that it
submitted compliant bids by the closing date on 31st March 2021. The second
respondents bid was in the sum of R38 288 883.83 ; the third respondent in
the sum of R 42 759 116.08 and the fourth respondent in the sum of
R 107 632 953.00.
[13] The applicant prides itself for submitting the lowest bid. It was lower than the
second respondent ’s bid by the sum of R 6 600 011.83 .
[14] The applicant was advised in terms of an email received from the first
respondent that it had been shortlisted to be evaluated on -site inspections as
per the advertised bid document. The applicant was simultaneously advised
that the firs t respondent’s fi ve officials would be visiting applicant’s premises
based at 21 Drury Lane East London; and the site visit would take place on
04th May 2021. Applicant’s availability on 04th May 2021 was confirmed .
Indeed, site visit occurred and no material queries or questions were made by
first respondent at the site visit or thereafter.
[15] The applicant strongly submit s that its bid was compliant in every respect as
the site visit occurred at the property. The first respondent evaluated the
applicant’s bid and found it to be compliant during phase 1 (initial screening
process) phase 2 (mandatory requirement evaluation) phase 3 technical
/functional evaluation).
[16] Notwithstanding the above, on 01st March 2022 the applicant received a
correspondence from the first respondent advising that the applicant has not
been successful in its bid. The correspondence was couched in the following
terms: “ it is with regret to inform you that your company has not been
successful in this bid.” (sic)
[17] The applicant contends that its bid was the cheapest and would accordingly
have scored 80 points for price. For this contention the applica nt relies on the
provisions of S ection 217 of the constitution which provide thus:
“When an organ state in the national, provincial or local sphere of
gove rnment or any other institution identified in national legislation,
contracts for good s or services it must do so in accordance with system
which is fair, equitable, transparent, competitive and cost -effective.”
[18] The applicant further relies on section 2(1)( f) of Preferential Procurement
Policy Framework Act of 2000 (PPPFA) which provides thus:
“The contract must be awarded to the tenderer who scores the highest
points, unless objective criteria in addition to those co ntemplated in
paragraph ( d) and (e) justify the award to another tender er.”
[19] The applicant further contend s that it is a level 1 B -BBEE contributor and
would accordingly have scored 20 points for B -BBEE. Had the preferential
point system prescribed in the PPPFA and its Regulations been applied, the
applicant wo uld h ave scored 100 points and obviously have quali fied to be
awarded the t ender.
[20] The applicant make s emphasis on the aspect of two lifts. The applicant states
that the property offered has two lifts. The dimensions of the first lift are
1,139m x 1.529 m which calculate to 1.74 m2. The dimensions of the second
lift are 2m x 1,175m which calculate to 2,35m2. Applicant’s proposal contained
this information. The applicant insisted that it complied with mandatory
requirements. However, applicant’s bid scored 92 out of 100 for the technical /
functional evaluation, including parking and separate entrance/ exit to and
from the building ).
[21] The applicant records the first respondent’s summary of th e site visit or
inspection as follows:
“The lift is smaller than the required size. The building does not allow
for separate entrance/ exit to and from the building by staff, clients and
service providers as all these separate entrances lead to the same
reception. The proposed off -site parking is two blocks away. The
parkings are 100 in number and the rest of the parking bays are within
1 km radius and 1.3km away from the office . It will be impossible for
employees to park their cars and walk for 1.3 km to get to the office.
Spanning the entire distance to the off –site parking there are two taxi
ranks, one local and one long distance -that start right in front of the
main entrance of the building. This increases the chance of staff being
mugged or robbed, es pecially after hours. The parking is not
accessible because of the taxis that area stationed on the entrance full
time.”
[22] The applicant responds to the site inspection summary that it cannot be
correct that the lift is smaller than the required size as the checklist required
that it be reasonably sized. The applicant contends that the size of the li ft
offered (put together) is approximately the size stated in the checklist. The
applicant also makes a point that the first respondent was clearly satisfied
with the size of the lifts during the assessment of the mandatory requirements.
The applicant questions the change from fi rst respondent’s position during the
site visit.
[23] The BEC comment that the building does not allow for separate entrance/ exit
is wrong. In support of that t he applicant contends that all f our BEC members
stated on their respective checklists that the applicant’s bid complied with the
requirement of a separate entrance/exit from the building. It is corr ect that the
separate entrance l eads to the entrance foyer , however the requirement was
that separate entrances should be provided and not that they can not run
through a shared area. This aspect was a requirement in the functional
evaluation/ assessment.
[24] The applicant further contends that the checklist relating to parking required
parking spaces within 1 km radius from the building on offer. The applicant
offered in its bid the parking bays within a 1 km radius from the building on
offer and that was accepted by the first respondent. The applicant criticises
first respondent’s focus to the issue relating to the taxi ranks and alleged risk
to staff a s that is not a requirement of a tender and it i s outside the scope of
paragraph 6.11 of mandatory requirement dealing with proximity to public
transport which must be within public transport routes.
[25] The applicant concludes by stating that the first respondent’s decision relating
to the tender fall s to be review ed in terms of section 6 of the Promotion of
Administrative Justice Act 3 of 2000 (PAJA). The applicant takes stock on the
provisions of section 6(2) (iii) and /or 6(2) (c) of PAJA i n that the decision -
maker disqualified the applicant’s bid despite it complying with mandatory
requirements and functionality. These two provisions provide for the rev iew of
Administrative decision i f the decision -maker was bias or reasonably
suspected of bias; and i f the administrative action / decision was procedurally
unfair.
[26] The applicant contends that first respo ndent’s decision was taken for u lterior
purpose or motive1; because irrelevant consideration s were taken into
account or relevant consider ations were not considered2; because of
unauthorised or unwarranted dictates of another person or body3; and that
the decision was taken in bad faith.4 It is so, so the sub mission goes,
because the site vi sit was to simply confirm the infrastructur e of the
applicant’s bid, which infrastructure accorded with the applicant’s bid and
passed mandatory requirements of the tender.
[27] The applicant further relies on the provisions of section 6 (2)(f)(i) of PAJA
which provide that an administrative action is reviewable if it contravenes the
1 Section 6(2)(e)(i) of PAJA .
2 Section 6(2)(e) (iii) of PAJA .
3 Section 6(2) (e)(iv) of PAJA .
4 Section 6(2)(e) (v) of PAJA .
law or is not authorised by the empowering provision. The applicant further
relies on the provisions of section 6(2)( ii) (aa), (ii)(bb), (ii)(cc) and (ii)(dd) of
PAJA. The applicant contends that t he first respondent’s decision is
unreasonable in that no reasonable person could have taken it5 and that the
decision is unconstitutional and or unlawful6.
[28] The applicant seeks a substitution order on the basis that the documents that
are currently available to the applicant evidences that no purpose would be
served in referring the matter back to the first respondent.
[29] The first respondent opposed this a pplication by filing its answering affidavit.
First respondent’s answering affidavit is deposed to by its Acting Chief
Executive Offi cer. No confirmatory affidavits accompanying first respondent’s
papers were filed.
[30] The first respondent is adamant th at the applicant is not entitled to the relief it
seeks. Firstly, the first respondent contends that the applicant did not comply
with a mandatory lift requirement. The requirement was that the goods and
passenger s lifts (approximately 4m2) must be made av ailable or provided b y
the bidder. Applicant’s two lifts are respectively 1.54m2 and 2.36m2in size. At
site visit ( phase 4) the sizes of the lifts were verified and the applicant could
not proceed to the last phase, which is phase 5 entail ing price and B-BBEE
scoring .
[31] The first respondent goes further to set out the purpose of the size of the
requirement for the goods lift in its answering affidavit as fol lows:
“22. It is vital to mention that the size requirement for the goods lift
was not imposed merely to embellish the tender document. The
day-to-day operation of the RAF demands the handling, sorting,
filing and archiving of enormous volumes of documents , boxes,
5 Section 6(2)(h) of PAJA .
6 Section 6(2)(i) of PAJA .
files and the like. The required lift size was imposed to easily
move trolleys that re loaded with files, boxes and other goods. If
the relevant lift is sma ll, efficiency is compromised. O n other
words, it takes more time to accomplish the task of moving
things ”. (sic)
The size requirement is a product of the experiences that the RAF had had
from occupying other buildings, so the contention goes. The RAF tries to
improve its requirements based on previous procurements. It is on this basis
that applicant’s bid failed and as such it could not be scored on price and B -
BBEE (phase 5) .
[32] The first respondent further contends that the findings made on compliance
with the mandatory requirements before the site visit stage were provisional
and no t final. The information would be verified at the site visits stage (phase
4).
[33] The abovementioned version represents the summary of first respondent’s
case . The second respondent has opposed this application too. The second
respondent is the party in favour of whom the tender was awarded. In its
opposition of the matter, the second resp ondent raises various issues to
assail applicant’s case.
[34] The second respondent contends that the applicant intentionally delayed the
institution or prosecution of the present review application. According to the
second respondent t he delay is for ten (10) months , and therefore undue and
unreasonable. It contends that the delay is prejudicial to the second
respondent.
[35] An order interdicting implementation of the award was granted on urgent
basis on 12th May 202 2. The present application was heard on 21st April 2022,
whereas the two-part record was delivered to the applicant on 21st June 2022
and 28th July 2022 respectively. The first respondent confirmed on 22nd
August 2022 that it had submitted all the documents and it had nothing to add
to the record. Despite this , the applicant launched an application to compel.
This application was heard on 15th June 2023. The second respondent
contends that all of these were done to delay the hearing of the review
application. Acco rding to the second respondent the delay would benefit the
applicant as it would make profit out (rental) of the lease agreement it has with
the first respondent.
[36] The sec ond respondent contends that the applicant orchestrated all the
delays knowing fully well that a revi ew application can take months i f not
years to finalize and that is not even considering possible appeals. By
persisting with t he application to compel knowing t hat there was nothing to
gain the applicant extende d the time with which the RAF is forced to stay in its
tendered property even more.
[37] With regard to the merits of the case, the second respondent den ies that
applicant’s bid was compliant a s it failed to comply with certain mandatory
requirements. Although the applicant was responsive regarding phase 1,
phase 2 and phase 3, it did not comply with the requirements of phase 4,
being the site inspection. There is a difference between being responsive on
paper i.e . what i s said in a bid and being compl iant. The second respondent
supports first respondent’s version that applicant’s non -compliance with phase
4 of the evaluation was fatal to i ts bid. Second respondent contends that there
are three mandatory requirements applicant failed to comply with.
[38] With regard to entrance requirement the second respondent contends that
comments of the BEC m embers demonstrate that applicant’s bid did not
comply, notwithstanding that the BEC members ticked the yes box on the
checklist. The cited comments are the following:
“All entrances leading to the same [foyer] where the lifts are. Large
goods [furniture etc.] delivered at front door - public & [street] entrance.
All separate entrances lead to one central point which is to [reception]
single entrance to the building.
All 3 separate entrances lead/ converge to 1 foyer[at] reception area
that serve [as] the only entrance at the building.”
[39] The same logic and procedure occurred when dealing with parking
requirement. BEC members ticked the yes box next to the parking
requirements. However, their comments demonstrated that the applicant did
not comply with the parking requirements. It would be irra tional to ignore the
comments made by the BEC members.
[40] Second respondent contends that the applicant offered 240 parking bays to
be located within one km from the proposed building. A t least 120 of the
required 240 off -site parking bays are situated on the premises known as
Deals House which is owned by East London Property One (ELPO). Second
respondent’s holding company, Ship Knot Investment 777 (Pty) Ltd is the
100% shareholder of ELPO since July 2021. Based on the aforesaid, the
second respondent c onfirm s that the parking bays situate d at Deals House
and which forms a substantial part of applicant’s offer are not available for use
by RAF as offered by applicant.
[41] Quite apart from the Deals House parking bays offered by applicant , it
appears tha t the applicant offered parking bays situated on Buffalo City Local
Municipality Property. There is no evidence that the applicant obtained
consent from the Municipality for use thereof. Lease agreement seem to exist
between the applicant and the Municipal ity.
[42] Regarding the lift requirements , mem bers of BEC ticked the no box in this
respect and added their comments that are unfavourable to the applicant’s
bid. The first respondent conducted the evaluation process regularly. It was
the responsibility o f the first respondent to determine what entails the
reasonable size of the lift. If the bid does not meet the requirement s, then the
bid does not comply.
[43] The second respondent make s a point that applicant’s bid was correctly
excluded from evaluation before the final scoring because it did not comp ly
with mandatory requirements. Bidders were required to pass phases one to
four before they could be evaluated on price and B -BBEE. Th e legal position
does not provide that the cheapest bid must be accepted notwithstanding its
non- compliance with the tender requirements. Given that the applicant failed
to comply with a requirement of a site visit the applicant could not advance to
the final phase of the evaluation process, phase 5. The applicant was
disqual ified and could not be awarded the tender. The second respondent
contends that the deviation s by the applicant are material.
[44] There are other mandatory requirement s that were not complied with by the
applicant. Tender invitation required that a bidder must indicate whether it is
the owner/ landlord or an agent / broker, and where the bidder is an agent or
broker, the bidder must provide proof of mandate if acting on behalf of the
owner/landlord. The applicant indicated that it is a landlord but in the same
vain the applicant’s bid demonstrated that applicant is not the owner. A s a
corrollary the applicant could not be a landlord if it is not the owner of the
property. At best the applicant wa s an agent acting on behalf of the owne r/
landlord , so the contention goes. There wa s accordingly no mandate from the
owner of the relevant property authorising the applicant to represent it in the
tender proces s.
[45] The same property was offered by a company called Milestone Properties in
another tender (Tender No: SCM U5-21/22 -0086). The second respondent
participated in this tender. The tender related to the office accommodation for
the Department of Sport Recreation, Arts & Culture in East London. In
addition to the issue of mandate and authorisation the second respondent
takes an issue relating to t he availability of the space to house both the RAF
and the Department of Sport, Recreation, Arts and Culture in East London.
Analysis and Discussion
[46] This matter relates to the procurements processes and procedures. In this
regard Section 217 of the Constitution provides thus:
“1. When an organ of stat e in the National Provincial or l ocal sphe re
of government identified in n ational legislation, contracts for
goods or services, i t must do so in accordance with a sy stem
which is fair, equitable, t ransparent, competitive and cost-
effective.”
[47] With a view to achieving thi s constitutional purp ose, the first respondent
advertise d an invitation to bid for the tender. The applicant and the second
respondent were part of the bidders who responded to the invitation and
ultimately participated in the bid process. Twelve mandatory requirements
were prescribed in the bid invitation . In what follows I set out twelve
mandatory requirements implicated herein. They are contained in Clause 6.9
and 6.12 the bid document respectively.
[48] Clause 6.9 of the bid document is worded as follows:
“Mandatory
6.9 The bidder confirms that the building will make provision for
goods and passengers lifts (approximately 4m2) for easy access,
where applicable. In case of a single story building, the bidder
will automatically comply on this item .” Elsewhere in the same
tender document it is provided that “The goods lift where
possible to be reasonable sized (approximately 4m2)”.
[49] Anent to this mandatory requirement applicant ’s proposal is worded thus:
“6.1.9 Goods and Passenger lifts
The bidder confirms that the building will make provision for a goods
and passenger s lifts for easy access, where applicable.
The bidder confirms that the building is multi -story and that in light of
the aforementioned, the bidder’s compliance with this requirement is
evident fro m the above.
There are n o specific ally designated goods lift , as two passenger lifts ,
at a centralized position , in the building are capable of being used
interchangeably for both passengers and goods. The dimensions of the
lifts are as follows :
“Lift 1: 1.139 x 1.529 by 2.4m high
Lift 2: 1.175 by 2.35m high
With a weight bearing capacity of 630 kg and 1050 kg respectively. The
bidder attached hereto invoices, attached as ANNEXURE “23” to
substantiate the current lifts in the building. The ongoing maintanance
of same a nd the condition of said lifts.” (sic)
[50] The point of departure should be interpretation o f Clause 6.9 of the first
respondent’s mandatory requirements attached to the bid or tender invitation.
Wallis JA in the Endumeni Municipality7 made the following observation:
“18. Interpretation is the process of attributing meaning to the words
used in a d ocument, be it legislation, some other statutory
instrument, or contract, having regard to the context provided by
reading the particular provision or provisions in the light of the
document as a whole and the circumstances attendant upon its
coming into e xistence. Whatever the nature of the document,
consideration must be given to the language used in the light of
the ordinary rules of grammar and syntax; the context in which
the provision appears; the apparent purpose to which it is
directed and the mater ial known to those responsible for its
production. Where more than one meaning is possible each
possibility must be weighed in the light of all these factors. The
process is objective not subjective. A sensible meaning is to be
preferred to one that leads to insensible or unbusinesslike
results or undermines the apparent purpose of the document.
Judges must be alert to, and guard against, the temptation to
substitute what they regard as reasonable, sensible or
businesslike for the words actually used. To do so in regard to a
statute or statutory instrument is to cross the divide between
7 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) Para 18 .
interpretation and legislation. In a contractual context it is to
make a contract for the parties other than the one they in fact
made. The ‘inevitable point of departure is the language of the
provision itself’, read in context and having regard to the
purpose of the provision and the background to the preparation
and production of the document.”
[51] Below Clause 6 of the bid or tender document the following words are
apparent:
“Note: Failure to comply with all the mandatory requirements shall lead
to disqualification ”
Clause 2.4 thereof provides:
“Bidders who do not comply with the mandatory requirements will not
be considered .”
Ordinary grammatical meaning of the words used must be adhered to and can
only be departed from if that leads to an absurd result.8 It is not far to seek
that Clause 6 contains peremptory provisions . It is plai n from the plain
meaning of the Caveat in Cla use 6 that the requirements are peremptory.
Infact the words “ mandatory requirements” denote that the requirements are
mandatory or peremptory. It is therefore impliedly provided that all the
mandatory requirements must be complied with. It is expressely provided that
failure to comply with all the mandatory requirements shall lead to
disqualification. It flows f rom this that all mandatory requirements are material.
[52] The Constitutional Court in All Pay Consolidated Investment Ho ldings9
8 Cool Ideas 1186 CC v Hubbard and another 2014 (4) SA 474 (CC), 2014 (8) BCLR 869 (CC) Para
28
9 All Pay Investment Holdings (Pty) Ltd & Others v Chief Executive Officer, South African
Security Agency and others 2014 (1) SA 604 (CC) Para 30
“30. Assessing the materiality of compliance with legal requirements
in our administrative law is, fortunately, an exercise
unencumbered by excessive formality. It was not always so.
Formal distinctions were drawn between “mandatory” or
“peremptory” provis ions on the one hand and “directory” ones on
the other, the former needing strict compliance on pain of non -
validity, and the latter only substantial compliance or even non -
compliance. That strict mechanical approach has been
discarded. Although a number of factors need to be considered
in this kind of enquiry, the central element is to link the question
of compliance to the purpose of the provision. In this Court
O’Regan J succinctly put the question in ACDP v Electoral
Commission as being “whethe r what the applicant did
constituted compliance with the statutory provisions viewed in
the light of their purpose”. This is not the same as asking
whether compliance with the provisions will lead to a different
result .” (my emphasis)
[53] As a general ru le non -compliance with a peremptory results in a nullity10. A
requirement construed as peremptory usually needs exact compliance for it
to have the stipulated legal consequence and any purposed compliance
falling short of that is a nullity11. There is no ambiguity that a failure to comply
with the prescribed requirements could result i n a tender being disqualified. A
tender that fails to comply with the mandatory requirements equally fails to
comply with the definition of “an acceptable tender .” A tende r is not an
acceptable tender if it fails to comply with all mandatory requirements of a
tender.
[54] Preferential Procurement Policy Framework Act No 5 of 2000 (PPPFA) was
enacted to give effect to the provisions of Section 217 (3) of the Constitution.
PPPFA defines “acceptable tender” to mean “any tender which , in all respects,
10 LAWSA Vol 25 Page 399, Para 366
11 Shalala v Klerksdorp Town Council and another 1969 (1) SA 582 (T) at 587 A -C
complies with the specifications and conditions of tender as set out in the
tender document ”. The converse of this is that , a tender that does not comply
with specifications and conditions of the tender as set out in the tender
document is an unacceptable tende r.
[55] A precondition for an acceptable tender is compliance with specifications and
conditions of a tender as set out in the tender document. Preconditions or
conditions precedent are referred to as jurisdictional facts . Under common
law, necessary preconditions that must exist before an administrative power
can be exercised, are referred to as jurisdic tional facts. In the absence of such
preconditions or jurisdictional facts , the administrative authority effectively has
no power to act at all12. These facts are jurisdictional because the exercise of
power depends on their existence or observance as the case may be.13
Compliance with mandatory req uirements is a condition without which a
tender cannot be awarded. Satisfaction of all Mandatory requirements is a
jurisdictional requirement for the award of a tender to a particular complia nt
tenderer.
[56] Preferential Procurement Regulation s (Procurement Regulations) define a
tender as a written offer in a prescribed or stipulate d form i n response to an
invitation by an organ of state for the provision of services, works or goods,
through price quotation s, advertised competitive tendering processes or
proposals14. Applicant ’s tender complied with the definition of a tender.
However, it is doubtful that applicant’s tender was an acceptable tender.
[57] The mandatory requirements of an invitation to tender relating to lifts required
that “the bidder confirms that the building will make provision for goods and
passenger lifts”. The approximate size of the lifts is 4m2. The purpose of the
lift is for easy access.
12 Kimberly Junior School and another v Head of the Northern Cape Education Department and
others 2010 (1) SA 217 (SCA ); 2009(4) ALL SA 135 (SCA) Para 11.
13 Cora Hoexter: Administrative Law in South Africa, 2nd Edition, Page 290.
14 All Pay Investment Holdings (Pty) Ltd & Others v Chief Executive Officer, South African
Security Agency and other s 2014 (1) SA 604 (CC); 2014 (1) BCLR (1)(CC) Para 34 ; Regulation 1
of Preferentia l Procurement Regulation .
[58] The use of the plural “lifts” imply that there must be separate lift s for
passengers and goods. Each of the lift s must be approximately 4m2. It
appears that the applicant offered “two passenger lifts ” which are capab le of
being used interchangeably for both passengers and goods. The following
words are demonstrably clear in the applicant’s tender:
“There is no specifically designated goods lift, as two passenger lifts, at
a centralized position, in the building are capable of being used
interchangeably for both passengers and goods”.
[59] Reference to the size of approximately 4m2 is contemplated to be the size of
each lift. It is important to note that the requirement is further qualified in the
tender invitation or document as follows:
“The good s lift where possible to be reasonably sized (approximately
4m2)”.
It is plain that a reasonably sized lift that must be approximately 4m2 was
intended only for goods lift. It goes without saying that a separa te equal size
was required for a passenger’s lift.
[60] The applicant uneq uivocally offered the following dimensions of the lifts:
“Lift 1 : 1.39 x 1.529 by 2.4m high
Lift 2 : 2 x 1.175 by 2.35m high”.
These dimensions are diametrically smaller than the size contemplated in the
mandatory requirement relating to the lifts requirement . These are plainly not
compli ant. The lift dimensions’ simply do not meet the mandatory
requirements of the invitation.
[61] Sight must not be l ost of the fact that the lifts were intended for staff, client
and service providers of the first respondent . It is not unimaginable that an
institution or organ of state of first respondent’s magnitude has a huge staff
complime nt. In the light of the fact the first respondent , though it is a regional
office, but it serves the whole Easte rn Cape Province, i ts client base is
reasonably huge. Its magnitude should quintessentially equal its needs for
services of its service providers, who from time to time would need
conveyance by reasonably sized lifts.
[62] It is reasonably and possibly co rrect that the first respondent used its previous
experience s and procurements when formulating its mandatory requirements.
It surely knew what it wants and what it does not want. It is a common cause
that the first respondent is presently occupying applic ant’s premises.
[63] In All Pay Consolidated Investment Holdings(Pty) Ltd15
“The purpose of a tender is not to reward bidders who are clever
enough to decipher unclear directions. It is to elicit the best solution
through a process that is fair, equitable, transparent, cost -effective and
competitive . Because of the uncertainty ca used by the wording of the
Request for Proposals and Bidders Notice 2, that purpose was not
achieved in this case.” (my emphasis).
The best solution sought to be elicited inherently includes consideration s of
previous experiences and procurements .
[64] In Norland Construction16 Govin djee J h eld that :
“13. Importantly, it is for the department, as employer or institution
inviting the tender, to decide the prerequisites for a valid
tender . A failure to comply with prescribed conditions would
result in a tender being disqualified as an acceptable tender
15 All Pay Consolidated Investment Holdings (Pty) ltd and others v CEO SASSA 2014 (1) SA 604
(CC) Para 92 .
16 Norland Construction (Pty) Ltd v Chris Development Agency (SOC) Limited and Another
(18/2022) [2024] ZAECMKC 10 (23 January 2024) Para 13 .
under the PPPFA, unless those conditions were immaterial,
unreasonable or unconstitutional. Put differently, a tender should
not easily be invalidated on the basis that it contains minor
deviations that do not materially alter or depart from the
characteristics, terms, conditions and other requirements set out
in tender documents. Whether or not a deviation or qualification
is material is a question to be determined by the BEC in its
discretion, taking into account the set eligibility criteria ”.
(emphasis added)
[65] Consistently with the observation foreshadowed in Norland Construction
above, the tender invitation17 provides thus :
“2.4 Bidders who do not comply with the m andatory requirements will
not be considered .”
I, therefore , find that applicant’s tender or bid failed to comply with the
mandatory requirements of the t ender and the first respondent was justified in
disqualifying applicant’s tender as unacceptable tender. Mandatory
requirements are a determining factor and have an intrinsic value to the
tender process. Once there is a non -compliance therewith, the court should
look no further, but to find no f ault in the tender process and u ltimately dismiss
the application with costs. Accordingly, this application must fail only on this
ground with costs. It is therefore unnecessary to deal with other grounds as I
find t his ground dispositive of the matter.
[66] Having found that the application cannot succeed , the remaining i ssue i s that
of costs. The general rule is that costs should follow the result. I see no
reason for deviation from the general rule. Accordingly, costs should follow the
result. The applicant is liable to pay first and second respondent ’s costs.
17 Clause 2 .4 of tender invitation .
[67] A further remaining issue is the one of the scale of costs. Complexit y of the
matter, the amount involved or the monetary value of the te nder and the
voluminousness of the court documents and accompanying documents are
relevant factors necessary to be taken into account for determination of the
applicable and relevant scale.
[68] This matter satisfies all the factors mentioned above. The matter is clearly
complex and the competing tenders range between R31 688 872.00 to
R 38 288 833.83 . Third and Fourth respondent s respectively submitted
tenders in the respective sums of R42 759 116.08 and R 107 632 953.00.
This is clearly a seriou s matter, which con tained no less than five (5) le ver
arch files. The seriousness of the matter is evidenced by the employment of
Senior Counsel and Senior Juniors. Certainly Scale C is warranted in the
circumstances.
[69] In the result I would make the following order :
69.1 The applicat ion is dismissed.
69.2 The applicant is ordered to pay costs of this application on scale
C such costs to include costs of two Counsel where employed.
__________________ ______________
A.S ZONO
ACTING JUDGE OF THE HIGH COURT
APPEARANCES:
For the Applicant :Adv Watt
Instructed by :DRAKE FLEMMER & ORSMOND INC
Quenera Office Park
Beacon Bay
East London
Ref:AJ PRINGLE/VD/mat50899/T325(B)
C/O :JAGER LORDAN
2 Allen Street
Makhanda
Ref : Mr Tarr
Email:stuart@djlaw.co.za/
chantal@djlaw.co.za
For the First Respondent :Adv Van Der Berg SC with Adv Mabuza
Instructed by :THIPA ATTORNEYS
8C Norman Road
Bedford View
Germiston
Ref: MAT2991
C/O :NETTELTONS ATTORNEYS
118A High Street
Makhanda
Ref:Ms Pienaar
Email:daisy@netteltons.co.za
For the Second Respondent :Adv Pretorious
Instructed by :FOURIE VAN PLETZEN
Ref: F VAN PLETZEN/MAT7699
C/O NEVILLE BORMAN & BOTHA
22 Hill Street
Makhanda
Ref: Mr Powers
Email:justin@nb andb.co.za
rene@nbandb.co.za
Matter heard on : 10 October 2024
Judgment delivered on : 15 April 2025