Gong Lu Maintenance Services (Pty) Ltd v City of Tshwane Metropolitan Municipality and Others (053301/2024) [2025] ZAGPPHC 892 (21 August 2025)

68 Reportability

Administrative Law

Brief Summary

Administrative Law — Tender process — Review of decision not to award tender — Applicant recommended as highest scorer by Bid Evaluation Committee — Bid Adjudication Committee's decision not to award based on alleged absence of budget confirmation and lack of cost-benefit analysis — Court finds reliance on these grounds constituted irrelevant considerations and failure to act fairly — Decision reviewed and set aside, matter remitted for reconsideration in accordance with legal requirements.

Comprehensive Summary

Case Note

Gong Lu Maintenance Services (Pty) Ltd v City of Tshwane Metropolitan Municipality and Others

(053301/2024) [2025] ZAGPPHC __ (21 August 2025, Gauteng Division, Pretoria)

Reportability

Although the judgment itself has been marked “not reportable” by the court, the case is significant for practitioners in public-procurement and administrative-law for three interconnected reasons.

First, it revisits the structured approach laid down by the Constitutional Court in Allpay for assessing material irregularity under the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and illustrates its practical application at municipal level.

Secondly, it clarifies the limits on a Bid Adjudication Committee’s discretion to depart from a Bid Evaluation Committee’s recommendation, stressing that undisclosed or extra-statutory criteria (such as a belated “cost-benefit analysis”) cannot lawfully trump the published tender criteria.

Thirdly, the judgment contributes to the growing body of law that emphasises the purposive, rather than formalistic, assessment of compliance with treasury and constitutional requirements—particularly the requirement of budget confirmation—under section 217 of the Constitution.

Cases Cited

Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency and Others 2014 (1) SA 604 (CC)

Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province 2008 (2) SA 481 (SCA)

Logbro Properties CC v Bedderson NO 2003 (2) SA 460 (SCA)

Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 (3) SA 121 (CC)

Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd 2015 (5) SA 245 (CC)

Legislation Cited

Constitution of the Republic of South Africa, 1996 – section 217

Promotion of Administrative Justice Act 3 of 2000 – sections 1, 6, 8

Preferential Procurement Policy Framework Act 5 of 2000 – section 2(1)(f)

Rules of Court Cited

No specific Uniform Rule of Court was referenced in the judgment.

HEADNOTE

Summary

The applicant, Gong Lu Maintenance Services (Pty) Ltd (GLMS), sought review under PAJA of the City of Tshwane’s decision not to award a cleaning and horticultural tender (ED02-2023/24) despite GLMS having been recommended as the highest-scoring bidder by the Bid Evaluation Committee (BEC).

The Bid Adjudication Committee (BAC) declined to confirm the award, citing lack of written budget confirmation, absence of a cost-benefit analysis, and alleged procedural concerns, and instead resolved to re-advertise the tender. The municipal manager endorsed that stance.

Acting Judge Kekana held that the BAC’s reliance on irrelevant or inadequately substantiated considerations rendered the decision irrational and unlawful. The decision was set aside and the matter remitted to the BAC for fresh consideration consistent with PAJA and section 217 of the Constitution.

Key Issues

Whether the BAC’s refusal to award the tender complied with the mandatory requirements of PAJA and the constitutional procurement principles.

Whether the absence of a written budget confirmation and a cost-benefit analysis constituted material irregularities justifying cancellation of the tender.

Whether reliance on undisclosed factors amounted to taking into account irrelevant considerations under section 6(2)(e)(iii) of PAJA.

Held

The court held that the BAC’s decision was unlawful and irrational:

– The verbal budget confirmation met the substantive purpose of ensuring affordability; insisting on written proof was an immaterial formality.

– A cost-benefit analysis was not a tender requirement; its absence was an irrelevant consideration.

– Vague allegations about “replacement of reports” were never substantiated and thus could not justify the non-award.

Consequently, the decision was reviewed and set aside; the tender was remitted to the BAC for lawful reconsideration. Costs were awarded against the first and second respondents.

THE FACTS

The City of Tshwane issued tender ED02-2023/24 on 29 September 2023 for cleaning and horticultural services at the Fresh Produce Market and Marabastad Retail Market for three years. GLMS submitted a compliant bid and, on 13 December 2023, the BEC recommended GLMS as the preferred bidder after it achieved the highest score.

When the matter reached the BAC on 19 December 2023, the committee declined to award the tender, recording various concerns: missing written budget confirmation, lack of cost-benefit analysis, overlap with an existing GPM contract, uncertainty about audited financial statements, and allegations of report “replacement” during the BEC meeting.

On 31 January 2024, the municipal manager adopted the BAC’s recommendation. GLMS, aggrieved by the cancellation despite its top ranking, launched this review application, contending that the decision violated PAJA and section 217 of the Constitution.

THE ISSUES

The central legal question was whether the BAC’s decision constituted administrative action susceptible to review and, if so, whether the grounds advanced—particularly under section 6(2)(b), (d), (e)(iii) and (i) of PAJA—were established.

Closely linked was the enquiry into materiality: even if procedural deviations existed, did they undermine the procurement’s fairness, transparency, competitiveness, and cost-effectiveness as envisaged in section 217?

Finally, the court had to determine an appropriate just and equitable remedy under section 8 of PAJA: substitution versus remittal.

ANALYSIS

Acting Judge Kekana began by confirming that municipal tender processes are “administrative action” under PAJA. The court adopted the structured test from Allpay: factual existence of an irregularity, legal characterisation, and assessment of materiality.

Regarding the alleged lack of budget confirmation, the court reasoned that the purpose of requiring confirmation is to ensure funds are available. A verbal assurance satisfied that purpose; elevating the formal requirement of a written memorandum, in circumstances where funding was not genuinely disputed, was “an unduly formalistic approach.” Consequently, even if non-compliance existed, it was immaterial.

The BAC’s insistence on a cost-benefit analysis was scrutinised next. Because neither the tender documents nor any statutory instrument mandated such an analysis, its absence could not legitimately count against GLMS. Invoking it amounted to taking an irrelevant consideration into account, contravening section 6(2)(e)(iii) of PAJA and undermining transparency by introducing undisclosed criteria.

On the vague allegation of “replacement of reports,” the court faulted the BAC for failing to furnish particulars. Without specific evidence, the ground remained speculative. Principles of fairness require that an affected bidder be apprised of the case it has to meet; unsubstantiated suspicion cannot invalidate an otherwise regular evaluation.

Taken together, these findings led the court to conclude that the decision was not rationally connected to the purpose of the empowering provisions or to the information before the BAC, thus offending section 6(2)(f)(ii) as well.

REMEDY

Turning to remedy, the court invoked section 8(1)(c)(i) of PAJA. Although the BEC had clearly favoured GLMS, the court declined outright substitution, mindful of the principle in Trencon that substitution is exceptional and normally appropriate only where the outcome is a foregone conclusion.

Instead, the unlawful decision was set aside and the matter remitted to the BAC for reconsideration in light of the court’s findings. The first and second respondents were ordered to pay the applicant’s costs, including the costs of two counsel, on the ordinary party-and-party scale.

LEGAL PRINCIPLES

The judgment reinforces at least five doctrinal points.

Firstly, under section 6 of PAJA, a court must distinguish between factual irregularity, legal invalidity, and materiality; only materially non-compliant irregularities will justify judicial intervention.

Secondly, procurement organs may not rely on post-hoc or undisclosed criteria to undo a tender process; fairness and transparency anchor the evaluation to the published criteria.

Thirdly, the purpose-oriented approach articulated in Allpay means that rigid adherence to form is subordinate to achieving the constitutional objectives of fairness, equity, transparency, competitiveness, and cost-effectiveness.

Fourthly, a verbal confirmation of budget, if reliable and contemporaneous, can satisfy the requirement of proving availability of funds; a written formality, in itself, is not indispensable.

Fifthly, when a review ground is made out, a court must craft a just and equitable remedy; substitution remains the exception, with remittal preferred unless the factual record is complete and the outcome inevitable.