SAFLII Note: Certain personal/privat e details of parties or witnesses have been redacted from this
document in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, EAST LONDON CIRCUIT COURT)
CASE NO: EL234/2025
In the matter between:
SNR ELECTRICAL CC Applicant
And
GEORGE LOCAL MUNICIPALITY 1ST Respondent
COASTAL ARMATURE WINDERS & SUPPLIERS 2nd Respondent
LUKHOZI CONSULTING ENGINEERS 3rd Respondent
JUDGMENT
Zono AJ:
Introduction
[1] The applicant is a close corporation duly registered as such in
accordance with the relevant legislation, also registered with
Construction Industry Development Board (CIDB) with contractor
grading categories of 4CE PE, 7EP,5EB and 7ME. The applicant
approached this court for a relief that is two pronged: Part A entails an
interim interdict against conclusion of any contract pursuant to the
award of tender number T[...] for provision of mechanical and
electrical maintanance and refurbishment of wat er and wastewater
infrastructure (the tender). It further entails interdict against
implementation and/or execution of any works contemplated in the
tender. Part A was disposed of in terms of the Judgment of Pitt AJ
which dismissed the application (interdi ct) and ordered each party to
pay its own costs. Nothing further need to be said about Part A hereof.
[2] What served before me is Part B of the application, which in essence
is a review application relating to, firstly, the award of the aforesaid
tender to the second respondent, Coastal Armature Winders and
Suppliers (Coastal); secondly, the third respondent’s, Lukhozi
Consulting Engineers (Lukhozi) report recommending to the first
respondent’s, (the Municipality) Bid Evaluation Committee (BEC)
that the aforesaid tender be awarded to Coastal and simultaneously
recommending the rejection of applicant’s tender; thirdly, the
decision of the Municipality’s BEC taken on or about 6 th November
and 26 th November 2024 and Bid Adjudicating Committee (BA C)
recommending the award of the tender to Coastal and further
recommending the rejection of the applicant’s tender on the ground
that it is not responsive; fourthly the Municipality’s decision to award
the aforesaid tender to Coastal . The applicant seeks the aforesaid
recommendations together with the decision to award the tender to be
reviewed and set aside in accordance with the provisions of section 6
of Promotion of Administrative Justice Act 3 of 2000 (PAJA). There
are other consequential and /o r ancillary relief sought in the notice of
motion, which shall be dealt with in due course, should need arises.
The application is opposed by the Municipality and (Lukhozi).
[3] The applicant’s case is that pursuant to tender invitation by the
Municipality, the applicant submitted its tender. The applicant alleges
that the tender complied with all the requirements i.e. mandatory
conditions and specifications and its offer was in the amount of R136
1423 491.26, whereas Coastal submitted tender offer of
R158 283 817.30. The applicant was scored 83 out of 100 points and
Coastal was scored 79 out of 100 points in respect of functionality
criteria. The minimum score requires to pass the functionality criteria
was 70 points out 100 points. Both the applicant’s and Coastal’s
tender would then be considered for stage 2, Price, Preference and
specific goals.
[4] The applicant alleges that the BEC failed to award to applicant the 80
points for price, preference and specific goals as the lowest acceptable
tender and that failure was a violation of conditions of tender, CIDB
standard for uniformity, preferential Procurement Policy Framework
Act 5 of 2000 and its regulations, the National treasury’s SCMP
regulations, the CIDB regulations. According to the applicant, an
invitation to tender required that tender be evaluated based on
responsiveness at stage 1, and then on the functionality criteria, Bids
that score less than 80 out of 100 points would be considered as non -
responsive, which is stage 2. Bids which score les s than 70 points out
of 100 points on functionality would not be capable of being
evaluated further in terms of section 2 of the PPPFA.
[5] On the 10 th December 2024 the applicant received a letter from the
Municipality advising it that its tender was unsuccessful. The reason
proffered for that decision was that Coastal scored the highest points.
The applicant alleges that it is impossible for Coastal to lawfully score
more procurement points than the applicant in the light of the amounts
tendered. According to the applicant the Municipality and Lukhozi
substituted applicant’s tender amount with their own when they do not
have authority to do that. The ap plicant’s tendered amount was
substituted with R161 239 446.04. The applicant lodged an internal
objection which became unsuccessful.
[6] The applicant further contends that the BEC did not evaluate the
tender, but simply rubberstamped Lukhozi’s report. The fact that the
BEC adopted the remarks contained in Lukhozi’s report is borne out
by the similarities that are glaring between the BEC minutes and
Lukhozi’s report. The BEC minutes mirror the contents of Lukhozi’s
report. The applicant further contends that Lukhozi’s report provided
a misrepresentation of applicants rates used in the tender when
considering the reasonableness of the applicant’s rates and Bills of
Quantities (BOQ). The applicant persists with the submission that the
rates presented to the BEC were not the applicant’s revised rates.
Lukhozi’s rates, which were inherited by the BEC were completely
off the market rates or not market related.
[7] The applicant impugns the lawfulness of Lukhozi’s report, hence it
seeks same to be reviewed and s et aside. Pursuant to its appointment,
Lukhozi transmitted a letter dated 27 th September 2024 to the
applicant informing that its tender had arithmetic errors and low rates.
Based on the errors and low rates, applicant’s tender was some
R25 096 954.78 too little which resulted in the actual tender amount
being R 161 239 446.04. The applicant categorically denies in its
founding affidavit that an amount of R161 239 446.04 is the actual
tendered amount. The applicant was given an opportunity to report
and con sider two options: firstly, that the applicant unconditionally
withdraws its offer; secondly that the applicant confirms its offer and
demonstrates its ability to execute the works inclusive of the evidence
in that record. The applicant considers Lukhozi’s letter of 27 th
September 2024 to be void ab initio as it has no standing in law.
However, the applicant, notwithstanding its complaint about the
letter’s invalidity, unlawfulness and voidness, transmitted a response
thereto on 04 th October 2024 enclosing the revised and balanced
BOQ; balanced section (section K) of the BOQ thereof; and the
summary of subsections of the BOQ separately showing all totals for
labour and material. The revised and balanced BOQ contained no
arithmetic errors and that all arithme tic errors which were flagged by
Lukhozi were addressed in the revised BOQ which is properly
balanced. The applicant denies that it owed any explanation to
Lukhozi with regard to the contents of its tender. The applicant insists
that it owed the explanati on to the Municipality, once its tender had
been deemed the highest scoring, acceptable or responsiveness tender.
[8] The applicant denies in its founding affidavit that its tender, taken as
a whole is not market related, unduly low and poses commercial r isks
upon the Municipality. Lukhozi misled the Municipality by providing
unreasonable estimates of prices. According to Lukhozi’s report, the
applicant was awarded 98 points for price and preference whereas
Coastal scored 80.36 points in this criteria. The PPPFA dictates, in
circumstances like the present, that the tender must be awarded to the
tenderer that scores the highest points unless the objective criteria is
followed1. The applicant criticizes the Municipality for not following
this legislation. Lu khozi unlawfully changed applicant’s tender to
R161 239 446.04.
[9] The applicant impugns Lukhozi’s report for a further reason that it is
not authorised by any procurement laws. The Municipality’s own
supply chain management policy does not authorize pe rsons who are
not its officials to participate in the procurement process or the
process of evaluation of tenders. Only Municipality’s BEC appointed
by the accounting officer evaluates bids and evaluates each bidder’s
ability and capacity to execute the co ntract2. The applicant concludes
by saying Lukhozi usurped the powers strictly reserved for the BEC
and evaluated applicant’s tender. Other reasons for impugning
Lukhozi’s report are that, firstly it is biased and unfair against the
applicant and its tend er; secondly, the report contained disparaging
1 Section 2(f) of Preferential Procurement Policy Framework Act 5 of 2000.
2 Clause (4) (3) and Clause 28(1) of the Supply Chain Management Policy.
remarks that are false, that consciously impugns applicant’s standing
in the tender and strongly or solely influenced Municipality’s decision
to reject applicant’s tender; thirdly, the report is not authorised by
Municipality’s SCMP; and fourthly, Lukhozi usurped the BEC’s
power to evaluates the tender by evaluating applicant’s tender.
[10] The applicant seeks in terms of section 8(1) (c) (iii) of PAJA a
substitution order in terms of which this court conside rs the tender
itself and grants an order declaring applicant’s tender to be a
responsive tender and direct the Municipality to award the tender to
the applicant. In the alternative, the applicant seeks an order remitting
the matter back to the BEC for eval uation of applicant’s tender in
accordance with the evaluation criteria set out in the tender.
[11] As stated above, the Municipality strenuously opposed this
application at all stages. The Municipality successfully opposed the
interdictory relief sought in Part A of the notice of motion. With
regard to Part B of the notice of motion which is a review application,
the Municipality generally denies that the impugned decisions had
been taken unlawfully and that they deserve to be reviewed and set
aside. The Municipality makes a point that it had already concluded
an agreement with Coastal, pursuant to an award of tender to it, with
effect from 1 st February 2025. It effectively means that such an
agreement had been enforced, acted upon, and implemented for
approximately nine (9) months when the matter was heard in this
court for determination of the review application. It contends that the
interruption of the maintanance and upgrades to critical water and
sewer infrastructure services currently rendered by the Coastal to the
Municipality in terms of the awarded tender, if interrupted even for a
single day shall have catastrophic consequences as far as the
Municipality’s constitutional duty to provide critical services to and
the needs of its constituency are con cerned. The public interest
demands that the services currently rendered by Coastal pursuant to
the award of the tender and conclusion of the contract be kept intact.
[12] The Municipality insists that applicant’s tender was unsuccessful,
firstly because of its under -pricing by R25 096 954.78 and its failure
to provide substantive evidence corroborating (i) its ability to absorb
the amount of R 25 096 954 78, and (ii) its ability to honour the out of
proposition and unrealistically low tender rates. Second ly because the
applicant was only registered for a single phase electrical installations.
Nonetheless, the applicant indicated in its tender that it would itself
attend to the 3.3kv electrical installation required in terms of the
tender. For the reason af orestated the applicant’s tender was found to
be non-responsive, albeit that the offer amount was less than that of
Coastal. The Municipality criticises the applicant for not addressing
those deficiencies in its founding affidavit. The Municipality
categorically denies that applicant’s tender was changed. It only
pointed out the errors. After the applicant’s revised BOQ submitted on
04th October 2024, the applicant’s tender amount premised on the
rates and prices contained in the revised BOQ should infact h ave been
R161 239 46.04, an amount substantially higher than the tender
amount of R136 142 491.26. Applicant’s tender was under -priced by
R 25 096 954.78. The Municipality denies that applicant’s contention
that its tender taken as a whole is market relate d and is not low or
unduly low. It contends that such a proposition is in conflict with the
correct calculation of or amounted to R161 239 446.04.
[13] The Municipality contends that applicant’s tender was also subjected
to the CIDB standard conditions of tender (2019), in this instance the
sustainability of the applicant to be able to properly execute the
tender. The fact that the offer was substantially lower than that of
Coastal caused the Municipality to seek assurance from the applicant
of the absorpt ion of R25 096 954.78 short fall, which the applicant
dismally failed to explain or address. The discrepancies in the
applicant’s BOQ and the difference between the applicant’s tender
offer amount and the true amount of its revised BOQ submitted
pursuant to the queries in respect of the rates in the original BOQ had
been picked up and dealt with during the pre -evaluation process and
before any award had been made.
[14] The applicant, having been given an opportunity to explain the
discrepancies between its tender amount, the rates or prices and the
shortfall of about R25 096 954.78, by means of revised BOQ, the
applicant attempted to reconcile the arithmetic shortfall, but however
leaves the same total tender amount unaffected, whereas it should
have been R161 239 449.04. That exacerbated the already problematic
issue concerning its out of proposition rates and consequently
amplifying the risk posed in this regard. Appli cant’s unrealistic and
non-market related rates or prices were not only unexplained, no
measures were provided to mitigate them. That failure concerning the
sustainability placed serious doubt in applicant’s ability to complete
the ad hoc works sufficientl y and effectively within three (3) years
contemplated in the tender without incurring significant financial
losses. That would most likely lead to significant and reoccurring
claims and disputes with the Municipality during the course of the
anticipated contract. The discrepancies on the applicant’s tender were
incapable of resolution by negotiation and balancing of BOQ as
envisaged in CIDB standards. They could only occur after the award
of a tender and for the purpose of rectifying errors. The Municipali ty
also contends that clause 24.4 of its SCM policy applies only in
respect of the downward adjustment of a tender amount and not to
upward adjustments.
[15] The Municipality denies that Lukhozi had produced an invalid and
unlawful report. The report complied with the relevant regulation, and
is rational and reasonable. Lukhozi duly acted on behalf of the
Municipality; its appointment being in compliance with the
Municipality’s SCM Policy for infrastructure delivery and
procurement Management. Lukhozi’s report forms part of the process
that culminated in the proceedings before BEC. Lukhozi’s report
served before the BEC where only the evaluation of the applicant’s
tender and that of Coastal had been undertaken. The Municipality
denies that Lukhozi’s report can validly be reviewed and set aside in
terms of PAJA. The Municipality denies that the decision embodied in
the minutes of the BEC and BAC dated 6, 26 and 29 November 2024
stands to be reviewed and set aside. No prospects of success have
been demonstrated in the applicant’s affidavit.
[16] The third respondent, Lukhozi opposed the application and delivered
its answering affidavit. Lukhozi makes common cause with the
Municipality and it goes at great lengths to expatiate and lay basis for
their actions. All parties make common cause that the tender was
subject to a two -stage evaluation, namely, firstly, functionality in
terms of CIDB standard conditions. At this stage only tenders meeting
a minimum standard of functionality are evaluated further at stage 2,
to wit, price, preference and specific goals. The applicant scored
above the minimum threshold. The parties seemingly lock horns
around stage two (2) which is, price, preference and specific goals.
Lukhozi, like the Municipality vehemently denies that applicant’s
tender was changed in any way. Numerous arithmetic errors were
noted and evaluated according to the CIDB standard conditions of
tender. It was pointed out that the BOQ as submitted at tender closing,
the applicant’s tender amount premised on th e rates and prices
contained in the original BOQ should have been R161 239 446.04 an
amount substantially higher than the tender amount of R136
142 491.26 if the actual rates as originally tendered are used. The
errors resulted in under -pricing of the tend er offer in the amount of
R25 096 954.78.
[17] Lukhozi relies on Clause 4.2 of the tender condition, which is worded
thus:
“Unreasonable or out of proposition rate
A tender may be rejected if the rates for any of the items in the bills of
quantities are, in the opinion of the employer, unreasonable or out of
proposition. The tender will be given a period of seven (7) days after
having been notified in writing by e mployer to adjust the rate for the
relevant items. Should the tenderer fail to agree to adjust the rates or
provide substantive evidence that, in the opinion of the employer, justifies
the unreasonable or out of proposition rates, the tender will be
declared non-responsive”.
[18] Lukhozi aligns itself with the contents of paragraph 20.5 of
Municipality’s answering affidavit in that applicant’s tender was
under-priced and that the applicant was only registered for single
phase electrical installations. Respondents deny that the applicant has
necessary expertise to attend to 3.3kv electrical installations in terms
of the tender. Because of the aforesaid deficiencies, applicant’s tender
was found to be non -responsive and accordingly rejected. The
applicant was given an opportunity to explain the discrepancies
between its tender amount and the rates or prices contained in its BOQ
to which it had responded by means of a revised BOQ. However, the
revised BOQ failed to provide reasons or mitigation measures
justifying its numerous unrealistic and non -market related rights
included in its tender.
[19] Lukhozi makes a point that they are consulting engineers appointed
by the Municipality as their consultant, to technically evaluate all
tenders received for ten der. Mr K Potgieter was appointed as a
technical adviser/ specialist in an advisory capacity and non -active
member. Mr Potgieter is Lukhozi’s project manager. Lukhozi insists
that it was lawfully appointed to technically advise the Municipality.
Decision and Analysis
[20] In the first instance, the applicant seeks to review and set aside the
following recommendations:
20.1 Lukhozi’s evaluation report dated 07 th October 2024
recommending to the Municipality’s BEC that the tender be
awarded to Coastal.
20.2 The BEC’s decisions taken respectively on 06th November 2024
and 26th November 2024 recommending the award of the tender
to Coastal and further recommending the elimination or
rejection of the applicant’s tender.
20.3 The BAC’S decisions recommending the award of the tender
to Coastal and further recommending the elimination or
rejection of the applicant’s tender. Although the BAC
minutes reveal that the meeting of the committee was held
on 29 th November 2024, the recommendation was s igned on
04th December 2024.
20.4 The recommendations aforesaid are sought to be reviewed and
set aside in terms of section 6 of Promotion of Administrative
Justice Act 3 of 2000 (PAJA). PAJA deals with reviews of
administrative decisions or actions. I intend to deal with the
recommendations in one fell swoop as the legal principle
dispositive of the recommendations is the same.
[21] PAJA3 defines “administrative action” to mean
“any decision taken, or any failure to take a decision, by-
(a) an organ of state, when-
(i) exercising a power in terms of the Constitution or a
provincial constitution; or
(ii) exercising a public power or performing a public
function in terms of any legislation; or
(b) a natural or juristic person, other than an organ of state, when
exercising a public power or performing a public function in terms
of an empowering provision, which adversely affects the rights of
any person and which has a direct, external legal effect…”
[22] The same provision defines a “decision” to mean
“any decision of an administrative nature made, proposed to be made, or
required to be made, as the case may be, under an empowering provision,
including a decision relating to-
(a) making, suspending, revoking or refusing to make an order,
award or determination;
(b) giving, suspending, revoking or refusing to give a certificate,
direction, approval, consent or permission;
(c) issuing, suspending, revoking or refusing to issue a licence,
authority or other instrument;
(d) imposing a condition or restriction;
(e) making a declaration, demand or requirement;
(f) retaining, or refusing to deliver up, an article; or
(g) doing or refusing to do any other act or thing of an administrative nature,
and a reference to a failure to take a decision must be construed accordingly”.
[23] The Constitutional Court4 explained the definition of administrative
action as follows:
“[33] The concept of “administrative action”, as defined in section 1(i) of
PAJA, is the threshold for engaging in administrative-law review.
The rather unwieldy definition can be distilled into seven elements:
there must be (a) a decision of an administrative nature; (b) by an
organ of state or a natural or juristic person; (c) exercising a
organ of state or a natural or juristic person; (c) exercising a
public power or performing a public function; (d) in terms of any
legislation or an empowering provision; (e) that adversely affects
3 Section 1 of Promotion of administrative Justice Act 3 of 2000
4 Minister of Defence and Military Veterans v Motau and Others 2014 (8) BCLR 930, 2014 (5) SA 69
(CC) Para 33
rights; (f) that has a direct, external legal effect; and (g) that does
not fall under any of the listed exclusions. In the present matter
there are two elements in dispute: whether the Minister’s decision
under section 8(c) of the Armscor Act is of an administrative
nature (element (a)) and whether it falls under any of the listed
exclusions (element (g)). Both can be answered by interrogating
the nature of the power.
[34] To determine what constitutes administrative action by asking
whether a particular decision is of an administrative nature may,
at first blush, appear to presuppose the outcome of that enquiry.
But the requirement has two important functions. First, it obliges
courts to make a “positive decision in each case whether a
particular exercise of public power . . . is of an administrative
character”. Second, it makes clear that a decision is not
administrative action merely because it does not fall within
one of the listed exclusions in section 1(i) of PAJA. In other
words, the requirement propels a reviewing court to undertake a
close analysis of the nature of the power under consideration”
[24] A conduct that complies with the definition of administrative action
requires that it must translate and lead to direct and immediate
consequences for individuals or group of individuals. I am not alone
on this. This court in the RPCSA5 quoted with approval the
sentiments of Nugent JA in Grey Marine Hout Bay (Pty) Ltd and
Others v Minister of Public Works and others6:
“24….. Administrative action is rather, in general terms, the conduct of
the bureaucracy (whoever the bureaucratic functionary might be) in
carrying out the daily functions of the State, which necessarily involves the
application of policy, usually after its translation into law, with direct and
immediate consequences for individuals or groups of individuals.”
immediate consequences for individuals or groups of individuals.”
5 Reformed Presbyterian Church in Southern Africa v Minister of Police and another 2018 (2) LL SA
260 (ECM) Para 26
6 Greys Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works an d others 2005(3) ALL SA
33 (SCA);2005 (6) SA 313 SCA;2005 (10) BCLR 931 (SCA) Para 24
[25] The ordinary grammatical meaning of the words used in the definition
of administrative action must be adhered to and can only be departed
from if that leads to an absurd result 7. The words “direct external
legal effect” constituting the six th element of the definition of
administrative action must grammatically be interpreted as that
construction is consistent with the dictum of Nugent JA in Greys
Marine8. The decision must have a direct and immediate consequence
or effect for the individual to whom it applies. South African Concise
Oxford Dictionary defines the words “direct” in the following ways:
“1. going from one place to another without changing direction or
stopping, (of apparent plenary motion) proceeding from west to ea st in
accord with actual motion
2. Straightforward; frank. clear; unambiguous.
3.Without intervening factors or intermediaries…. Proceeding in
continuous succession from parent to child…”
This list of definition of the word direct is not exhaustive. The
following synonyms are apposite.
Straightforward and undeviating.
[26] A decision to qualify or comply with the definition of administrative
action must proceed directly to be applied to the targeted individual(s)
without any intervening factors. It must come from the decision
maker directly to the targeted individual(s) and without changing
direction or stopping at a particular point before arriving at the
targeted individual or group of individuals. It should not deviate to
any other point other than its target destination.
7 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) Para 17-18.
8 Greys Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works an d others (Supra) Para 24.
[27] From the facts of this case it is plain that the recommendations in
question were directed to the BEC, BAC and to the
Municipality itself. None was directed to the applicant. It is seemingly
not gainsaid that Lukhozi ‘s report was placed before the BEC, and
when the BEC was considering its recommendation it considered
Lukhozi’s report. The BEC made its recommendation not to
anybody else, but to Municipality’s BAC. When the BAC was in the
process of making its own recommendation it considered the BEC
report. The BAC made its recommendation to the Municipality’s
accounting officer. It is, therefore, categorically clear from these
undisputed facts that the recommendations adverted to above have
“no direct legal effect” to the applicant. For it to satisfy the
requirement of direct legal effect, a decision, must have direct and
immediate effect or consequence o n the applicant without changing
direction or stopping somewhere else for consideration. There should
not be any intervening point for its application other than the
intended destination.
[28] Both BEC minutes of 06 th November 2024 and 26 th November 2024
contain a similar remark that reads thus:
“Ds concluded the meeting, and all the members with the
recommendation to be submitted to the next BAC meeting.”
The BAC minutes of 29 th November 2024, recommendations of
which are contained in parag raph (a) and (b) under the heading
“Resolved to Recommend to the Accounting Officer.”
However, paragraph (d) is recorded as follows:
“(d) that the items in (a) and (b) above be referred to the accounting
officer for approval.”
[29] Clause 6.1.1.4.3(b) of George Municipality Supply Chain
Management (SCM) Policy Framework for Infrastructure Delivery
and Procurement Management (LGFIDPM) 2024/2025 (SCMP)
provides thus:
“6.1.1.4.3 The Bid Adjudication Committee shall:
(a)……
(b) refer the report back to the Bid Evaluation Committee for their
reconsideration or make a recommendation to the accounting officer on the
award of a tender, with or without conditions together with reasons for such
recommendations” (my underlining).
[30] In the case of Lukhozi’s recommendation, as I have alluded to above,
the intended destination was the BEC, not the applicant. Lukhozi’s
report was intended to stop and end with the BEC. It was intended
only for the eyes and the mind of the BE C. The BEC embarked on
a process of preparing its report. Its report was for consideration only
by the BAC, not by the applicant. It means that between the BEC and
the applicant, there were numerous intermediaries like BAC. The
BAC report was directed, not to the applicant, but to the
Municipality’s accounting officer. Obviously, the Municipality’s
accounting officer serves as an intermediate factor between the
Municipality and the applicant. There was no straight forwardness
and directness of the Lukhozi, BEC and BAC recommendation to the
applicant. All these recommendations were subject of consideration
by the next committee or body.
[31] Lukhozi, BEC and BAC played only advisory roles to assist the
ultimate decision maker. They wer e to establish facts and advise the
Municipality’s accounting officer through the making of
recommendations. The Municipality’s accounting officer is neither
bound to accept the recommendation nor is he or she bound to
follow its recommendation9.
[32] This brings me to the word in the definition external legal effect. An
administrative action must have external legal effect for it to be
reviewable. All these recommendations had only internal effect as
they were intended to influence internal proc esses. Lukhozi’s report
was intended to influence the BEC. BEC recommendation was
intended to influence the BAC. The work of the BAC was intended to
affect only the Municipality’s accounting officer. All of these are
internal functionaries endevouring to propel their internal processes.
The requirement of external legal effect is deficient in the
recommendations in question.
[33] I am alive to the authorities which propound that the word direct in
the definition of administrative action implies fin ality10. Hoexter 11
espouses the following views of the authors Plaff and Schneider:
“If for example, a decision requires several steps to be taken by different
authorities, only the last of which it is directed at the citizen, all previous
steps taken wit hin the sphere of public administration lack direct effect,
9 President of the Republic of South Africa and others v South African Rugby Football Union and
others 2000 (1) SA 1; 1999 (10) BCLR 1059 (cc) Para 146; National Treasury v Kubukeli 2016 (1) ALL
SA 30 (SCA); 2016 (2) SA 507 SCA Para 25.
10 Cora Hoexter Administrative Law in South Africa, 2 nd Edition, Page 229.
11 Hoexter (Supra) Page 228.
and only the last decision may be taken to court for review.…….
Therefore, all the preparatory decisions are in principle not reviewable by
the administrative courts”
[34] It can hardly be said that a recommendation by an advisory body for
the decision maker to take an informed decision constitutes an
administrative action that adversely affects the rights of a person, in a
manner that has a direct and external legal effect. It is what the organ
of state decides to do and actually does with the information it has
become aware of, which could potentially trigger the applicability of
PAJA12. I am unable to agree with applicant’s contention that the
recommendations of Lukhozi, BEC and BAC are capable of being
reviewed. PAJA provisions do not apply to their recommendations.
The relief relating to the setting aside of the aforesaid
recommendation cannot succeed.
[35] Doctrine of ripeness is applicable herein. The idea behind the
requirement of ripeness is that a complainant should not go to court
before the offending action or decision is final or at least ripe for
adjudication13.
[36] Lukhozi’s report is sought to be reviewed and set aside on a further
ground that Lukhozi was unlawfully appointed. Save for this bare
allegations, no further detail is set out in the founding affidavit. It is a
common cause or at least not seriously di sputed that Lukhozi and its
12 Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v Hidro and Tech Systems (Pty) Ltd and
another 2011 (6) SA 327 (CC), 2011 (2) BCLR 207 (CC) Para 38.
13 Cora Hoexter (Supra Page 58; Yvonne Burn: Administrative Law under the 196 Constitution, 3 rd Edition,
Page 469.
Project Manager were appointed by the Municipality as its
consultant, technical advisor and specialist to technically evaluate
and advise on the technical aspects of the tender. A point is made
that Lukhozi and its Project Manager were appointed in terms of
Municipality’s Supply Chain Management Policy Framework for
infrastructure delivery and Procurement Management. The
Municipality’s Policy Framework provides for the appointment of
agents. An agent is defined as “a person or organization that is not an
employee of the George Municipality that acts on the George
Municipality’s behalf in the application of the document ” (Clause
2.1 of SCM Policy Framework). Clause 6.1.1.1.3 also provides that
persons appointed in wri ting as technical advisors and subject matter
experts may attend any committee meeting. I therefore cannot agree
that Lukhozi’s appointment was unlawful. Technical advisors are
envisaged in the SCM Policy Framework.
Dispute of Fact
[37] Motion proceed ings, unless concerned with interim relief, are all
about the resolution of legal issues based on common cause facts.
Unless the circumstances are special they cannot be used to resolve
factual issues because they are not designed to determine
probabilities14. It is well established under the Plascon Evans Rule
that where in motion proceedings disputes of fact arise on
affidavits, a final order can be granted only if the facts averred in
the applicant’s affidavits, which have been admitted by the
14 Plascon Evans Paints Ltd v Van Riebeek Paints (Pty) Ltd 1984 (3) SA 623 (A) 634-5.
respondent, together with the facts alleged by the latter, justify such
order15.
[38] Firstly, the Municipality and Lukhozi make common cause that the
applicant discloses in its tender that it is only registered for single
phase electrical installations. The applicant, however, indicated that it
would attend to the 3.3kv electrical installation required in terms of
the tender. Accordingly, the Municipality and Lukhozi, express an
opinion that applicant’s inability to undertake 3.3kv work itself
disqualified the applicant. Lukhozi, takes this point even further to
contend that the applicant’s tender document reflected only Mr Braai,
Mr Maxaza and Mr Khayalethu as relevant personnel, none of whom
was qualified to do 3.3kv installations. The t ender was considered
on the basis of personnel capacity presented to the Municipality by
means of a tender document. The name of Mr William Modise
Masiko was never part of the information forming part of the
tender.
[39] It does not appear to have be en gainsaid that the requirement of a
personnel armed with the requisite capacity to undertake 3.3kv
installations was a mandatory requirement. Although the applicant
seems to be suggesting in its replying affidavit that it had the
necessary capacity to undertake 3.3kv installation, that case is made
out in the replying affidavit, which practice is generally
impermissible. In any event applicant’s failure to demonstrate in its
tender document the names of its personnel equipped with the
15 National Director of Public Prosecutions v Zuma 2009 (2) SA 277 (SCA) Para 26.
requisite capacity to undertake such kind of work renders applicant’s
version to be consisting of bald and uncreditworthy denials or
allegations which also renders it to be palpably implausible,
farfetched or so clearly untenable and in that case this court is
justified in rejecting that denial or allegation merely on the papers16.
[40] Mandatory requirements of the tender are a determining factor and
they have an intrinsic value to the tender process. Once there is non -
compliance therewith, the court should look no further and find no
fault in the tender process and ultimately dismiss the application with
costs17. The best time to comply with mandatory requirements is
when the tenderer submits its tender on the closi ng date. In
Steenkamp18 the Constitutional Court stated that tender process
require strict compliance by all competing tenderers on the closing
day for submission of tenders. In Allpay19 Constitutional Court held
that :
“[40] Compliance with the requirements for a valid tender process, issued
in accordance with the constitutional and legislative procurement
framework, is thus legally required. These requirements are not merely
internal prescripts that SASSA may disregard at whim. To hold otherwise
would undermine the demands of equal treatment, transparency and
efficiency under the Constitution. Once a particular administrative
process is prescribed by law, it is subject to the norms of procedural
fairness codified in PAJA. Deviations from the procedure will be assessed
in terms of those norms of procedural fairness. That does not mean that
administrators may never depart from the system put into place or that
deviations will necessarily result in procedural unfairness. But it does
mean that, where administrators depart from procedures, the basis for
16 Plascon Evans Paints (Pty) Ltd v Van Riebbek Paints (Pty) Ltd 1984 (3) SA 623 (a) 634 -5; National
Director of Public Prosecutions v Zuma 2009 (2) SA 277) (SCA) Para 26
17 Sithathu Funding (Pty) Ltd v Road Accident Fund and others (124/2022) [2025] ZARCMKC 36 (15
April 2025) Para 65
18 Steenkamp No v Provincial Tender Board Eastern Cape 2007 (3) SA 121 Para 60
19 Allpay Consolidated Investments Holdings (Pty) Ltd and others v Chief Executive Officer of the
South African Social Security Agency and others 2014 (1) SA 604(CC); 2014 (1) BCLR (CC) Para 40
doing so will have to be reasonable and justifiable, and the process of
change must be procedurally fair”.
[41] In Norland Construction20
“[12] It is nevertheless accepted that compliance with bid requirements
is necessary and has intrinsic value. Equal bid requirement observed
by all bidders enhances the fairness of the process, so that bid
requirements simply cannot be discarded at the drop of a hat. It must,
by contrast, also be noted that there are inherent dangers in adopting an
unduly rigid approach to the issue of responsiveness, and that courts must
guard against the elimination of bidders based on administrative
considerations as opposed to issues of substance. Such an approach
could defeat the objectives of fairness, transparency, competitiveness and
cost effectiveness. The Constitutional Court has eschewed both an
overly rigid as well as an overly flexible approach and instead adopted a
purposive approach to the issue of bid responsiveness. On this
approach, there are instances where substantial compliance with the
tender terms and conditions (as opposed to perfect compliance) would
suffice. As Volmink has indicated:
‘A process of fair-minded reasoning requires that bids be assessed
on their merits and not be excluded for relatively minor breaches.
Such an approach gives effect to the values of fairness, equity,
transparency, competitiveness and cost effectiveness enshrined in
section 217(1) of the Constitution. Thus, the courts are required to
enquire into the underlying objective and materiality of a bid
requirement, to ascertain whether its purpose was in fact met
despite less than perfect compliance. A decision whether or not to
exclude a non-compliant bidder from a bid process will depend on
a variety of factors including: the wording of the RFP, the
materiality of the unfulfilled requirements, the degree of non-
compliance and the purpose of the requirement.’
compliance and the purpose of the requirement.’
[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 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
20 Norland Construction (Pty) Ltd v Chris Hani Development Agen cy (SOC) Limited and another
(18/2022) [2024] ZAECMKC 10 (23 January 2024) Para 12-13.
material is a question to be determined by the BEC in its discretion, taking
into account the set eligibility criteria.
[42] Having found that this application cannot succ eed on the ground that
the applicant had failed to comply with a mandatory requirement of
the tender relating to the necessary capacity, I gratuitously deal with
the point relating to pricing and preference. Municipality and Lukhozi
contend that appli cant’s tender contained numerous arithmetic errors
and such errors resulted in the applicant’s tender having been under -
priced by R25 096 954 .78. Allied to that was the applicant’s inability
to show how it would absorb such an amount. The applicant was
unable to honour out of proposition rates. The prices or rates were
remarkably and unrealistically low and the tender was not market
related. Upon having been advised of the arithmetic errors alluded to
above, the applicant adjusted its rates and pr ices and produced/
submitted revised BOQ. Ironically the tender amount of R136
142 491.26 did not change. According to the Municipality and
Lukhozi, had the applicant properly attended to the arithmetic errors
besetting its tender, the tender amount w ould have come up to
R161 239 446.04. While the applicant accepts that it submitted a
revised BOQ, it denies that the tender amount, when properly
calculated, would have increased to R161 239 446.04.
[43]. What is fundamentally unclear is the nature , extent and effect of the
adjustments made by the applicant which resulted in the revised BOQ
being submitted. In law, content is everything 21. The BOQ were
revised and submitted in the context of an awareness having been
made by Lukhozi on behalf of Municipality that there are arithmetic
errors relating to rates or prices. The words arithmetic suggests that
errors related to the calculation of numbers or figures contained on the
BOQ. In fact, the applicant was clearly advised that arithmetic errors
relate to the rates or prices. Therefore, if the rates or prices were really
adjusted, how does it happen that such adjustments cannot affect the
tender amount, whether negatively or positively. If the BOQ were
indeed revised, the natural consequence of such adjustments would be
to increase or decrease the tender amount. It is palpably implausible,
far-fetched and clearly untanable that adjustments and revision of
rates and prices in the BOQ cannot affect the original tender amount.
The revision and adjustment of the rates or prices was a clear
acknowledgement and recognition that there were errors and
inaccuracies in the BOQ which required adjustment, revision and
fixing. Unfortunately, the applicant failed to disclose to this court
how the BOQ were revised.
[44] It is common cause that applicant’s BOQ were revised. That relates
to prices/rates. The ordinary meaning relevant to this matter of the
verb “revise” is to examine and make corrections or alterations to
written or printed matter. ” If price rates were corrected, altered or
amended, that would obviously have an effect on the total of the
tender amount.
21 Minister of Home affairs and others v Sclabrini Centre and Cape Town and others 2013 (6) SA 421
(SCA), 2013 (4) ALL SA 571(SCA) Para 89.
[45] In the amalgam of all this, I come to a conclusion that applicant’s
application deserves only a fate of dismissal. I have not been advised
of any reason why costs should not follow the result. The costs shall
follow the result.
Order
[46] In the result I make the following order:
46.1 The application is dismissed.
46.2 The applicant shall pay costs of the application on a party
and party scale (scale A)
________________________________
A.S ZONO
JUDGE OF THE HIGH COURT (ACTING)
APPEARANCES:
Counsel for the Applicant : Adv Nyangiwe
Instructed by : MOLETSANE PN ATTORNEYS
Section 33 Tacoma Arcade
6-8 Chamberlain Road
Berea
East London
Tel:043 051 0608 or 079 944 0440
Email: paballom@mpnlaw.co.za
Counsel for the 1st Respondent : Adv Van Der Merwe
Instructed by : GOUSAARD ATTORNEYS
33 Victoria Street
George
c/o CONLON LAW ATTORNEYS
2 Clevedon Road
Serborne
East London
Tel: 043 555 4000
E-mail: admin@malusiec.co.za
Ref: ca@conlonlaw.co.za
Counsel for the 2nd Respondent : Adv Watt
Instructed by : PAGDENS ATTORNEYS
c/o BATE CHUBB & DICKSON INC
Sute 2 Norvia House
34 Western Avenue
Vincent
East London
Tel: 043 701 4500
Email: lisa@batechubb.co.za
Date heard : 18th September 2025
Date Delivered: : 10th February 2026