Loghdey v City of Cape Town and Others, Advance Parking Solutions CC and Another v City of Cape Town and Others (100/09) [2010] ZAWCHC 25 (20 January 2010)

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[2010] ZAWCHC 25
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Loghdey v City of Cape Town and Others, Advance Parking Solutions CC and Another v City of Cape Town and Others (100/09) [2010] ZAWCHC 25 (20 January 2010)

IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case No. 100/09
In the main application
between:
MOHAMMED
ZUNADE LOGHDEY
Applicant
and
CITY OF CAPE TOWN
First
Respondent
ADVANCED PARKING
SOLUTIONS CC
Second
Respondent
NUMQUE 20 CC
Third Respondent
In the
counter-application (for a review and related relief) between:
ADVANCED PARKING
SOLUTIONS CC
First Applicant
NUMQUE 20 CC
Second Applicant
and
CITY OF CAPE TOWN
First
Respondent
CHAIRPERSON, SUPPLY
CHAIN MANAGEMENT
BID ADJUDICATION
COMMITTEE OF THE
CITY OF CAPE TOWN
Second
Respondent
CITY MANAGER OF CAPE
TOWN
Third Respondent
MOHAMMED
ZUNADE LOGHDEY
Fourth
Respondent
JUDGMENT DELIVERED ON
20 JANUARY 2010
BINNS-WARD J:
On
3 July 2008, consequent upon
the
outcome of a competitive bidding process, the City of Cape Town
(which is a municipality and an organ of state within the local
sphere of government) awarded a contract to Mohammed Zunade Loghdey
(‘Loghdey’). It was for the provision of a kerbside parking
management service over a three year period. Advanced Parking
Solutions CC and Numque 20 CC have applied for the review and
setting
aside of the award of the tender contract to Loghdey. The
review application was brought by way of a counter-application. The
main application was an application by Loghdey to compel the City to
proceed with the implementation of the tender contract. The
implementation of the contract has not yet commenced. Initially
this was as a result of an internal appeal against the award,
and
latterly as a consequence of an interim prohibitory interdict
imposed pending the determination of the current application.
The
parties were agreed that in the event of the counter-application
succeeding it is unnecessary to consider the main application.
Loghdey
trades as Street Parking Solutions. For convenience I shall refer
to him and his business indiscriminately in this judgment by
the
acronym ‘SPS’. I shall refer to the applicants for review as
‘APS’ and shall refer separately to Numque 20 CC as ‘Numque’,
whenever it is necessary for the purpose of this judgment to
distinguish it from Advanced Parking Solutions CC.
The
application for review is brought in terms of s 6 of the
Promotion of Administrative Justice Act 3 of 2000 (PAJA). PAJA
is
the legislation contemplated in s 33(3) of the Constitution
to give effect to everyone’s right to administrative action that
is lawful, reasonable and procedurally fair. It is trite by
now
that the award of a tender contract by an organ of state is
‘administrative action’ within the meaning of PAJA.
It is convenient to
preface the setting out of APS’s grounds of review with a summary
of the applicable statutory and regulatory
provisions.
The
procurement processes of organs of state
have
to comply with s 217 of the Constitution, which provides:
‘
When an organ of state
in the national, provincial or local sphere of government, or any
other institution identified in national
legislation, contracts for
goods or services, it must do so in accordance with a system which is
fair, equitable, transparent, competitive
and cost-effective.’
As
far as procurement by municipalities
,
in particular, is concerned, the import of s 217 of the
Constitution has been fleshed out in Part I of Chapter 11
(ss 111-119)
of the Local Government: Municipal Finance
Management Act 56 of 2003 (‘the MFMA’).
In
terms of s 111 of the MFMA
,
every municipality must have and implement a supply chain management
policy which gives effect to the provisions of Part I of
chapter 11
of the Act. Section 112 of the MFMA prescribes that a
municipality’s supply chain management policy must be fair,
equitable, transparent, competitive and cost-effective, and it must
comply with a prescribed regulatory framework for municipal
supply
chain management. The relevant framework has been prescribed in the
Municipal Supply Chain Management Regulations published
under
General Notice 868 in GG 27636, dated 30 May 2005 (‘the regulatory
framework’).
Section
112
of the MFMA
further
prescribes that a municipality’s supply chain management policy
must ‘cover’ certain matters. These matters include
the
procedures and mechanisms for tenders, open and transparent
pre-qualification processes for tenders or other bids, competitive
bidding processes in which only pre-qualified persons may
participate, bid documentation, advertising of and invitations for
contracts,
procedures and mechanisms for the evaluation of bids to
ensure best value for money, procedures and mechanisms for the
approval
of bids, and procedures and mechanisms for negotiating the
final terms of contracts and the delegation of municipal supply
chain
management powers and duties, including to officials.
The contract in question
is a ‘long term contract’ as defined in the regulatory
framework.
1
Accordingly, the services to be provided thereunder had to be
procured through a competitive bidding process.
2
The regulatory framework requires that bid documentation must,
amongst other matters, include evaluation and adjudication
criteria.
3
The
regulatory framework permits a municipality to allow in its supply
chain management policy for the accounting officer to negotiate
the
final terms of a contract with bidders identified through a
competitive bidding process as ‘preferred bidders’. This

measure of allowance is, however, subject to the proviso that such
negotiation must not allow any preferred bidder ‘a second or
unfair opportunity’ and may not be to the detriment of any other
bidder.
4
The
regulatory framework allows for a municipality’s supply chain
management system to provide for a ‘committee system’ to
deal
with the competitive bidding process.
5
A committee system is required to comprise of at least three
committees; namely, a bid specification committee, a bid evaluation
committee and a bid adjudication committee.
6
In
formulating the specifications for any procurement by a municipality
of goods or services, a
bid specification committee is required to provide for ‘any
accepted standards such as those issued by…the International
Standards
Organisation…with which the equipment or material or
workmanship should comply’. Specifications should also ‘where
possible,
be described in terms of performance required rather than
in terms of descriptive characteristics for design’.
7
A bid specification committee must be composed of one or more
officials of the municipality, preferably including the manager
responsible for the function involved. It may ‘when appropriate’
include external specialist advisers’.
8
A bid
evaluation committee is required
in terms of the regulatory framework to evaluate bids in accordance
with (i) â€˜the specifications for a specific procurement’
9
and (ii) the applicable points system. In addition the
evaluation committee must evaluate each bidder’s ability to
execute
the contract.
10
The
function of a bid adjudication committee is essentially to provide a
final consideration by senior management officials of the
municipality, with the
assistance
of a technical expert in the relevant field, of the bid evaluation
committee’s recommendation before the relevant contract
is
awarded. Certain formalities must be complied with if the bid
adjudication committee decides that the contract should be awarded
to any bidder other than that recommended by the bid evaluation
committee. Notification is required in such circumstances to the
Auditor-General, the relevant provincial treasury and the National
Treasury.
11
The
City of
Cape
Town’s supply chain management policy (‘the SCMP’), a copy of
which was annexed to APS’s founding papers in the review
application, appears to comply in all relevant respects with the
regulatory framework.
In
particular
,
and insofar as relevant to the current matter, the SCMP –
stipulates (in clause
97) that ‘[B]id documentation must clearly indicate the terms and
conditions of contract, specifications,
criteria for evaluation and
adjudication procedures to be followed where applicable’. It
provides (in clause 101) that ‘[T]he
bid documentation and
evaluation criteria shall not be aimed at hampering competition,
but rather to ensure fair, equitable,
transparent competitive and
cost effective bidding, as well as the protection or advancement of
persons as embodied in the City’s
Preferential Procurement
Policy’.
p
rovides
(in clause 111) that if the estimated contract value exceeds
R10 million the bidder must supply audited financial
statements ‘if
the bidder is required by law to prepare annual financial
statements’.
p
rescribes
(in clause 112) -that ‘[B]id documentation shall state that
alternative bids may be submitted provided that a bid
free of
qualifications and strictly in accordance with the bid documents is
also submitted’. An alternative bid is required
to be submitted
on a separate complete set of bid documents. Evaluation of
alternative bids is permitted only if the requirements
of clause
112 have been complied with – see clause 196.
provides,
in c
lause
134, that ‘if an appeal is lodged in terms of clause 211’ all
the bidders must be requested to extend the validity of
their bids
until the appeal is finalised.
requires,
in terms of c
lause
158, ‘each bid [to be] in writing using non-erasable ink’.
Related to this provision is clause 182.2, which provides
that
‘[B]ids shall be considered invalid and shall be endorsed and
recorded as such in the bid opening record by the responsible
official…if the bid is not completed in non-erasable ink’.
p
rovides
that the evaluation of a bid shall note for inclusion in the
evaluation report, a number of matters including the particulars
of
any bidder ‘whose bid is not in compliance with the
specification’ (see clause 191)
provides that ‘[T]he
evaluation of bids on an equitable basis may be considered during
the evaluation process’. (As far as
I have been able to
determine, the SCMP does not appear to define exactly what
evaluation ‘on an equitable basis’ comprehends.)
enjoins the bid
evaluation committee, having considered ‘the Responsible Agent’s
draft report, [to] submit a report, including
recommendations
regarding the award of the bid or any other related matter, to the
Bid Adjudication Committee for approval or
for further
recommendation to the City Manager for approval’ (clause 201).
allows (in terms of
clause 216) the City Manager to ‘negotiate the final terms of a
contract with bidders identified through
a competitive bidding
process as preferred bidders provided that such negotiation does
not allow any preferred bidder a second
or unfair opportunity; [or]
is not to the detriment of any other bidder’.
provides, in clause
276, for the ‘ratification’ by the City Manager of ‘any minor
breaches which are purely of a technical
nature of the bid
processes described in this Policy by an official or committee
acting in terms of delegated powers’.
Clauses 210-214 of the
SCMP provide as follows:
‘
2.10 If the Bid
Adjudication Committee, City Manager or other delegated official has
resolved that a bid be accepted, the successful
and unsuccessful
bidders shall be notified in writing of this decision.
The written notification
referred to in clause 210 shall inform the parties:
of their right to
appeal such decision within 21 days of the written notification of
that decision in terms of Section 62 of the
Systems Act;
of their right to
request reasons for the decision in terms of the Promotion of
Administration Act, 3 of 2000;
that any appeal as
envisaged by this clause must be submitted to the City Manager at
the address stated in the notification; and
that
no award shall be made until either the successful expiry of the 21
day appeal period or confirmation in writing that none
of the
affected parties intend to appeal, or the satisfactory resolution
of any appeals.’
Any appeal must state
the reasons for the appeal, the way in which the person's rights are
affected by the decision and the remedy
sought.
The consideration of
appeals and if necessary, the invalidation of any decision made,
shall be dealt with in terms of the City's
appeal process.
214 If, after the expiry
of the prescribed 21 day appeal period there are no appeals, then a
letter of acceptance/award shall be issued
to the successful bidder.’
Implementation of the
procurement policy of any organ of state, including a municipality,
is furthermore required
12
to occur within the framework provided in terms of the Preferential
Procurement Policy Framework Act 5 of 2000 (‘the PPPFA’).
This
means that only ‘acceptable tenders’, as defined in the Act, may
be scored.
13
An ‘
acceptable
tender
’
is ‘
any
tender which, in all respects, complies with the specifications and
conditions of tender as set out in the tender document
’.
14
Having sketched the
applicable statutory and regulatory provisions it is time to turn to
the grounds on which APS relies in the
application for judicial
review. Borrowing liberally from the description in APS’s heads
of argument, these may be summarised
as follows:
that
the decision of the City Manager (dated 12 October 2007) and the
decision of the
bid
adjudication committee (‘the SCMBAC’), dated 30 June 2008, and
the resultant contract entered into between the City and
SPS on 3
July 2008 should be reviewed and set aside on the basis that they
failed to comply with clause 211 of the City’s Supply
Chain
Management policy and clause 13.9.1 of the Conditions of Tender
15
(‘the first review ground’).
SPM’s
tender failed to comply with a number of formal responsiveness
criteria and it should have been excluded from consideration
(‘the
second review ground’).
SPS
’s
tender failed to comply with a number of ‘pre-qualification
criteria’ and it should have been excluded from consideration
(‘the third review ground’).
SPS
’s
tender failed to comply with the bid specifications in the sense
that it tendered a system which did not exist and the tender
should
have been excluded from consideration (‘the fourth review
ground’).
SPS
’s
tender should have been excluded because it offered a system which
did not comply with the ISO 14443A and ISO 14443B specification
(‘the fifth review ground’).
SPS
’s
tender should have been excluded because of Loghdey’s weak past
performance under an interim parking management contract
in the
Claremont area (‘the sixth review ground’).
SPS
’s
tender was scored unreasonably high for a number of the
functionality criteria (‘the seventh review ground’).
The
manner in which the financial bids were scored was not competitive
and produced an irrational result (‘the eighth review
ground’);
and
Various
procedures contained in Chapter 11, part 1 of the MFMA, the
regulatory framework and the City’s SCMP had not been complied
with (‘the ninth review ground’).
In view of the
conclusion to which I have come in regard to the result of the
application it is unnecessary to deal with all of
the aforementioned
grounds of review. Some of them in any event overlap – in this
regard the second to fifth review grounds
each essentially go to
different aspects of alleged non-responsiveness.
Suffice it to say that I
consider that there is no merit in the sixth ground. The invitation
to tender made it quite clear that
the City reserved to itself a
discretion to reject any bid on the basis of the bidder’s
inadequate performance of previous contracts.
In the current case,
despite the fact that there is evidence that SPS’s performance of
the Claremont kerbside parking contract
had given rise to complaints
by municipal officials, it would appear that the problems that had
initially manifested in this regard
were considered by those in
responsible authority to have been satisfactorily resolved. Whether
this was objectively correct or
not is of no relevance. There is
nothing in the bid documentation which obliged the municipality to
exercise its discretion against
SPS and accordingly no basis on this
ground on which this court could impugn the City’s decision to
award the tender contract
to SPS.
I would also be
reluctant to be drawn into the detail of the evaluation committee’s
scoring of the competing tenders. Scoring
is a technical function
and there is no suggestion that there was any deficiency in the
appropriate technical qualifications of
the committee’s members.
In the absence of a starkly demonstrable misdirection or compelling
evidence of arbitrariness on the
part of the evaluation committee,
engagement by the court in the scoring process would be an
inappropriate intervention in the
appointed functionaries’ area of
governmental operation and would run the danger of impermissibly
blurring the distinction between
review and appeal.
There is also no merit
in APS’s contention that SPS’s tender should have been
disqualified by reason of no audited financial
statements having
been attached to the tender submissions. Loghdey is a natural
person and SPS is his trading name for present
purposes. On a
proper interpretation of the request for proposals - which should
occur with due regard to the context provided
by the regulatory
framework and the SCMP - it is apparent that only persons which are
required by law to produce audited annual
financial statements (e.g.
companies) were subject to this requirement.
The City did indeed fail
to comply with paragraphs 210-214 of the SCMP. It awarded the
contract to SPS without any indication in
the relevant notification
letters, either to SPS or to the unsuccessful tenderers, of the
matters set out in paragraph 211.1- 211.4
of the SCMP. Whether this
non-compliance was material in the sense of justifying an
interference with the decision to accept the
bid on judicial review
depends on whether, but for the conclusion of the tender contract
with SPS, APS would otherwise have enjoyed
a right of appeal in
terms of s 62 of the Local Government: Municipal Systems Act 32
of 2000 (‘the Systems Act’). That
poses a legal question the
answer to which lies in an interpretation of the relevant statutory
provision.
Mr
Joubert
SC,
who appeared (together with Mr
Spamer
)
for SPS submitted that the legal question had already been answered
for present purposes in a judgment by Le Grange J delivered
early last year, now reported
sub
nom.
Loghdey
v Advanced Parking Solutions CC and Others
[2009] ZAWCHC 15
;
2009 (5) SA 595
(C). I do not agree.
In
Loghdey
;
Le Grange J granted an application by SPS for an order
declaring that APS had no right of appeal in terms of s 62 of
the Systems Act against the decision by the City’s Bid
Adjudication Committee to award the tender to SPS. In arriving at
this
conclusion the learned judge found that the SCMP did not in
itself afford a right of appeal,
16
and he pointed
17
to the distinction between the current case and that of
Syntell
(Pty) Ltd v City of Cape Town and Another
[2008] ZAWCHC 120
(13 March 2008), relied upon by APS, in which the
City had expressly made its award of the tender contract subject to
a right of
appeal by the unsuccessful tenderers.
18
I am in respectful agreement with those findings.
However, those findings
did not address the issue of whether the City had been obliged in
law to deal with the current matter consistently
with paragraphs
210-214 of the SCMP, as it had dealt with the tenderers in
Syntell
.
Le Grange J was not called on to deal with that aspect. The
learned judge was clearly cognisant of that, as appears from
the
following remarks at para. [34] of his judgment: ‘
Even
if the City acted incorrectly in not notifying the relevant parties
of a right of appeal, and the signing of the contract with
the
Applicant was legally flawed, unless and until the agreement is set
aside by a court of law, it remains valid and enforceable.
In this
regard see
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
2004
(6) SA 222
[SCA] at page 241 [26]
’.
It is plain that,
applying
Oudekraal
principles, Le Grange J was unwilling in
Loghdey
to entertain the
collateral
challenge to the City’s decision evidently mounted by APS and the
other respondents as part of their opposition to the application
by
SPS for declaratory relief. In the current matter, in distinction
to its position as a respondent in the application before
Le
Grange J, APS –now as applicant - has mounted a
direct
challenge
to the legality of the City’s decision. The challenge is based on
the City’s non compliance with paragraphs 210-214
of the SCMP.
The first ground of review in the current application therefore
calls for an answer to a question which, as mentioned,
Le Grange J
was not called on to determine.
Le Grange J’s
finding that paragraphs 210-214 of the SCMP do not, in themselves,
afford anybody a right of appeal in terms
of s 62 of the
Systems Act is in my view correct. Clause 13.9.1 of the tender
invitation does not add to the position: it
merely purports to
record an understanding (by the City) of the effect of s 62;
not to afford rights under s 62. The
City’s non-compliance
with those clauses can therefore be material only if APS enjoyed a
right of appeal in terms of s 62
by reason of the provisions of
that section read on its own. In such an event, by purporting to
vest accrued rights in SPS before
the lodging and determination of
such an appeal, the City’s non-compliance with paragraphs 210-214
of the SCMP would, while its
result remained in place, unlawfully
oust APS’s ability to use s 62 of the Systems Act to obtain a
viable internal remedy
against the award of the tender contract to
SPS.
The basis for the
existence of paragraphs 210-214 of the SCMP does not arise out of
any requirement of the statutory framework.
19
Bearing in mind that the SCMP is a guideline document produced and
adopted by the City itself, I think that it is relevant to
have
regard to the intended meaning and effect of paragraphs 210-214
thereof assessed against what one is able to infer
20
was a widespread misapprehension by municipalities throughout the
country, including the City of Cape Town, that s 62 of the
Systems Act afforded an internal appeal to anyone able to contend
that their rights were affected by a decision made by a municipal
functionary or political organ acting under delegated authority from
the municipal council.
As I understand the
judgment of the Full Bench in
Reader
and Another v Ikin and Another
2008 (2) SA 582
(C), it held that s 62 of the Systems Act is
nothing more than a codification of the limited circumstances in
which a decision-maker
can, at common law, withdraw or alter its own
decision without infringing the doctrine of
functus
officio
(which determines that once a decision has been made the
decision-maker cannot revisit it). See
Reader
especially at para.s [20]-[21] and [31]-[32]. In
Municipality
of the City of Cape Town v Reader and Others
[2008] ZASCA 130; 2009 (1) SA 555 (SCA)
at para. [36], the majority judgment in the Supreme Court of Appeal
unreservedly and expressly endorsed the reasoning of the Full
Bench
in every respect.
Lewis JA referred
to the
Syntell
judgment in a footnote to her majority judgment in
Reader
in the
SCA. Identifying the factually distinguishing feature of that case,
described above, the learned judge noted that the question
of a
tenderer’s right to appeal as it emerged in that case was not
before the court. As I have already pointed out, the question
in
the form it emerged in
Syntell
is also not before this court.
21
My own view is
paragraphs 210 and 211 of the SCMP, properly construed, assume the
existence of an established right of appeal in
terms of s 62 of
the Systems Act by any unsuccessful tenderer against the decision by
the City to accept a bid, and make provision
for a
spatium
between the notification of that decision and any conclusion of an
agreement awarding the relevant contract in order to permit
the
assumed right of appeal to be effectively exercised. In my opinion
the authoritatively declared proper interpretation of s 62
has
shown up the impracticality of the scheme of those paragraphs of the
SCMP. After all, the publically announced decision to
award a
tender is a final decision within the meaning of the
functus
officio
doctrine.
22
To attach to such decision a note that it is subject to appeal is
not to derogate from its finality. Indeed it is only against
an
effective decision that an appeal ordinarily lies; and there can be
no doubt that the appeal contemplated in paragraph 211 of
the SCMP
is an appeal against the decision to award the tender - not the
resultant conclusion of a contract. The successful tenderer’s
right to conclude the contract arises from the public procurement
authority’s announced decision to accept its bid.
In the result only the
person who has asked or applied for the decision in question may
appeal against it in terms of s 62
of the Systems Act, and any
determination of such appeal may only alter such decision if the
alteration will not derogate from
any rights that may have accrued
to the appellant, or third parties, as a consequence of the
decision. Thus the availability and
ambit of an appeal in terms of
s 62 are extremely limited.
Section 62 is ineptly
drafted
23
and has given rise to great difficulty and confusion. Some may
regret the limiting interpretation given to the provision by the
courts. Certainly the wider, albeit somewhat linguistically
strained, interpretation previously given to it in practice by many
municipalities was in conformance with the trend notable in certain
other jurisdictions to enhance the quality of administrative
justice
by extending the availability of administrative appeals, thereby
reducing the extent to which resort needs to be had by
adversely
affected parties to judicial review, which in many cases is not a
satisfactory alternative to a merits appeal.
24
Be that as it may, the import of the provision has now been
authoritatively declared and therefore, unless and until s 62
of the Systems Act is amended or substituted, it falls to be
construed and applied accordingly.
In the result I have
concluded that APS did not have a right of appeal in terms of s 62
of the Systems Act and that, consequently,
the apparent
non-compliance by the City’s Bid Adjudication Committee with the
provisions of paragraphs 210-214 of the SCMP was
of no moment. (As
mentioned, APS’s case in this respect was advanced on the basis of
alleged non-compliance with an applicable
empowering provision, and
not on the basis of any legitimate expectation on its part that the
relevant provisions would be complied
with. I have therefore not
considered whether a case based on the doctrine of legitimate
expectation could have succeeded, and
express no opinion in that
regard.)
The first review ground
therefore fails.
Turning then to the
grounds of review based on the alleged non-responsiveness of SPS’s
tender (as mentioned this aspect is comprehended
in the second to
fifth grounds of review). I have already noted the requirement of
the PPPFA that a bid must be an ‘acceptable
tender’, as defined,
to qualify to be scored. In this connection clause 14.7.1 of the
request for proposal document (‘the
RFP’) issued by the City
provided:
‘
ELIMINATION OF
NON-RESPONSIVE BIDS
Received bids will be
scrutinised for compliance with the conditions and specifications of
this
RFP
by following the following steps. Non-compliant bids will be
eliminated at each step:
14.7.1.1 Compliance with
the Responsiveness Criteria, Conditions of Tender and Instructions to
Bidders.
14.7.1.2 Compliance with
Pre-Qualification Parameters.
14.7.1.3 Compliance with
requirements, standards and specifications as set in the rest of the
RFP
.’
In view of the
conclusion to which I have come it is not necessary to deal with
each and every one of the many aspects of alleged
non-responsiveness
on which APS relied. Suffice it to say that I was not persuaded
that they all had merit. I propose to deal
only with those aspects
relied on by APS which I consider by themselves, and without regard
to the other alleged deficiencies,
should have resulted in the
rejection by the City of SPS’s tender.
The instructions to
tenderers (which I have read as being synonymous with the
‘
Instructions
to Bidders
’
referred to in clause 14.7.1.1 of the RFP (quoted above) enjoined
that ‘[t]
he
technical
proposals should include the following documents:…..Details of the
proposed Parking Management System. This
must
comply with minimum specifications).
’
(The underlining and emphasis in bold font come from the RFP
itself.) The parking management system sought by the City was
described in conceptual terms in clause 14.1.3 of the RFP. It was
to comprise of two components described respectively as a ‘Back
Office’ component and a ‘Kerbside Parking Operation’. It is
apparent that both components required technical equipment enabling
the accommodation and management of a ‘City Smartcard’,
including ‘reloading and redemption equipment’ and ‘vending

systems’. The RFP indicated that the system required had to
enable the loading and updating of ‘City Cards’ via retail and
other convenient outlets. It stated (in clause 14.2.8 (s.v.
‘Distribution Systems’) that ‘
The
proposed read/write units shall comply with ISO 14443A and ISO
14443B
’.
The requirement of an integrated contact-less smartcard read/write
unit ‘
complying
with ISO 14443A and ISO 14443B
’
was re-iterated in clause 14.2.9 of the RFP (s.v. ‘Collection
Systems (Parking Meters)). Clause 14.2.12 of the RFP provided
(s.v.
‘City Cards (Contact-less smartcard))’ ‘
The
contact-less smartcard cards
must
comply with either ISO 14443A or ISO 14443B
’.
The significance of
compliance with ISO 14443A and ISO 14443B is that the City
wanted the streetside parking attendants to
be equipped with
handheld devices that would be able to read and write to the
different formats of smartcards manufactured by the
HID Corporation
and by Phillips, respectively. (The stipulation of the required
specification with reference to applicable codes
of the
International Standards Organisation (ISO) was consistent with the
requirement of regulation 27 of the statutory framework
and clause
97 of the SCMP.)
The equipment to be
employed in terms of SPS’s tender did not comply with the
technical specification described in the RFP. SPS’s
tender
proposed the use of a device called the OEM50 unit. In an
evaluation report, dated July 2007, presumably to the Bid Evaluation
Committee, by an independent expert consultant appointed by the
City, it was pointed out that the equipment tendered by SPS ‘
clearly
[did]
NOT
25
comply
with the requested standards in the tender request
’.
In regard to SPS’s responses to the requirements of clauses
14.2.8 and 14.2.9 of the RFP, the independent consultant reported
as
follows:
‘
SPS claims full
compliance and have included a read/write device from HID. This
device however can only read ISO 14443A and not write
to an ISO
14443A card. This is therefore viewed as NOT compliant.
It must be noted that
there is NO supporting documentation for this claim and it will
therefore have to be verified.
It must further be noted
that a legal opinion might be required here.’
It would appear that the
initial assessment of the bids submitted resulted in the
identification of three ‘preferred bidders’,
to whom ‘a number
of clarification questions’ were put. In the context of it being
clear that equipment tendered in purported
compliance with the
requirements of clauses 14.2.8 and 14.2.9 had been unequivocally
confirmed to be non-compliant with the technical
specifications, the
‘clarification question’ put to SPS did not read sensibly. It
went: ‘
Issue
:
The proposed read/write unit shall comply with ISO 14443A and ISO
14443B.
Clarification
Required
:
Please verify your claims that you have full compliance with your
proposed read/ write device. It must be noted that there is
no
supporting documentation/ certification for this claim and this
needs to be supplied and verified.
’
The independent
consultant commented on SPS’s response to this ‘clarification
question’ as follows: ‘
Response
:
This bidder has submitted documents substantiating their claims of
compliance. It should however be noted that the read/ write
unit
offered does not fully comply and if selected the City should insist
on the use of the OEM 150 module with the plug in options
giving the
additional parts 3 and 4 of ISO 14443A.
Should
this bidder be selected it is recommended that a live test be
performed at the time of contract negotiations
.
’
The independent expert
concluded the assessment of the answers given by the three
‘preferred bidders’ to the clarification questions’
by
providing a summary in respect of each of them. The summary in
respect of APS concluded: ‘
Technologically
this is a well thought out system that does comply with the
technical requirements.
’
In respect of SPS the summary went as follows:
‘
On the issue of
advanced technology and the selection of the read/write device units
this company has elected to use the OEM 50 unit
from HID which is
non-compliant, but is capable of performing the task. No mention of
any innovative thinking has been demonstrated
and hence this offer is
considered non-compliant.
If the OEM 150 module
from HID with the additional modules for the ISO 14443A parts 3 and 4
were used this bid would be compliant.
The bidder has offered to use
this module but has not indicated what effect this will have on the
offer. This would also resolve
the issue of compliance with the
distribution and collection system.
The issue on Open systems
has not been addressed but if OEM150 were used interoperability could
be guaranteed and then open systems
will develop.
For some reason this
bidder has the answers and capabilities but appears to have chosen to
omit these requirements stating that their
offer is more than
adequate to perform the task.
If this bidder deployed
the OEM 150 unit I would be happy to say that they comply, failing
this, this bid has to remain a non-compliant
technology offer.’
The contract
subsequently concluded between SPS and the City indeed provided for
the use of ‘
An
integrated HID OEM150 with plug-in module or equivalent ISO14443A/B
Smartcard Reader.
’
APS contend that the
tender submitted by SPS was non responsive in that it did not offer
the use of equipment qualifying with the
technical specifications
and that it should have been rejected as failing to qualify as an
‘
acceptable
tender
’,
as defined in the PPPFA. This was an issue that it advanced as one
of its grounds of appeal in proceedings APS purported to
bring in
terms of s 62 of the Systems Act. That appeal was, for reasons
to which I shall return in a different connection
later in this
judgment, not heard. Unidentified officials of the City had,
however, submitted written submissions in regard to
the appeal.
Those submissions suggested that SPS’s non-compliant tender had
been tolerated because of what the officials considered
had been an
ambiguity in the RFP. In this regard reference was made to the
difference in wording between clauses 14.2.8 and 14.2.9
on the one
hand and clause 14.2.12 (all of which have been quoted above). It
was stated that ‘
Given
this ambiguity in the RFP, it would have been unfair to exclude a
bidder on the basis of non-compliance with this requirement.
’
It has to be pointed out that having initially indicated an
intention to oppose the application, the City thereafter decided
rather to abide the judgment of the court. The City Manager at that
stage indicated that an affidavit explaining the City’s
position
would be filed for the assistance of the court. In the event there
is no affidavit in the papers explaining the City’s
position. The
submissions from which I quoted earlier in this paragraph obviously
do not necessarily reflect the City’s attitude;
they do however
seem to give some insight into the approach of those officials
concerned with the evaluation and adjudication of
the bids.
It is plain from what I
have already set out that SPS’s bid was non-compliant with the
technical specifications. The City has
not contended otherwise; nor
could it have. To the extent that written submissions by unnamed
City officials, referred to earlier,
might suggest an explanation
why SPS’s bid was not excluded for non-compliance on that basis I
find it unacceptable. There is
no real ambiguity in the
specification requirements of the RFP. This much is apparent when
one considers the superficial apparent
difference between clauses
14.2.8 and 14.2.9 on the one hand and clause 14.2.12 on the other in
the context of the RFP as a whole.
The intended interoperability of
the smartcard is clearly and repeatedly stated in the RFP. It is
plain that the device units
required would have to be able to both
read from and write to both HID and MIFARE cards. The OEM 50
devices tendered by SPS did
not meet this requirement and, in the
end, a contract was concluded by the City with SPS providing for the
use by SPS of a device
materially different from that which they had
included in their tender.
In failing to evaluate
SPS’s bid, according to its tenor, against the requirements of the
bid specifications, the bid evaluation
committee acted at odds with
regulation 28 of the regulatory framework, discussed in para. [,
above, and therefore in breach of
s 112 of the MFMA.
Furthermore, by proceeding to score the tenders on the basis of
allowing SPS tender to be treated as if
it had tendered a different
device, the evaluation committee scored a tender that was not
‘acceptable’ within the meaning of
the PPFA. In my view the
further consideration of a tender that was manifestly non-complaint
with a material requirement of the
RFP stripped the process of one
of the essential characteristics of the public procurement process;
transparency. A procurement
process that entails the issue of
requests for proposals compliant with
x
,
but considers proposals manifestly not compliant with
x;
in the
process allowing a tenderer who tenders
y
(
y
being less than
x
)
the
opportunity be awarded a contract compliant with
x
cannot be regarded as transparent, fair or competitive within the
meaning of s 217 of the Constitution, or the provisions
of the
other legislation with the same object referred to in the
introductory section of this judgment.
The offer by SPS that
was eventually accepted by the City was not the one made in SPS’s
tender (cf.
Metro
Projects CC and Another v Klerksdorp Municipality and Others
2004
(1) SA 16
(SCA) at para. [15]). In my view the process went awry in
this respect when, instead of excluding the SPS tender from
consideration
when it became apparent from the independent technical
expert’s report of July 2007 that the tender did not comply with
the stated
technical specifications, the City instead engaged in a
so-called clarification process. In the course of the process SPS
was
permitted (if not encouraged) to offer to provide something
materially different from that which had been offered in its tender;
and thereby, quite irregularly, given a second opportunity.
APS contended that the
consideration of SPS’s tender in the circumstances just mentioned
had knock on effects; more particularly
it allowed SPS’s financial
tender to be evaluated in the context of use of equipment that was
cheaper than which SPS was eventually
required to provide. This was
not the usual sort of procurement contract, in terms of which the
City’s interest would be in
the price it had to pay for goods or
services. It was a contract in terms of which the City’s
financial interest was the share
it was looking to receive of the
revenue to be generated by the service provider appointed. It is
conceivable that the percentage
of turnover that a tenderer would be
able to offer would be affected by the tenderer’s margins and that
the cost of equipment
to be used might have a bearing on this.
However, in view of the conclusion to which I have come on a purely
procedural basis
about the constitutional and statutory
non-compliance of the process followed it is unnecessary for me to
enter into the parties’
respective contentions on the costs
question and its possible effects.
For the same reason it
is also unnecessary to consider the allegations that the SPS tender
failed to comply with formal responsiveness
criteria, most
particularly that it was not completed using indelible ink.
While it would also not
have been necessary to deal with the allegations about SPS’s
non-compliance with the pre-qualification
criteria, I do nonetheless
consider it worthwhile to say something in this regard.
Clause 14.6 of the RFP
went as follows:
“
14.6 PREQUALIFICATION
PARAMETERS
Evidence of ability to
perform – furnish supporting information
Potential
Bidders must take note that only those proposals that meet (furnish
supporting information) the following pre-qualification
parameters,
shall
receive further consideration
.
The stipulated requirements must be appropriately satisfied within
one or more of the entities (Consortium, Joint venture) comprising
the bid.
Past
experience and past Projects:
Where these terms are used, bidders
must
only list experience and projects where the bidder had been totally
responsible for all planning and operational aspects of the project.
This shall include amongst others strategic planning, financial
control, sourcing of material, personal matters, operational planning
and execution. False or inaccurate claims may lead to bid being
rejected.
The Bid Evaluation Team
will evaluate whether the proposed systems are acceptable or not.
Parameters:
14.6.1 Proof of available
credit of at least R2 million (Two million Rand) from a registered
financial institution acceptable to the
City or unencumbered
employable assets to a higher value for the specific use of the
Kerbside Management Parking system.
14.6.2 Bidders may in
addition to the above, submit proof of current ownership of all
required equipment or provide a letter of commitment
from suppliers.
14.6.3 Operating
a 24 hour a day, all year toll free call centre. This service may be
outsourced, but the proposed call centre
must
be identified. The call centre, whether provided by the Contractor or
outsourced,
must
have been in operation for at least 1 (one) years. Examples of
typical reports produced, which demonstrate compliance with the
Specification.
(See Draft Memorandum of Agreement, Clause 4
Contractors Responsibilities),
must
be included. The proposed call centre may not be changed to another
without prior approval of Council.
14.6.4 Past
experience in
Kerbside
Parking Management or similar.
Examples of past projects
must
be given, listing location, brief description, type of operation,
names and contact persons (include Telephone Numbers) of clients.
Projects
must
include at least one example that comprises of not less than 1000
(one thousand) parking bays or a major project of similar proportion.
Examples
of previous management reports (including financials)
must
be
submitted.
14.6.5 Past
experience in the operation
and
maintenance of a substantial smartcard based payment system
.
Examples of past projects
must
be given, listing location, brief description, type of operation,
annual turnover, and size of card base, period of operation, names
and contact persons (include telephone numbers) of clients.
14.6.6 Past
experience in the operation of a substantial
Management
Information System and Accounting System.
Information as per previous point to be provided. In addition,
examples of actual past Management Reports to be included.
Identification
can be removed if considered confidential.
14.6.7 Past
experience in
management
of multi-million Rand contracts
.
Examples of past projects
must
be given, listing location, brief description, type of operation,
annual turnover, number of staff, period of operation, names and
contract persons (include telephone numbers) of clients.
14.6.8 Description
of proposed
Management
Information Systems (MIS)
.
Examples where this system is operational as well as copies of
typical management reports to be included, as well as contact details
of client bodies.
14.6.9 Description
of proposed
Accounting
System.
Examples where this system is operational as well as copies of
typical management reports to be included.
14.6.10 Description
of proposed
kerbside
parking management system.
14.6.11 Proposals should
minimise fixed street furniture/equipment.
14.6.12 Description of
proposed City Card and pre-paid credit vending system.
14.6.13 Description
of proposed system to minimise harassment of motorists by informal
parking attendants. Proof that the proposed
system was implemented
elsewhere and that it resulted in a substantial reduction of
harassment
must
be
submitted.
14.6.14 Description of
proposed system to create a safer urban environment ie petty crime.
14.6.15 Description of
proposed MIS to be used. The system should provide relevant
statistics as per the requirements of Section 14.2.
Pg29.
14.6.16 Statement on how
may jobs will be created (in each of the managed areas for which a
bid was submitted), if the proposed bid
is accepted.
14.6.17 Detailed
description of proposed Accounting system to be used. The system
should contain adequate audit control.
14.6.18 Confirmation that
the current City Cards (as held by the public), any new City Cards as
issued by the Contractor, and cash
will continue to be used as
payment medium in the proposed systems.
14.6.19 Confirmation that
the public will receive a printed Tax Invoice when concluding a
parking transaction.
14.6.20 Names,
particulars and CV’s of the staff that will be employed at
management level.
14.6.21 Confirmation
that, at the end of a contract period, any new City Cards issued
during the contract, will be re-useable by any
new contractor,
without any further reliance on or involvement of the Contractor or
his/her agents, and without any intellectual
property rights being
retained by the Contractor or any other party to enable such use.
14.6.22 Confirmation
that, at the end of the contract period, the following will be
transferred to the City, at no cost, in a format
acceptable to the
City, without any intellectual property rights being retained by the
Contractor or any other party:
14.6.22.1 All security
keys
14.6.22.2 The complete
database of all parking bays
14.6.22.3 The
complete database of all parking transactions during the contract”
Careful consideration of
clause 14.6 reveals that many of its provisions do not bear on what
would ordinarily be regarded as pre-qualification
parameters,
properly so-called. The requirement that a tenderer must have
previous experience in large contracts of a similar
nature might
properly be a pre-qualification criterion, but a description of the
systems to be used in the project goes to the
content of the
proposal to be submitted rather than any pre-qualifying parameter
establishing a tenderer’s qualification to competently
make a
submission. I have mentioned this aspect because it is but an
example –one of many that can be found - which highlights
the poor
quality of the RFP document. This is something that the City should
consider in the context of any decision as to how
it should move
forward with the project in the context of the order that is to be
made setting aside the award to SPS. Any procurement
decision made
on the basis of a process set in train by a badly flawed request for
proposals document is significantly more vulnerable
to impugnment by
dissatisfied parties than one based on a request competently
composed by the bid specification committee. A badly
put together
request for proposals compromises the ability of bidders to submit
‘acceptable tenders’ as well as the ability
of bid evaluation
committees to perform their tasks in a manner that accords with the
demands of the applicable legal framework.
Before moving on from
the so-called prequalification parameters, it remains only to note
that the SPS tender was not supported by
an example of any previous
contract in which SPS had been involved comprising of not less than
1000 (one thousand) parking bays
or a major project of similar
proportion. SPS’s tender should also have been disqualified on
this account had the process been
conducted faithfully in accordance
with the stipulated requirements in the RFP.
APS applied to strike
out parts of the answering papers of SPS. The essential nature of
the complaint underlying this application
was the prejudicial nature
of SPS’s adoption by reference and incorporation into its own
affidavit of the content of the written
submissions by unnamed City
officials in the s 62 appeal proceedings mentioned earlier.
26
As by now apparent I was able to determine this application on the
basis of the evident failure by the SPS tender to comply with
the
technical specifications. The written submissions of the City
officials, which were annexed to APS’s founding papers in
the
review application, were referred to in this connection, but, as
pointed out, they did not derogate from the conclusion impelled
by a
consideration of the evidence of the deviation between the RFP and
the proposal submitted. In the circumstances, and as both
sides
argued it
en
passant
the merits of the principal application, I have found it unnecessary
to deal with the striking out application. There was also
an
application by SPS to strike out some unfortunately expressed, and
it would appear inaccurate, remarks about Mr Loghdey’s
qualification as an ‘historically disadvantaged individual’ as
defined in the Preferential Procurement Regulations. Reliance
on
these averments was disavowed at the commencement of the hearing and
I therefore also find it unnecessary to deal further with
that.
The last matter to be
addressed is an issue which ordinarily would have been addressed at
the outset; that is whether APS’s application
should be
entertained at all regardless of its merit. I am dealing with
this issue at the end rather than the beginning of
the judgment
because it is more convenient to explain my decision in respect of
it against the background of the preceding discussion
of the merits
of the application, most particularly in regard to the first review
ground. Indeed I dealt with the first review
ground more fully than
I would otherwise have done because of my apprehension of a
connection of the issues entailed in it with
the delayed institution
by APS of the review application itself.
Section 7 of PAJA
prescribes that applications for the judicial review of
administrative action must be instituted within a reasonable
time
and, where no internal remedies exist, no later than 180 days after
the date on which the person concerned was informed of
the
administrative action, became aware of the action and the reasons
for it, or might reasonably have been expected to have become
aware
of the action and the reasons. It is common ground that the current
application was instituted outside that time. APS therefore
applied
in terms of s 9(b) of PAJA for an extension of that time. The
court is empowered to grant the relief sought by APS
‘where the
interests of justice so require’.
SPS opposes the grant of
any order in terms of s 9 of PAJA. The opposition is based on
a number of grounds; essentially, (i) that
the application
should have been made at the outset either before or at the same
time as the application for review; (ii) the
length of the
delay and (iii) the public interest in finality.
The relevant provisions
of ss 7 and 9 of PAJA codify the rule of administrative law at
common law commonly known as the ‘delay
rule’. Cf.
Ntame
v MEC for Social Development, EC and Two Similar Cases
2005 (6) SA 248
(E); ([2005]
2 All SA 535)
at para. [13].
Accordingly the considerations that would be weighed in the second
leg of the delay test expounded in cases like
Wolgroeiers
Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad
1978 (1) SA 13
(A) and
Setsokosane
Busdiens (Edms) Bpk v Voorsitter, Nasionale Vervoerkommissie, en 'n
Ander
1986 (2) SA 57
(A) at 86-7 are the same as those which fall to be
weighed in determining what ‘the interests of justice require’
within the
meaning of s 9 of PAJA.
The late institution of
the application for judicial review was essentially as a consequence
of the misdirected view taken by APS
that it enjoyed an appeal in
terms of s 62 of the Systems Act. It persisted in this view
notwithstanding written advice from
the City that on the latter’s
understanding of the import of the Full Bench judgment in
Reader
an internal remedy in terms of s 62 was not available. The
City was inconsistent in its attitude, however. This was evidenced
by the City subsequently agreeing to entertain an appeal, apparently
in contradiction of its advised understanding of the
Reader
judgment. The City’s change in stance might have been due to the
effect of the judgment in
Syntell
,
which was delivered after the Full Bench judgment, but before the
SCA judgment in
Reader
.
The SCA judgment in
Reader
might in turn have been read to expressly leave open the question of
whether an unsuccessful tenderer enjoyed a right of appeal
in terms
of s 62 of the Systems Act. Suffice it to say there was
evidently - and perhaps understandably - widespread uncertainty
and
confusion on the issue.
The forensic history of
the treatment of s 62 of the Systems Act reviewed earlier in
this judgment is such that it would be
unfair to hold APS’s belief
that it enjoyed an appeal under the provision against it. Section 7
of PAJA forbids the institution
of judicial review proceedings
before internal remedies have been exhausted. An exception to the
prohibition is only allowed in
exceptional circumstances. See
Nichol
and Another v Registrar of Pension Funds and Others
[2005] ZASCA 97
;
2008 (1) SA 383
(SCA). This is also a factor that
weighs in the balance in favour of an understanding of APS’s
delay. APS certainly did not
tarry after Le Grange J granted
the declaratory relief in
Loghdey
,
supra, which made it clear that in the peculiar circumstances it
could not viably pursue an internal appeal under s 62 of
the
Systems Act. I mention in passing that I do not consider that APS
can be criticised for not instituting proceedings earlier
to set
aside the selection of SPS as ‘preferred bidder’. The selection
was part of the tender adjudication process and it
would have been
inappropriate in my view for SPS to institute proceedings in respect
of an inchoate administrative process, which
would not necessarily,
at the stage of the selection of a preferred bidder, have resulted
in the award of the tender contract to
SPS.
There has been no
cognisable prejudice entailed as a consequence of the delay. The
City has put in place interim measures in terms
of which both SPS
and APS have been awarded kerbside parking management contracts in
various parts of the municipal area on a month
to month basis
pending the final resolution of the pending dispute concerning the
legality of the award of the tender contract
to SPS. Another factor
that has to be taken into account is that APS succeeded in obtaining
an interim interdict from this court
(per Maqubela AJ) prohibiting
the implementation of the tender contract pending the determination
of this review.
In all the circumstances
I am satisfied that the interests of justice require that paramount
consideration should be given to the
upholding of the objects of
s 217 of the Constitution and the principle of legality.
SPS’s counsel
contended that the application for relief in terms of s 9 of
PAJA had been brought too late. In this regard
it needs to be
mentioned that a notice of application formally seeking the relief
was delivered only at argument stage. Mr
Joubert
submitted that this court should follow the approach of the Eastern
Cape High Court in
Directory
Solutions CC v TDS Directory Operations (Pty) Ltd and Others
[2008] ZAECHC 22 (4 April 2008)
.
In that matter Jansen J held that it was ‘wholly untenable’
for an applicant which had brought judicial review proceedings
outside the time limit laid down in s 7 of PAJA to deal with
the delay only in reply and to make application in terms of s 9
only at that stage. This approach is consistent with the approach
in some judgments dealing with the delay rule under the common
law;
see e.g.
Scott
and others v Hanekom and others
1980
(3) SA 1182
(C) at 1192G-1193G. While I agree that any leave
required in terms of s 9 of PAJA should in general be sought in
the notice
of motion, there is no need for a fixed rule in this
regard – any more than there was in analogous circumstances under
the common
law. In the current matter APS did deal with the delay
in its founding papers and did indicate therein that an application
in
terms of s 9 would be made at the hearing. This matter is
therefore in any event factually distinguishable in the relevant
respects from
Directory
Solutions
.
The following orders
will issue:
The main application in
case No. 100/09 for an order directing the City of Cape Town to
proceed with the implementation of the
kerbside parking management
contract concluded with the applicant on 3 July 2008 is
dismissed.
An order is granted in
terms of
s 9
of the
Promotion of Administrative Justice Act 3
of 2000
extending the period within which the applicants in the
counter-application might institute proceedings for the judicial
review
and setting aside of the decisions by the City of Cape Town
to accept the bid of
Mohammed
Zunade Loghdey trading as Street Parking Solutions (‘SPS’) in
tender BID 311 S/2006/07 and to conclude the tender
contract with
him to the date on which the counter-application was instituted.
The
decision
by the City of Cape Town
to
accept the bid of
SPS
in tender BID 311 S/2006/07 and to conclude the tender contract
with SPS for the provision of kerbside parking management
services
is reviewed and set aside.
SPS
is ordered to pay the counter-applicants
’
costs of suit, including the costs of two counsel.
The
costs referred to in paragraph (iv) shall include the
counter-applicants
’
costs of suit in the main application (if any) and the costs
reserved for later determination in terms of the order made by
the
late Mr Acting Justice Maqubela on 16 February 2009.
No order is made in
respect of the costs of the striking out applications.
A.G. BINNS-WARD
Judge of the High
Court
1
See reg. 1
of the regulatory framework.
2
See reg. 19
of the regulatory framework.
3
See reg. 21
of the regulatory framework.
4
See reg.24
of the regulatory framework
5
See reg. 26
of the regulatory framework. See P. Bolton
The
Committee System for Competitive Bids in Local Government
PER/PELJ
2009 12 (2) 57
(http://www.saflii.org.za/za/journals/PER/2009/8.html) for a useful
summary and discussion of the regulatory
framework’s provisions in
respect of the committee system.
6
See reg
26 of the regulatory framework.
7
See reg 27
of the regulatory framework.
8
See
reg. 27(3) of the regulatory framework.
9
See
reg. 28(1)(a)(i) of the regulatory framework.
10
See reg. 28(1)(b)
of
the regulatory framework.
11
See
s 114
of the MFMA.
12
Unless
determined otherwise by the Minister of Finance; see reg. 2(2) of
the Preferential Procurement Regulations (published under
GN R725 in
GG 22549 of 10 August 2001).
13
Cf.
Chairperson,
Standing Tender Committee and Others v JFE Sapela Electronics (Pty)
Ltd and others
2008 (2) SA 638
(SCA) at para. [11].
14
Section 1
of Act 5 of 2000.
15
Clause
13.9.1 of tender invitation provided (insofar as relevant):
‘
13.9.1 Appeals
In
accordance with Section 62 of the Municipal Systems Act (Act 32 of
2000), the award of this contract is subject to a 21-day
appeal
period.
Any
appeals
must
be submitted in writing to the City’s Appeals office, accompanied
by a copy of the letter about which the appeal is being lodged,
addressed to the City Manager c/o Director: Legal &
Administration, for the attention of …
Any
appeal
must
be submitted within 21 days of the notification of the
contract
award.
’
16
See para.
[31] of
Loghdey
,
supra.
17
At para.s
[27] and [32] of
Loghdey
,
supra.
18
The distinction being that in
Syntell
the successful tenderer had been informed that the decision to award
it the tender would not become effective until after the expiry
of
the 21 day period afforded for appeals to be brought in terms of the
Systems Act and in the event of any such appeal being lodged,
until
after the determination of the appeal.
19
Reg. 49 of
the regulatory framework, which provides:
‘
Objections
and complaints
The supply
chain management policy of a municipality or municipal entity must
allow persons aggrieved by decisions or actions taken
by the
municipality or municipal entity in the implementation of its supply
chain management system, to lodge within 14 days of
the decision or
action a written objection or complaint to the municipality or
municipal entity against the decision or action.
’
does
not appear to me to relate to s 62 of the Systems Act.
Firstly, it refers to objections and complaints, not appeals;
and
secondly, it affords a time period for the lodging of such
complaints or objections which is different from that allowed by
the
Systems Act for the lodging of appeals. To the extent that the
judgment in
Total
Computer Services (Pty) Ltd v Municipal Manager, Potchefstroom Local
Municipality and Others
[2007] ZAGPHC 239
;
2008 (4) SA 346
(T) at para.s [65]-[74] appears to hold differently,
I respectfully differ. The case in
Total
Computer Services
appears
in any event to have proceeded on the basis of an acceptance that an
appeal in terms of s 62 of the Systems Act was
available,
ex
lege
, to an unsuccessful
tenderer.
20
From the
Reader
case
(2008 (2) SA 582
(C) and
[2008] ZASCA 130
;
2009 (1) SA 555
(SCA)) and from
judgments in matters such as
Darson
Construction (Pty) Ltd v City of Cape Town
2007
(4) SA 488
(C) and
Total Computer
Services
supra. If one
has regard to the fact that the Systems Act predates the SCMP by a
few years, as well as the inference which may
be drawn from the
content of judgments such as
Darson
,
that the City had been routinely affording s 62 appeals to
unsuccessful tenderers, the basis for the insertion of paragraphs
210-214 in the SCMP is readily understandable. The role of those
paragraphs in the context of s 62 as it has been interpreted
by
the SCA and the Full Bench of this court in
Reader
is, in contrast, by no means sensibly apparent.
21
The judgment in the
Syntell
matter determined that a municipality might, by framing its decision
in a manner so as to suspend its effect pending an appeal
in terms
of s 62 of the Systems Act thereby, its own volition,
effectively afford a right of appeal to a person who would
otherwise
not have had an appeal under that provision.
22
See
Hoexter,
Administrative
Law in South Africa
247-8; De Ville
Judicial
Review of Adminstrative Action in South Africa
69-70.
23
This no doubt explains the SCA’s determination in
Reader
that there was no ‘viable’ appeal remedy available; thereby
reconciling, as far as it is possible to do sensibly, s 62(1),
which appears in fairly wide terms to extend a right of appeal, and
s 62(3), which excludes the appellate authority’s ability
to
effectively determine any such appeal against a decision which has
vested rights in any person other than the appellant.
24
Compare the
workings of the Administrative Review Tribunal in Australia and the
two -tier tribunal system established in the United
Kingdom
under
the Tribunals Courts and Enforcement Act 2007.
25
The c
apital
letters and bold print have been replicated from the report itself.’
26
See para.
[, above.