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IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE DIVISION, EAST LONDON CIRCUIT COURT
Case No.: 2025-162579
In the matter between:
UTILITIES WORLD (PTY) LTD Applicant
and
BUFFALO CITY METROPOLITAN MUNICIPALITY First Respondent
THE MUNICIPAL MANAGER,
BUFFALO CITY METROPOLITAN MUNICIPALITY Second Respondent
CONTOUR TECHNOLOGY (PTY) LTD Third Respondent
CONLOG SOLUTIONS (PTY) LTD Fourth Respondent
ONTEC SOLUTIONS (PTY) LTD Fifth Respondent
MOSIMA IT SOLUTIONS CC Sixth Respondent
IDEAL PREPAID (PTY) LTD Seventh Respondent
MBL PAZONITE JV Eighth Respondent
SYNTELL (PTY) LTD Ninth Respondent
SPECTRUM UTILITY MANAGEMENT (PTY) LTD Tenth Respondent
SANDULELA EASYPAY JV Eleventh Respondent
JUDGMENT
COLLETT J:
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Introduction
[1] This is an application for the judicial review of decisions taken during a municipal
procurement process. The applicant, Utilities World (Pty) Ltd, challenges its
disqualification from Tender CE580 (hereinafter referred to as the ‘Tender’) issued by
the first respondent, Buffalo City Metropolitan Municipality (first and second
respondents are hereinafter referred to as the ‘ Municipality’), for the supply,
installation, management and maintenance of a prepayment electricity vending system
incorporating third- party collection services. The third respondent, Contour
Technology (Pty) Ltd, was ultimately awarded the Tender.
[2] The applicant was not a newcomer to the services concerned. It had provided electricity
vending services to the Municipality under Contract CE266 since August 2017. It
tendered for CE580 when the Municipality sought to procure those services for a further
period of three years. The applicant’s bid did not progress beyond the functionality
stage. It was informed that it had failed to achieve the prescribed functionality
threshold.
[3] The applicant contended that despite requests it was not at that stage furnished with the
reasons for its disqualification or the evaluation record. When further material
subsequently became available, including a ruling on what had been described as an
‘objection and/or appeal,’ the applicant’s disqualification was attributed to the alleged
failure to provide customer registration material, a comprehensive business and project
implementation plan inclusive of a Gantt chart. The applicant maintained that the
relevant material had in fact formed part of its bid.
[4] The Municipality contended that although material dealing with those subjects was
contained in the applicant’s bid, it did not substantively demonstrate compliance with
the compulsory requirements of the Tender. The third respondent supported that
the compulsory requirements of the Tender. The third respondent supported that
position and contended that the material relied upon in respect of customer registration
did not provide the detailed self-service registration procedure required by the criterion
(c).
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[5] The distinction is important as the dispute is not confined to whether particular
documents could be found amongst the pages of applicant’s tender but extends to what
the relevant decision maker actually decided, the reasons for that decision, whether
those reasons were adequately disclosed, whether the decision rested upon a material
error of fact or a failure properly to consider material before the Municipality and
whether any irregularity was material to the procurement process.
[6] A further complication arose from the Municipality’ s internal processes. The applicant
was led by the Tender documentation and subsequent correspondence to pursue an
objection and what it understood to be an appeal under section 62 of the Local
Government: Municipal Systems Act 32 of 2000 (hereinafter referred to as the ‘Systems
Act’). The Municipality’ s position is that there was no appeal under section 62 because
the award was made by the City Manager in the exercise of the accounting officer’s
original procurement powers. However, it accepted that clause 35.2 of the General
Conditions of Tender referred to a right of appeal but averred that this was subject to
the availability of such an appeal under section 62.
[7] These events generated several subsidiary disputes. They included an application by
the applicant to amend the relief sought, an application to strike out portions of third
respondent’s answering papers, the legal effect of the internal objection and purported
appeal, the adequacy of the reasons furnished for the applicant’s disqualification and
the applicant’s separate challenge to aspects of third respondent’s bid. Those issues are
dealt with infra insofar as they remain necessary for determination.
Issues for determination
[8] The papers are extensive and the litigation has acquired a degree of procedural
complexity. However, the issues requiring determination are capable of being identified
with some precision.
with some precision.
[9] At the outset, there are two interlocutory matters. The first concerns the applicant’s
application to amend its notice of motion. The amendment corrects the date of the
impugned decision and of greater significance, it formulates alternative relief
depending upon whether an internal appeal in terms of section 62 of the Systems Act
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was available. The amendment also addresses the appropriate destination of any
remittal
[10] The second is the applicant’s application in terms of Rule 6(15) of the Uniform Rules
of Court (hereinafter referred to as the ‘ Rules’) It concerns allegations introduced by
the third respondent relating to alleged additional deficiencies in the applicant’s bid and
allegations of collusive or non-independent bidding. The Court must determine whether
the identified material should be str uck out and to the extent that it is not so struck,
whether there is any purpose for which it may legitimately be considered in these
review proceedings.
[11] The first substantive issue concerns the reasons for the applicant’s disqualification. The
applicant was initially informed only that it had failed to attain the required
functionality threshold. The later ruling by Ms. Mashiya stated that the applicant ha d
failed to provide the required customer registration material and a comprehensive
business and project implementation plan inclusive of a Gantt chart. The Municipality’ s
case in these proceedings is materially different as it is averred the documents were
present but did not substantively satisfy the relevant Tender requirements.
[12] This gives rise to the related question whether the applicant was furnished with
adequate reasons as contemplated in section 5 of PA J A and if not, whether the
presumption in section 5(3) has been rebutted. In determining this issue, it will be
necessary to consider what constitutes the administrative decision under review, who
made it, whose reasons are relevant and whether the evidence subsequently given by
Mr. Peter establishes the reas ons which informed that decision or amounted to an
impermissible post hoc rationalization. The applicant expressly advances inadequate
reasons and post hoc rationalization as its first ground of review.
[13] The second ground concerns an alleged material mistake of fact and failure to consider
[13] The second ground concerns an alleged material mistake of fact and failure to consider
relevant material. The applicant contends that the customer registration material,
implementation plan and Gantt chart were in fact contained in its bid and that insofar
as its disqualification proceeded upon their non -submission, the decision rested upon
an objectively incorrect factual premise. The Municipality disputes the characterization
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of the original decision in those terms and contends that the material was considered
but did not demonstrate substantive compliance.
[14] This requires the Court where necessary, to examine the requirements of criteria (c) and
(h) and the material submitted by the applicant. Criterion (c) concerned customer
registration through the stipulated channels and a detailed customer registration
procedure whilst criterion (h) required a comprehensive business and project
implementation plan incorporating a Gantt chart. The question is not simply whether
documents bearing those descriptions existed but what consequence followed from the
evidence concerning their presence, consideration and substantive content.
[15] The third ground is the alleged failure to seek clarification. The applicant relies upon
clause 14 of the General Conditions of Tender and contended that if the evaluators were
uncertain either as to where the relevant material appeared in the bid or as to whether
it adequately addressed the compulsory requirements, then in such circumstances,
fairness and rationality required clarification to be sought before the bid was rejected.
The Municipality and the third respondent dispute that the clause imposed such an
obligation particularly if what was lacking was substantive compliance rather than
clarification of material already submitted.
[16] A separate issue concerned section 62 of the Systems Act and the identity of the decision
maker. This issue was significant during the proceedings because the applicant had
initially proceeded on the basis that an internal appeal under section 62 was available.
It was subsequently clarified that the City Manager, acting as accounting officer, had
made the award in the exercise of an original statutory power. By the time the matter
was argued there was no longer any material dispute that a section 62 appeal was
accordingly not available. The issue remains relevant to the declaratory relief sought,
accordingly not available. The issue remains relevant to the declaratory relief sought,
the procedural course followed by the applicant, the purported objection and appeal
process, and costs.
[17] The Municipality further contended that the dispute between the parties was
compromised by the agreement reached between them and embodied in the earlier
Court Order. The Court must therefore determine whether that agreement constituted a
compromise (transactio) of the underlying procurement dispute with the consequence
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that the applicant is precluded from pursuing some or all of the review relief now
sought, alternatively, whether the agreement was merely an interim procedural
arrangement intended to regulate the position pending the determination of the
objection and/or appeal and the review proceedings.
[18] The applicant also challenges the award to the third respondent. That challenge is
distinct from the legality of the applicant’s own disqualification. It concerned whether
the Municipality applied the Tender’ s peremptory requirements consistently, the third
respondent’s reliance upon WireIT, the nature of the vending mechanism offered, real
time online vending, the digital delivery of tokens and the prohibition against customer
facing charges. The applicant char acterized this as an unequal application of
peremptory Tender requirements.
[19] The Court must determine the just and equitable remedy should one or more review
grounds be established. This will include whether the impugned decision and
consequential award should be set aside, the appropriate level within the Municipality
to which the matter should be remitted for reconsideration and whether any transitional
arrangement is necessary to preserve the uninterrupted provision of electricity vending
and revenue collection services pending a lawful determination. Finally, the question
of costs, including the costs occasioned by the interlocutory applications, the parties’
respective conduct in the procurement dispute and subsequent litigation requires
determination.
Factual matrix
[20] The applicant is a provider of prepaid electricity vending and related revenue collection
services. Prior to the procurement process, being the subject of this review, it rendered
such services to the Municipality under an existing contract. Accordingly, it was the
incumbent service provider when the Municipality embarked upon a fresh procurement
process for those services.
process for those services.
[21] The Municipality invited bids under Tender CE580 (hereinafter referred to as the
‘Tender’) for the provision of an electricity prepayment vending system and associated
third party collection services. The Tender contemplated the appointment of a service
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provider for a period of three years. The applicant submitted a bid as did the third
respondent and other bidders.
[22] The Tender prescribed a staged evaluation process and of relevance to this application
was the functionality stage. Certain requirements were identified as ‘ Firm
Requirements’ and were compulsory. A bidder which failed to satisfy the prescribed
functionality requirements would not proceed further in the evaluation process. Two
of those requirements are of particular significance to these proceedings. Criterion (c)
concerned customer registration and required written evidence relating to customer
registration facilities and procedures and Criterion (h) required a comprehensive
business and project implementation plan, including a Gantt chart addressing specified
aspects of implementation. The precise content and proper application of those
requirements are in dispute and are dealt with later in this judgment.
[23] The applicant’s bid was evaluated by the Bid Evaluation Committee (hereinafter
referred to as the ‘ BEC’) and did not progress beyond the functionality stage. The
evaluation material subsequently produced records a ‘ No’ against the requirements
upon which the applicant’s bid failed without setting out any reasoned analysis for that
conclusion. The BEC made its recommendation to the Bid Adjudication Committee
(hereinafter referred to as the ‘BAC’) who recommended to the accounting officer that
the Tender be awarded to the third respondent for an amount of R91 683 530.05. A letter
of appointment was issued to the third respondent on 24 July 2025. The third respondent
accepted the appointment by signature on 30 July 2025. The letter provided that the
contract would become effective upon acceptance by the successful bidder.
[24] The applicant was not informed of its unsuccessful bid until 11 August 2025 when it
was notified that it had failed to attain the required functionality threshold. The
was notified that it had failed to attain the required functionality threshold. The
notification did not identify the requirement which had not been satisfied, the score
allocated, any document considered absent or inadequate or the reasoning underlying
the evaluation. On 13 August 2025 the applicant lodged an objection and requested
reasons for its disqualification together with the relevant evaluation material. It also
sought an undertaking that the award would not be implemented before its objection
and any appeal had been determined. Further correspondence followed on 19 and 21
August 2025 none of which elicited a substantive response from the Municipality.
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[25] At that stage the applicant proceeded on the understanding derived, inter alia, from the
Tender documentation that an appeal under section 62 of the Systems Act was available.
On 1 September 2025 being within 21 days of the notification of its unsuccessful bid,
it lodged a document styled as a section 62 appeal. In the absence of particularized
reasons for its disqualification, the appeal addressed the functionality requirements
broadly and sought to demonstrate criterion by criterion that its bid complied therewith.
[26] It is noteworthy that at this stage the third respondent had already received and accepted
its letter of appointment. The applicant states that it became aware through reports from
other suppliers that the third respondent had been appointed. On 2 September 2025 the
applicant addressed further correspondence to the Municipalit y seeking confirmation
of whether a letter of appointment had been issued and, if so, when and to whom. The
situation led to the institution of these proceedings with Part A directed at preserving
the position pending the determination of the applicant’s objection and/or appeal and
the review in Part B. The proceedings thereafter developed through the production of
the Rule 53 record, supplementary affidavits and the interlocutory applications as
referred to supra.
[27] Significantly, the Rule 53 record shed further light on the basis upon which the applicant
had been excluded from the procurement process. The BEC documentation itself
contained no detailed reasoning beyond recording non- compliance with the relevant
requirements. A subsequent ruling by Ms. Mashiya delivered during the Municipality’ s
objection process stated that the applicant did not as part of its bid provide the required
customer registration material as well as the comprehensive business and project
implementation plan, including a Gantt chart.
[28] It is now common cause that documents relating to customer registration, an
[28] It is now common cause that documents relating to customer registration, an
implementation plan and a Gantt chart were physically contained in the applicant’s
Tender submission. The significance of that fact remains sharply disputed. The
applicant contended that its disqualification proceeded upon the erroneous premise that
the documents had not been submitted. The respondents contend that physical inclusion
of documents did not establish compliance as what was required was material which
substantively satisfied the compulsory Tender criteria.
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[29] That distinction lies at the heart of a substantial part of the review. It is necessary before
considering this to complete the procedural history because the way the applicant’s
objection and purported appeal were dealt with, the subsequent identification of the
decision-maker and the interlocutory proceedings bear directly upon several of the
issues identified supra.
The internal process and proceedings
[30] The applicant thereafter approached this Court for urgent relief. On 25 September 2025,
an Order was granted by agreement before Kotze AJ regulating the position pending the
determination of Part A. In terms thereof the Municipality and the third respondent were
restrained from implementing Tender CE580 whilst the applicant was to continue
rendering the existing prepaid electricity vending service in terms of CE266.
[31] The Order did considerably more than preserve the status quo. It required the
Municipality to determine all timeous objections and appeals within a reasonable time
and to furnish written decisions with reasons to the objectors and the parties. Within ten
days thereafter the Municipality was required to deliver the Rule 53 record of the entire
Tender process.
[32] Significantly, the Order expressly contemplated the continuation of the litigation
thereafter. The applicant was authorized to supplement its papers without seeking
condonation, amend its notice of motion and seek the enrolment of Part A. Provision
was also made for an abridged timetable for the delivery of answering and replying
affidavits as well as heads of argument.
[33] The preservation mechanism was similarly directed towards ensuring that the applicant
could return to Court should the Municipality , before the determination of Part A,
confirm, vary, substitute or withdraw an award relating to CE580. In that event, the
Municipality was required to give the parties 20 days’ written notice before taking
Municipality was required to give the parties 20 days’ written notice before taking
implementation steps. If the applicant approached the Court during that period,
including by supplementing Part A and seeking its re -enrolment, the standstill would
continue pending the determination of Part A.
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[34] The Order further permitted the applicant to join interested and affected parties,
required the preservation of the records relevant to CE580 and CE266 and expressly
contemplated that directions could subsequently be sought for the enrolment of Part B.
All questions of costs were reserved.
[35] Pursuant to the Order of 25 September 2025, the Municipality appointed Advocate Z
Nxazonke-Mashiya to consider and determine the applicant’s objection and/or appeal.
On 22 October 2025 the City Manager transmitted Mashiya’s ruling to the applicant.
The covering communication recorded that her appointment had been made consequent
upon the Court Order requiring the Municipality to determine all timeous objections
and to furnish written decisions with reasons.
[36] Mashiya identified two compulsory requirements as the basis upon which the
applicant’s bid had been rejected, more particularly, customer registration, described as
the ‘ primary customer interface’ and a comprehensive business and project
implementation plan. In relation to the former, she recorded that the required interface
comprised a website or portal, contact centers and walk -in centers supported by
declarations from clients to whom the bidder had provided such services and a detailed
customer registration procedure document.
[37] As to the second requirement, Mashiya recorded that the required business and project
implementation plan had to address the supply, installation and maintenance of the
electricity prepayment vending system; the implementation of self -service, assisted
service and payment gateway services; and the implementation of third-party collection
services. The required evidence included a Gantt chart detailing those matters. Her
ruling states that the applicant ‘did not, as part of its bid, provide these’.
[38] Mashiya reasoned that it was for the Municipality as the organ inviting tenders to
[38] Mashiya reasoned that it was for the Municipality as the organ inviting tenders to
prescribe the prerequisites for a valid tender and that non-compliance with a prescribed
condition ordinarily rendered a tender unacceptable unless the condition was
immaterial, unreasonable or unconstitutional. She found nothing of that nature in the
requirements with which she considered the applicant to have failed to comply. She
accordingly upheld the Municipality’ s decision and dismissed the applicant’s ‘objection
and/or appeal’.
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[39] The terminology employed in the ruling is relevant to what followed. Neither the City
Manager’s covering letter nor Mashiya’s ruling distinguished between the applicant’s
objection and its purported appeal with both repeatedly referred to an ‘objection and/or
appeal’ and neither did the ruling purport to identify Mashiya as the person who had
taken the original decision to disqualify the applicant’s bid. She was evidently
appointed after the event to determine the challenge brought against that decision.
[40] The Rule 53 record subsequently disclosed the B E C ’s report dated 23 June 2025. The
report records that the evaluation process included an assessment of administrative,
legal, technical, compliance, responsiveness and functionality requirements. The
minimum requirements included that bidders demonstrate the requisite experience in
providing the relevant prepaid electricity and third- party collection services and that
they comply with all compulsory firm requirements.
[41] The functionality assessment comprised several criteria expressly described in the
report as ‘all compulsory’ among which were customer registration described as the
‘Primary Customer Interface ’ and the provision of a comprehensive business and
project implementation plan. The BEC’ s functionality findings recorded the applicant
as having failed both of those criteria. Against ‘ Customer Registration (Primary
Customer Interface)’ the applicant was recorded as ‘No’. It was similarly recorded as
‘No’ against the requirement to provide a comprehensive business and project
implementation plan. Other bidders, including the third respondent, were recorded as
compliant with those requirements.
[42] This finding was consequential as the report expressly provided that bidders who failed
to meet the compulsory functionality criteria would not proceed to evaluation on price
and preference. The price and preference calculations appearing thereafter were
and preference. The price and preference calculations appearing thereafter were
prepared on the hypothetical basis that all bidders were responsive and were required
to be adjusted to exclude those found to be non- responsive. The BEC ultimately
recommended the award of the Tender to the third respondent as the highest point scorer
under the applicable preference point system at an evaluated amount of R91 683
530.05.
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[43] In compliance with the Order of 25 September 2025, the Municipality filed the Rule 53
record. The notice of filing identified the record as comprising the Tender
documentation relating to CE580 and listed, inter alia , the Tender advertisement,
procurement plan, Tender evaluation criteria, technical report, functionality analysis,
Tender evaluation methodology, Tender register, BEC appointments and
recommendation, BAC attendance material, the bids submitted by all tenderers and the
objections and/or appeals.
[44] However, what the Rule 53 record did not clearly identify was the operative final
decision maker. The BEC recommendation was to the BAC and the BAC
recommendation was directed to the accounting officer. The record relied upon by the
applicant did not contain a separate written approval by the City Manager adopting that
recommendation. The appointment letter referred to acceptance by the ‘City Council’.
That uncertainty later became central to the dispute concerning section 62 of the
Systems Act.
[45] The Rule 53 record therefore did two things of particular significance. Firstly, it enabled
the applicant to identify the two functionality criteria upon which its exclusion had
rested and secondly it exposed uncertainty concerning the identity of the functionary
who had ultimately made the award. Those matters informed the applicant’s
supplementary case and later its application to amend the notice of motion.
[46] Subsequent to the dismissal of the applicant’s objection, the Municipality gave notice
on 16 January 2026, in accordance with the order of 25 September 2025, of its intention
to proceed with implementation of the award to the third respondent within 20 days.
On 29 January 2026, the applicant delivered a supplementary founding af fidavit in
respect of Parts A and B and reinstated the interim relief sought in Part A. The relief
sought in Part B was also reformulated considering the Rule 53 record and the
sought in Part B was also reformulated considering the Rule 53 record and the
developments which had occurred since the institution of the proceedings.
[47] Part A came before Mullins AJ on 12 February 2026 but was not determined on its
merits. The Court removed Part A from the roll and directed the parties to approach the
Registrar for an expedited hearing date. A timetable was prescribed for the delivery of
further affidavits and heads of argument and all questions of costs were reserved. The
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significance of the Order is procedural. It did not dispose of Part A or determine any of
the substantive disputes between the parties but preserved Part A for determination on
an expedited basis whilst providing for the completion of the papers. The litigation
therefore continued against the background of the standstill arrangement established by
the Order of 25 September 2025.
[48] On 22 April 2026, the applicant delivered a notice in terms of Rule 28 seeking a further
amendment of the notice of motion. The amendment arose essentially from the
continuing uncertainty concerning the identity of the functionary who had made the
operative award decision. The proposed amendment accordingly sought to cater f or
either possible conclusion concerning section 62. It corrected the date of the impugned
notification from 9 August to 11 August 2025, pleaded alternative relief depending
upon whether a section 62 appeal was legally available, made the proposed remittal to
the municipal bid structures conditional upon there having been no available internal
appeal and in the alternative sought remittal to the appropriate appeal authority should
the Court find that an appeal had been available but had not lawfully been determined.
[49] The uncertainty concerning the decision maker was ultimately resolved only later in the
proceedings. During July 2026 it was confirmed that the City Manager acting as the
Municipality’ s accounting officer had made the award. The Municipality consequently
accepted that no appeal under section 62 existed against that decision and the third
respondent withdrew its opposition to the amendment insofar as it reflected the identity
of the decision maker and the resulting position under section 62.
[50] That clarification altered an important part of the procedural landscape. Prior hereto,
the Tender documentation, the applicant’s correspondence, the Order of 25 September
2025 and the Municipality’ s subsequent handling of the matter had proceeded on the
2025 and the Municipality’ s subsequent handling of the matter had proceeded on the
basis that there existed an ‘objection and/or appeal’. The applicant had in fact lodged
a document expressly styled as a section 62 appeal on 1 September 2025 and the
Mashiya ruling furnished on 22 October 2025 was itself described as determining the
applicant’s ‘objection and/or appeal’.
[51] However, once the City Manager was identified as the original decision maker the
parties were substantially ad idem that the statutory premise for a section 62 appeal was
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absent. The dispute which remained concerned the consequences of the way the
Municipality had represented and dealt with the internal process rather than whether the
applicant was presently required to pursue a section 62 appeal.
[52] A further interlocutory dispute arose from the third respondent’s answering affidavit.
On 22 May 2026 the applicant filed an application in terms of Rule 6(15) seeking to
strike out, alternatively to have disregarded, identified portions of that affidavit. The
impugned material included allegations that the applicant’s bid was non responsive
because of an alleged failure to comply with a single aggregator requir ement,
allegations concerning the relationship between entities relied upon by the applicant in
its bid, assertions of collusive or non-independent bidding, alleged deficiencies relating
to financial statements, lease or debt clearance documentation and ISO certification.
[53] The applicant’s essential objection was that none of those matters formed part of the
reasons for its disqualification recorded in the outcome notification, the BEC report or
Mashiya’s ruling. It contended that they were collateral grounds advanced by the
successful bidder after the event and could not retrospectively be used to sustain the
administrative decision under review. It further contended that their introduc tion
expanded the litigation unnecessarily and risked influencing any reconsideration should
the matter ultimately be remitted.
[54] The third respondent resisted this characterization contending that the impugned
evidence was relevant to the procurement process, to the relief sought by the applicant
and that the applicant had itself placed the compliance of the competing bids in issue.
Whether and for what purpose that evidence may properly be considered is one of the
interlocutory questions which must be determined before the substantive review is
addressed. The central review dispute remained whether the applicant’s
addressed. The central review dispute remained whether the applicant’s
disqualification and the consequential award to the third respondent were lawful based
on the administrative process undertaken.
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General legal framework
[55] The genesis of State procurement is section 217(1) of the Constitution1. When an organ
of state contracts for goods or services, it must do so in accordance with a system that
is fair, equitable, transparent, competitive and cost -effective. The requirements
governing a public tender are not merely internal administrative arra ngements
particularly where they form part of the constitutional and legislative procurement
framework compliance with section 217 is legally required. The award of a tender
constitutes administrative action and is subject to judicial review under the Promotion
of Administrative Justice Act 3 of 2000(hereinafter referred to as ‘PA J A’ ) .
2
[56] In AllPay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive
Officer, South African Social Security Agency and Others ,3 the Constitutional Court
explained the proper approach to irregularities in a procurement process. The Court
must first determine factually whether an irregularity occurred and thereafter evaluate
it legally to determine whether it constitutes a ground of review. Where materiality
arises, compliance is assessed with reference to the purpose served by the requirement
in question. The enquiry into lawfulness is distinct from the consequences which may
follow if invalidity is established.
[57] That approach is important because not every defect in a tender process necessarily
vitiates the resulting administrative action. Equally, an irregularity cannot be dismissed
as inconsequential merely because the same outcome might ultimately have been
reached. Procedural requirements serve, inter alia , the equal treatment of bidders and
the integrity and transparency of the procurement process.
[58] A judicial review is not an appeal4 and a reviewing court does not determine whether it
would itself have evaluated a bid differently or preferred a different outcome. Its
would itself have evaluated a bid differently or preferred a different outcome. Its
function is to determine whether the decision taken was lawful, reasonable and
procedurally fair within the parameters of P AJA.
1 Act 108 of 1996
2 Steenkamp NO v Provincial Tender Board, Eastern cape 2007 (3) SA 121 (CC) at paras 21; 33-35
3 2014 (1) SA 604 (CC) at para 28-29; 40
4 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism 2004 (4) SA 490 (CC) at para 45
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[59] Nonetheless, it is for the organ of state inviting tenders to prescribe the prerequisites
with which bidders must comply. The bidder cannot ordinarily require an organ of state
to disregard a material compulsory tender condition merely because it considers itself
otherwise capable of performing the contract. 5 That principle does not operate
independently of AllPay and the character and purpose of the requirement remain
important as does equality between bidders.
The amendment
[60] The general approach to amendments is permissive. An amendment should ordinarily
be allowed where it facilitates the proper ventilation of the real dispute between the
parties and does not cause prejudice which cannot appropriately be addressed by an
order as to costs or an opportunity to respond. The discretion is exercised judicially,
with the interests of justice and the proper determination of the dispute in mind. The
enquiry is not simply whether the amendment alters the formulation of the case but
whether it introduces an impermissible new cause of action or causes irremediable
prejudice to the opposing party.
6 The fact that an amendment follows information
emerging from the Rule 53 record is also relevant in review proceedings where Rule 53
expressly contemplates supplementation after production of the record.
[61] This Court deals firstly with the applicant’s application to amend its notice of motion.
Although the amendment was of some significance during the earlier stages of the
proceedings, by the time the matter was argued the controversy surrounding it had
substantially narrowed. The amendment was precipitated by information which
emerged from the Rule 53 record and the subsequent clarification of the identity of the
functionary who made the impugned award.
[62] Rule 53 expressly contemplates that an applicant for review may, after receipt of the
record, supplement its founding papers and adjust the relief sought. That entitlement is
record, supplement its founding papers and adjust the relief sought. That entitlement is
5 Dr JS Moroka Municipality and Others v Betram (Pty) Ltd and Another [2013] ZASCA 186; [ 2014] 1 All SA
545 (SCA) at para 10
6 Moolman v Estate Moolman, Trans-Drakensberg Bank Ltd (under judicial management) v Combined
Engineering (Pty) Ltd 1927 CPD 27 at 29
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of particular importance where information material to the formulation of the review
was within the peculiar knowledge of the administrator and only became apparent from
the record.
[63] When the proceedings were instituted, the documents emanating from the Municipality
did not speak with one voice as to the identity of the final decision maker. The
procurement record reflected recommendations passing from the BEC to the BAC and
thereafter to the accounting officer whereas the notification of the award referred to
acceptance by the ‘City Council’. The applicant thereafter pursued what it understood
to be an objection and/or appeal under section 62 of the Systems Act. That process was
entertained and determined without the Municipality taking the point that no such
appeal was competent.
[64] It was only subsequently established that the award had in fact been made by the City
Manager in the exercise of her powers as accounting officer. The applicant’s
amendment sought, inter alia , to accommodate that position and to formulate
alternative relief depending upon the Court’s determination of the issue.
[65] Accordingly, this Court is not persuaded that the amendment impermissibly introduced
a new cause of action. The essential subject of the litigation remained the same being
the lawfulness of the applicant’s disqualification and the consequential award of the
Tender to the third respondent. The amendment refined the relief and the legal
consequences contended for in the light of information which had emerged during the
review proceedings. It did not substitute a different administrative decision for the
decision originally challenged.
[66] Moreover, no cognizable prejudice was demonstrated which could not be cured by
permitting the respondents an opportunity to meet the amended case. They were aware
of the factual and legal issues to which the amendment related and had the opportunity
to address them fully.
to address them fully.
[67] In the circumstances and applying the established approach that amendments should
ordinarily be permitted where they facilitate the proper ventilation of the real dispute
without irremediable prejudice, the amendment ought to be allowed. To refuse it would
Page 18 of 40
elevate the form in which the review was initially framed above the substance of a
dispute with the contours becoming clearer precisely through the Rule 53 process.
[68] The remaining question is costs. The third respondent initially opposed the amendment
but subsequently withdrew that opposition. This Court does not consider the mere fact
of that withdrawal sufficient to justify a punitive costs order. The amendment was
necessitated in substantial measure by the evolving procedural history and the belated
clarification of matters which ideally ought to have been apparent from the
administrative record. The costs occasioned by the amendment are appropriately
determined together with the costs of the review.
The Rule 6(15) application
[69] Rule 6(15) permits a court to strike from an affidavit matter which is scandalous,
vexatious or irrelevant provided that the applicant for striking out will be prejudiced if
the matter remains. Both requirements must ordinarily be established. Matter is not
irrelevant merely because it is disputed or ultimately unpersuasive. Relevance is
determined by its relationship to an issue properly arising on the papers.
7
[70] The applicant also seeks the striking out of portions of the third respondent’s answering
affidavit in terms of Rule 6(15). The application is directed largely at allegations which
seek to identify additional respects in which, according to the third respondent, the
applicant’s bid was non -responsive. These include the allegations concerning the
aggregation arrangement, the independence of bids and the further deficiencies
identified by the third respondent.
[71] It is common cause or at least apparent from the administrative record that these were
not the grounds upon which the Municipality disqualified the applicant. The
administrative record identifies the applicant’s non-compliance with criteria (c) and (h)
as the basis upon which its bid failed the functionality stage. The additional matters
as the basis upon which its bid failed the functionality stage. The additional matters
7 Beinash v Wixley 1997 (3) SA 721 (SCA) at 733A-B
Vaatz v Law Society of Namibia 1991 (3) SA 563 (Nm) at 566J-567B
Swissborough Diamond Mines (Pty) Ltd v Government of the Republic of South Africa 1999 (2) SA 279 (T) at
324F-G
Page 19 of 40
now relied upon by the third respondent did not form part of the reasons for that
decision.
[72] This distinction is significant. The question on review is whether the administrative
decision taken is lawful. A successful tenderer cannot sustain an otherwise reviewable
decision by ex post facto identifying a different basis upon which the unsuccessful
tenderer might also have been disqualified. To permit that would shift the enquiry from
the legality of the decision made by the administrator to a hypothetical enquiry into
whether another lawful basis for the same result might subsequently be constructed.
[73] Whilst the third respondent is entitled to defend the award made in its favour and to
place relevant evidence before the Court in that regard, such entitlement does not
convert it into a ‘quasi decision maker’ nor does it permit reasons which played no part
in the administrative decision to retrospectively become the reasons for that decision.
[74] However, it does not follow that every impugned allegation must necessarily be struck
from the affidavit. Rule 6(15) requires that the matter be scandalous, vexatious or
irrelevant and that its continued presence causes prejudice. There is a distinction
between evidence which provides legitimate context to an issue arising on the papers
and evidence advanced for the impermissible purpose of supplying a new justification
for the administrative decision.
[75] Accordingly, insofar as the impugned allegations are relied upon to establish additional
grounds upon which the third respondent contends that the applicant ought to have been
disqualified, this Court regards them as irrelevant to the determination of the lawfulness
of the decision under review. They cannot be employed to supplement the
Municipality’ s reasons or to rescue the award if the reasons upon which the Municipality
acted do not withstand review.
[76] This conclusion does not require the Court to make findings of dishonesty, collusion or
[76] This conclusion does not require the Court to make findings of dishonesty, collusion or
quasi-criminal conduct against the applicant or associated entities. Those allegations
were not findings of the administrator which produced the impugned decision and it is
neither necessary nor appropriate for the purposes of this review to determine them.
Page 20 of 40
Their determination would enlarge the review into a collateral dispute which is not
necessary to decide the lawfulness of the procurement decision before Court.
[77] To the extent that the identified passages identified in annexure A to the applicant’s
rule 6(15) application serve no purpose other than to advance those additional grounds
of disqualification they are irrelevant to the determination of the review and fall to be
struck out. The costs occasioned by the Rule 6(15) application will likewise be
considered when determining the overall question of costs.
The alleged compromise
[78] A compromise or transactio is an agreement by which parties finally settle disputed or
uncertain rights or obligations. The essential characteristic is consensus to bring the
dispute or an identified part of it to an end. Unless its terms provide otherwise, the
compromise replaces the disputed rights with the rights and obligations created by the
compromise.
8
[79] In Eke v Parsons,9 the Constitutional Court explained that a settlement agreement is the
product of compromise and ‘ give and take’. Once embodied in an order of court, it
changes the status of the parties’ rights and obligations and to the extent of the dispute
settled, brings finality to the lis. The scope of that finality necessarily depends upon
what the parties agreed to settle.10 Whether a compromise was concluded and the extent
of what was compromised is determined objectively from the agreement construed in
its context.
[80] In considering the Municipality’ s contention that the Order of 25 September 2025
constituted a compromise which precluded the applicant from pursuing in material
respects the review now before Court, the enquiry is not merely whether the Order was
taken by agreement but of what the parties agreed to compromise.
8 Road Accident Fund v Ngubane [2007] ZASCA114; 2008(1) SA 432 (SCA) at para 12
9 [2015] ZACC 30; 2016 (3) SA 37 (CC) at para 22-25
9 [2015] ZACC 30; 2016 (3) SA 37 (CC) at para 22-25
10 Road Accident Fund v Taylor [2023] ZASCA 64; 2023 (5) SA 147 (SCA) at paras 36, 40-41
Page 21 of 40
[81] The Order must be read as a whole and in the context in which it was made. At that
stage the applicant complained that it had been informed of its disqualification without
adequate reasons, it had lodged an objection and/or appeal, the Municipality had not
yet implemented the process and review proceedings had already been instituted. The
Order regulated what was to occur while those processes unfolded.
[82] Significantly, the Order did not provide that the review proceedings were withdrawn,
abandoned or finally settled. On the contrary, it expressly contemplated their
continuation. It provided for the Rule 53 record, afforded the applicant an opportunity
to supplement its papers and contemplated the subsequent adjudication of the relief
sought in the proceedings. Those provisions are difficult to reconcile with an intention
finally to extinguish the underlying review dispute.
[83] The Municipality’ s argument in effect treats the agreed procedure for dealing with the
applicant’s objection and the preservation of the position pending that process as a
settlement of the applicant’s substantive review rights. The terms of the Order do not
support that construction. A procedural accommodation intended to regulate the dispute
whilst preserving the parties’ positions is not a compromise of the dispute itself.
[84] The further difficulty is that the waiver of or compromise concerning a right to
challenge the legality of public procurement is not lightly inferred. The applicant had
already approached the Court to vindicate rights arising from a procurement process
governed by section 217 of the Constitution. If it intended to abandon that challenge in
exchange for the internal process embodied in the Order, one would expect that
consequence to emerge with reasonable clarity from the agreement which it does not
and the contrary is apparent. The continued provision for the Rule 53 record,
and the contrary is apparent. The continued provision for the Rule 53 record,
supplementation of the review papers and further adjudication demonstrates that the
dispute was being kept alive, not being terminated. What was compromised was the
immediate procedural position between the parties, implementation was held in
abeyance while the objection and/or appeal was dealt with and the review was permitted
to proceed in an orderly fashion.
[85] The Municipality relies upon Eke, Taylor and Ngubane for the established proposition
that a compromise extinguishes the disputed rights and obligations which are its subject
Page 22 of 40
and substitutes new rights and obligations in their place. The proposition is not in
dispute. However, the anterior question is what was compromised. A compromise can
have no wider effect than the dispute which the parties intended it to settle.
[86] On a proper construction of the Order, what was compromised was the immediate
procedural dispute concerning implementation of the Tender whilst the applicant’s
objection was being determined. The Order regulated the interim position, afforded the
Municipality an opportunity to determine the objection, and prescribed what would
occur thereafter. It did not purport to determine the lawfulness of the original
procurement decision or to extinguish the review proceedings already instituted.
[87] This is reinforced by the subsequent conduct contemplated by the Order itself. The
applicant was entitled to reinstate its Part A relief upon notification that the Municipality
intended to implement the award and the Rule 53 process, supplementation of the
papers and ultimate adjudication of Part B remained contemplated. The Municipality’ s
own heads of argument record that the applicant subsequently reinstated Part A and
supplemented its founding papers in respect of both Parts A and B.
[88] Nonetheless, there is a narrower point in the Municipality’ s submission which must be
distinguished. To the extent that the applicant’s original complaint was simply that
adequate reasons had not been furnished, the Order provided a mechanism by which
that complaint was to be addressed. The objection was to be enter tained and reasons
were to be furnished thereafter. The applicant cannot ignore that subsequent
development when advancing the review. However, that does not mean that the reasons
ultimately furnished or the administrative decision which they purported to explain are
insulated from scrutiny on review.
[89] Accordingly, this Court rejects the contention that the Order of 25 September 2025
[89] Accordingly, this Court rejects the contention that the Order of 25 September 2025
constituted a compromise which precluded the present review. Its effect was procedural
and interim and it did not compromise or extinguish the applicant’s substantive right to
challenge the lawfulness of the procurement decision.
Page 23 of 40
Section 62 and the identity of the decision maker
[90] Section 62 of the Systems Act provides an internal appeal against a decision taken by a
political structure, political office bearer, councillor or staff member pursuant to a
power or duty delegated or sub-delegated by a delegating authority.
11 The existence of
the remedy therefore depends upon the source of the decision maker’s authority. Where
the decision is made by the Municipal Manager in the exercise of an original statutory
power as accounting officer rather than pursuant to delegated aut hority, the
jurisdictional basis for a section 62 appeal is absent.
[91] The applicant initially proceeded on the footing that a section 62 appeal was available
and that understanding was not unreasonable. The Tender conditions and the
notification of 11 August 2025 contemplated internal remedies, the applicant lodged
what it expressly described as a section 62 appeal on 1 September 2025, the agreed
Order of 25 September required the Municipality to determine all timeous ‘objections
and appeal’ and Mashiya’s subsequent ruling was itself expressed to determine the
applicant’s ‘objection and/or appeal’.
[92] The Rule 53 record did not initially resolve the matter. It reflected a recommendation
by the BEC to the BAC and a recommendation by the BAC dated 14 July 2025 addressed
to the accounting officer. However, the appointment letter stated that the ‘City Council’
had accepted the Tender yet no Council resolution appeared in the record.
[93] The position was ultimately clarified in July 2026. The Municipality confirmed that the
City Manager acting as accounting officer had made the award. The third respondent
thereafter withdrew its opposition to the amendment and accepted that the City
Manager exercised an original procurement power rather than a delegated or sub-
delegated power. By the time the matter was argued, there was accordingly no longer
any material dispute that an appeal under section 62 was not available.
any material dispute that an appeal under section 62 was not available.
[94] That conclusion is correct as the statutory jurisdictional requirement for an appeal under
section 62 was absent. Mashiya’s ruling could therefore not constitute a determination
11 Maximum Profit Recovery (Pty) Ltd v Inxuba Yethemba Local Municipality [2021] ZAECGHC 11 at para 23
Page 24 of 40
of a statutory section 62 appeal merely because it was repeatedly described as an
‘objection and/or appeal.’ It can only be properly construed as the outcome of the
separate SCM objection process.
[95] Accordingly, the applicant was not required to exhaust a section 62 remedy before
approaching this Court. The alternative relief formulated on the assumption that such
an appeal existed has since become academic. However, the history explains the
applicant’s procedural course and the amendment which ultimately became necessary.
The substantive review
[96] Section 33(2) of the Constitution affords a person whose rights have been adversely
affected by administrative action a right to written reasons and section 5 of PA J A gives
effect to that right. Section 5(2) provides for the furnishing of adequate written reasons
upon request. Section 5(3) provides that where an administrator fails to furnish adequate
reasons for administrative action it must, in any proceedings for judicial review and in
the absence of proof to the contrary, be presumed that the administrative action was
taken without good reason.
[97] Adequacy is regarded as contextual and in Koyabe and Others v Minister for Home
Affairs and Others,
12 the Constitutional Court explained that reasons need not traverse
every factual consideration or explain the weight attached to every item of evidence.
However, the reasons must be sufficiently informative to explain why the decision was
taken and enable the affected person to meaningfully challenge it. The nature of the
decision, its complexity and the circumstances in which it was made are relevant to that
enquiry.
[98] In the Municipal Manager: City of Johannesburg Metropolitan Municipality v San
Ridge Heights Rental Property (Pty) Ltd,
13 the Supreme Court of Appeal considered
the operation of section 5(3) of PA J A where adequate reasons have not been furnished.
12 2010 (4) SA 327 (CC) ) at para 63-64
13 [2023] ZASCA 109 at paras 16-21, 23-24
Page 25 of 40
The presumption is rebuttable with the enquiry being whether the administrator has
established that the administrative action was nonetheless taken for good reason.
[99] A related but distinct principle concerns reasons advanced after the event. In National
Lotteries Board v South African Education and Environment Project,
14 the Supreme
Court of Appeal held that it is ordinarily impermissible for a decision maker, who was
required to give reasons to meet a review, to advance new reasons for the first time in
an answering affidavit. This does not render all subsequent explanat ory evidence
inadmissible and a distinction must be drawn between evidence which explains or
elucidates the reasoning that informed the decision and a new rationale devised
subsequently to sustain it.
15 The former may assist a court in understanding the
administrative record whilst the latter cannot retrospectively transform the basis upon
which the administrative power was exercised.
[100] Administrative action may also be susceptible to review where a material mistake of
fact informed the exercise of the power or where relevant considerations were not
considered. A review based upon mistake of fact does not permit the Court simply to
prefer one assessment of disputed evidence to another. The error relied upon must
concern a fact which is objectively ascertainable and sufficiently material to the
exercise of the administrative power.
16
[101] The central issue of the applicant’s case is that it was excluded at the compulsory
functionality stage on a factual basis which cannot be reconciled with the Tender it
submitted. The Municipality answers that this formulation misconceives the decision.
It accepts that documents dealing with customer registration, implementation and a
Gantt chart were physically contained in the applicant’s bid but contended that the
evaluators considered them and found their content substantively inadequate.
evaluators considered them and found their content substantively inadequate.
[102] It is critical to consider the distinction at this stage. If the decision was that the required
documents had not been submitted, the common cause presence of those documents in
14 2012 (4) SA 504 (SCA) ) at para 27-28
15 National Energy Regulator of South Africa and Another v PG Group (Pty) Ltd and Others [2019] ZACC 28;
2020 (1) SA 450 (CC) at para 39
16 Dumani v Nair and Another. 2013 (2) SA 274 (SCA) ) at paras 29-32
Page 26 of 40
the bid raises an obvious factual difficulty. However, if the decision was that the
documents were considered but failed substantively to satisfy criteria (c) and (h), the
dispute has an evaluative character and the Court must exercise caution not to substitute
its assessment for that of the municipal evaluators.
[103] The starting point must be the administrative record. The BEC report records a ‘No’
against the two criteria without any explanation. It does not contemporaneously
disclose whether the evaluators regarded the required material as absent or whether they
identified and considered the material submitted but found it to be inadequate. That
omission is important because it is the original evaluation which must be reviewed not
an evaluation reconstructed during the litigation.
[104] The first articulated explanation emerges from Mashiya’s ruling. In relation to the
customer registration requirement and the comprehensive business and project
implementation plan including the Gantt chart, her ruling records that the applicant ‘did
not, as part of its bid, provide these’. The applicant understandably relies heavily upon
that formulation because its case is that the factual premise is demonstrably incorrect
because the relevant material formed part of its Tender. The Municipality now accepts
the latter fact
[105] The third respondent submits that this does not establish that the original evaluators
made the same factual error. Mashiya did not participate in the original BEC
functionality assessment and delivered her ruling months later in the SCM objection
process. It contends that an inaccuracy in her description of the reason cannot merely
establish the factual premise upon which the BEC acted.
[106] There is a distinction between Mashiya’s later ruling and the original BEC evaluation.
Whilst it would be incorrect simply to attribute every word of her ruling retrospectively
Whilst it would be incorrect simply to attribute every word of her ruling retrospectively
to the BEC, that does not resolve the difficulty confronting the Municipality. The BEC
itself gave no reasons beyond recording ‘ No’. Mashiya’s ruling was subsequently
furnished pursuant to a Court Order requiring the Municipality to determine the
applicant’s objection and provide a written decision with reasons and the explanation
which emerged from that process was one of non-provision. The Municipality’ s present
explanation that the material was indeed before the evaluators but that it was considered
Page 27 of 40
substantively inadequate is not recorded in the contemporaneous decision- making
material identified to this Court.
[107] The issue is therefore not whether the applicant can prove that every member of the
BEC subjectively believed that the documents were physically absent. The
fundamental question is whether the Municipality has established from the
administrative record and reasons properly attributable to the decision maker that the
reason now advanced of the material being considered and found to be substantively
inadequate, was in fact the basis upon which the applicant wa s disqualified. This
question cannot be answered by allowing reasons first formulated during litigation to
retrospectively supply what is absent from the administrative record.
[108] The notification of 11 August 2025 did not identify criteria (c) and (h). It informed the
applicant only that it had failed to attain the functionality threshold. The applicant
immediately requested reasons and the evaluation record and followed up that request.
Moreover, it had to formulate its internal challenge without knowing which
functionality requirements had caused its exclusion. Its founding affidavit describes the
resulting appeal as having been pursued ‘in the dark’.
[109] That information was plainly insufficient to enable the applicant to understand why its
bid had failed. In a procurement process containing multiple compulsory functionality
criteria, simply telling a bidder that it failed ‘functionality’ does not explain the path by
which the decision was reached. The subsequent BEC record identified the two
unsuccessful criteria but again provided no reasoning for the negative findings.
[110] In this Court’s view, the applicant was not furnished with adequate reasons for the
original administrative decision when it requested them. Section 5(3) of PA J A is
consequently engaged. The question then becomes whether the Municipality has placed
consequently engaged. The question then becomes whether the Municipality has placed
sufficient evidence before this Court to rebut the statutory presumption that the decision
was taken without good reason.
[111] The Municipality essentially relies upon its answering evidence to explain that the
relevant documents were not overlooked. Its case is that they were considered and
found wanting in substance. There is nothing inherently impermissible in evidence
Page 28 of 40
which elucidates a terse administrative record. A Rule 53 review would become
artificial if an administrator were never permitted to explain technical shorthand or
identify material considered by an evaluation committee.
[112] However, there is a boundary between explanation and reconstruction. The applicant
correctly points out that Mr. Peter’s evidence, although competent insofar as it concerns
matters within his own knowledge as a participant in the evaluation process, cannot
retrospectively supply reasons which the administrative record does not demonstrate
to have informed the decision. The question is therefore not whether his evidence was
given after the event but whether it elucidates the decision taken or supplies a materially
different reason for it.
[113] The position is complicated by Mashiya’s subsequent ruling. That ruling cannot simply
be disregarded. It was the Municipality’ s formal determination of the applicant’s
objection pursuant to the agreed process and must necessarily have been based upon
material placed before the decision maker. In relation to criteria (c) and (h), the reason
recorded was that the applicant ‘did not, as part of its bid, provide these.’ That statement
was unequivocal in its terms and on its ordinary meaning conveyed that the required
material had not been provided as part of the bid. However, what is not apparent from
the record is the material upon which that conclusion was reached or whether Mashiya
understood the deficiency to lie in the physical absence of the relevant documents or in
their failure substantively to provide what the criteria required.
[114] That distinction is particularly significant because it is now common cause that material
directed at both requirements physically formed part of the applicant’s bid. The
Municipality’ s present case is that the material was considered by the evaluators but
was substantively inadequate. That explanation may ultimately be capable of
was substantively inadequate. That explanation may ultimately be capable of
reconciliation with Mashiya’s ruling if her reference to the applicant having failed to
‘provide’ the requirements was intended substantively rather than literally. The
difficulty is that the contemporaneous BEC record does not reveal that reasoning and
Mashiya’s ruling does not explain it.
[115] Accordingly, the Court must guard against both extremes. It cannot infer merely from
Mashiya’s choice of words that the BEC necessarily proceeded upon the mistaken
Page 29 of 40
premise that the documents were physically absent nor can it assume without support
in the administrative record that her ruling embodied the substantive assessment now
advanced by the Municipality. The enquiry remains whether the record read together
with permissible explanatory evidence establishes the actual basis upon which the
applicant failed criteria (c) and (h).
[116] It is common cause that material directed at customer registration, an implementation
plan and a Gantt chart formed part of the applicant’s Tender. That fact does not establish
that the applicant necessarily complied with criteria (c) and (h). The third respondent
submission is correct that the Tender did not merely require documents carrying labels
but it required substantive information demonstrating compliance with the prescribed
requirements but that observation cannot cure the anterior difficulty.
[117] If the Municipality considered the material inadequate then the legality of that
evaluative conclusion must be capable of being assessed against the record of the
decision. There must be some discernible basis upon which the Court can determine
what deficiency was identified, whether it related rationally to the Tender requirement
and whether the compulsory criterion was applied consistently.
[118] The Court cannot undertake that assessment for the first time neither can it decide that
in reading the applicant’s documents now a possible deficiency might be identified and
that deficiency must have been the basis upon which the BEC recorded ‘No’. This
approach would substitute judicial reconstruction for administrative reasoning which is
impermissible.
[119] In those circumstances, the common cause presence of the documents is not decisive
because it does not prove substantive compliance but rather because it exposes the
disjunction between the reason subsequently furnished through the objection process
and the contemporaneous administrative record. Coupled with the absence of
and the contemporaneous administrative record. Coupled with the absence of
contemporaneous reasons demonstrating the alternative substantive assessment now
relied upon, it leaves the Municipality unable to establish that the decision rested upon
the reason presently advanced.
Page 30 of 40
[120] Therefore this Court concludes that, considered cumulatively, the applicant has
established a reviewable irregularity in the manner that its compliance with criteria (c)
and (h) was determined. The decision is affected by the failure to adequately account
for relevant material which was before the evaluators and by the absence of a rationally
ascertainable connection on the administrative record between that material and the
negative findings recorded against the applicant. Accordingly, this Court is of the view
that the Municipality has also failed to rebut the presumption arising under section 5(3)
o f PA J A.
[121] Fairness in public procurement requires bidders to compete on an equal footing. A
bidder cannot ordinarily be afforded an opportunity after closure to supplement or
improve its tender to cure a material deficiency which other bidders were required to
address when submitting their bids. That is not necessarily the same as seeking
clarification of information already contained in a bid particularly where the tender
conditions themselves permit clarification. The enquiry is whether what is sought
merely explains existing material or would permit the bidder to alter, supplement or
improve its tender.
[122] The applicant advances a further ground based upon the Municipality’ s failure to seek
clarification under clause 14 of the Tender conditions. In view of the conclusion
reached supra, it is unnecessary to determine whether that failure constituted an
independent ground of review. Nonetheless, the issue warrants consideration because
upon reconsideration, the Municipality may again be required to determine whether any
identified deficiency is capable of clarification under clause 14 without permitting
supplementation of the applicant’s bid.
[123] The applicant does not contend that clause 14 after Tender closure entitled it to repair
its bid by introducing substantive material which had not been submitted but adopts a
its bid by introducing substantive material which had not been submitted but adopts a
narrower approach. The applicant’s contention is that if the evaluators had the relevant
documents but were uncertain whether or where the compulsory requirements had been
addressed, then in those circumstances, clarification could and should have been
sought. The Municipality’ s response is that no clarification was required because the
material was considered and found substantively deficient. That answer again depends
upon a factual premise which the administrative record does not adequately establish.
Page 31 of 40
[124] There is an important distinction between clarification and supplementation.
Procurement fairness ordinarily prohibits a bidder from being afforded a post -closing
opportunity to improve a materially deficient bid. It does not follow that an evaluator
may never seek clarification of information already contained in a tender particularly
where the tender conditions themselves contemplate such a process.
[125] Nonetheless, this Court will not go so far as to hold that clause 14 imposed an inflexible
duty upon the Municipality to seek clarification whenever an evaluator considered a
document inadequate. Whether clarification is permissible or appropriate depends upon
the nature of the perceived deficiency. If what is required would introduce new
substantive material then in those circumstances clarification would cross the line into
supplementation. If the issue is merely the location, meaning or relationship of material
already submitted to the criterion under consideration, the position may be different.
[126] In assessing whether clarification is permissible or appropriate in any reconsideration
is accordingly a matter for the Municipality having regard to the nature of any
deficiency identified and the terms of clause 14. The review succeeds not because this
Court finds that the applicant complied with criteria (c) and (h) or ought to have been
declared responsive but because the administrative process by which it was declared
non-responsive cannot be sustained on the record.
The challenge to the award of the third respondent
[127] The applicant advances an independent challenge to the award made to the third
respondent. It contended that irrespective of the lawfulness of its own exclusion, the
third respondent was itself non- responsive because its Tender failed to comply with
compulsory requirements relating to real -time vending, the generation and digital
delivery of tokens and charges to customers. The third respondent disputes that its
delivery of tokens and charges to customers. The third respondent disputes that its
Tender was non-compliant.
[128] Much of the dispute concerns WireIT. The applicant relied upon material describing
WireIT as a beneficiary -payment or EFT facility and contended that it did not itself
constitute the real-time vending channel contemplated by the Tender. It also relied upon
Page 32 of 40
references to the delivery of tokens by SMS or email and to charges associated with
certain WireIT transactions.
[129] However, that argument does not establish that the third respondent’s Tender failed a
compulsory requirement. The third respondent’s case is that WireIT was an optional
customer facing payment facility and not the exclusive means by which its vending
solution operated. Its Tender provided for other vending channels including banking
integrations, ATMs, retail outlets and cash vending facilities. The applicant has not
established that the optional WireIT facility was itself required to satisfy every
compulsory requirement applicable to the central vending solution.
[130] The same applies to token generation and delivery. The third respondent’s evidence is
that once a transaction is authenticated the encrypted token is generated centrally and
in real time ordinarily within approximately 15 seconds. The fact that a token may
thereafter be transmitted by SMS or email and displayed digitally on the customer’s
device does not establish non- compliance with the requirement that the token be
digitally displayed. Furthermore, the applicant has not produced evidence
demonstrating that the central token generation process could not operate in the manner
described by the third respondent.
[131] The applicant’s reliance upon references in the WireIT material to possible fees or
charges fares no better. The third respondent’s Tender specific case is that neither it nor
its agents would levy registration, subscription or token purchase charges upon
customers under the Tender. The generic WireIT material does not establish that charges
prohibited by the Tender formed part of the third respondent’s tendered service.
[132] The prescribed client declarations relied upon by the third respondent did not relieve
the Municipality of its obligation properly to evaluate compliance. However, these
the Municipality of its obligation properly to evaluate compliance. However, these
formed part of the material before the evaluators. The applicant does not contend that
they were forged or knowingly false and did not demonstrate that they were
contradicted by the third r espondent’s tender specific offering in a manner which
rendered the finding of responsiveness irrational.
Page 33 of 40
[133] The applicant has accordingly not established its independent review challenge to the
third respondent’s responsiveness. Its criticisms identify disputed aspects of the third
respondent’s technical solution but do not establish that the third respondent fa iled a
compulsory Tender requirement.
[134] Regardless, this conclusion does not preserve the award to the third respondent which
followed upon the applicant’s exclusion from further evaluation. Having found that
exclusion unlawful the Court must separately determine the consequence of that
invalidity and the appropriate remedy.
Remedy
[135] If administrative action is found to be unlawful, section 8 of PA J A and section 172(1)(b)
of the Constitution require the Court to fashion relief which is just and equitable. As
was enunciated in AllPay, the enquiry into remedy follows and must not be conflated
with the antecedent enquiry into lawfulness. Ordinarily, where a procurement decision
is set aside the matter is remitted to the administrator for reconsideration with
substitution remaining exceptional.
17
[136] The setting aside of the applicant’s exclusion does not simply establish that it was
entitled to the award. The Court must establish a remedy which is just and equitable
having regard to the consequences of the unlawful exclusion and the proper role of the
municipal decision maker.
[137] The award to the third respondent cannot appropriately be preserved in the
circumstances of this case. The applicant was excluded before its Tender proceeded to
comparative evaluation. Its tendered price was approximately R78.69 million whilst
that of the third respondent was approximately R91.68 million. That difference does
not establish that the applicant ought to have received the award but it does demonstrate
why the Court cannot conclude that its unlawful exclusion could have had no bearing
upon the ultimate outcome.
upon the ultimate outcome.
17 Allpay supra; Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and
Another 2015 (5) SA 245 (CC) at paras 42–47.
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[138] The approach in Millennium Waste Management (Pty) Ltd v Chairperson, Tender
Board: Limpopo Province 18 is instructive. Where a tenderer has been unlawfully
excluded, setting aside the consequential award and remitting the matter may be
necessary to permit the procurement process to be completed lawfully. Whilst the fact
that the third respondent has not be en shown to have committed a reviewable
irregularity is relevant to remedy it does not render the consequential award immune
from review. The difficulty lies not in wrongdoing by the third respondent but in the
fact that the award emerged from a competitiv e process from which the applicant had
been unlawfully excluded.
[139] The applicant’s disqualification and the consequential award to the third respondent
must accordingly be set aside. This conclusion is not a finding that the applicant’s
Tender was responsive or that it ought to have been awarded the Tender. Those remain
matters for determination through the lawful procurement process.
[140] Remittal is therefore appropriate. The procurement process must be restored to the stage
at which the applicant was unlawfully excluded and remitted to the BEC for
reconsideration of the applicant’s Tender. Thereafter, the process must proceed through
the appropriate municipal structures in accordance with the Tender and the applicable
procurement framework.
Interim preservation of services
[141] A further question arises from the need to ensure continuity of electricity vending and
municipal revenue collection while the reconsideration takes place. The applicant seeks
continuation of the existing arrangement until a lawful award has been made and, if
another tenderer succeeds, for an orderly transition thereafter. The third respondent
opposes any relief which would confer upon the applicant an indefinite entitlement to
continue rendering the service.
[142] Success in the review neither revives nor extends the applicant’s expired contractual
[142] Success in the review neither revives nor extends the applicant’s expired contractual
rights nor does it entitle the Court effectively to award the Tender to it pending
18 2008 (2) SA 481 (SCA) paras17-23
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reconsideration. The interim position must therefore be regulated only to the extent
necessary to avoid disruption while giving effect to the review remedy.
[143] The Tender has not yet been implemented and the applicant presently continues to
provide the vending service under the arrangements maintained during the litigation. In
those circumstances, requiring an immediate change of service provider under an award
which is be ing set aside only for the procurement process to be reconsidered would
serve no useful purpose and may itself cause disruption.
[144] The preservation relief sought by the applicant is not properly characterized as
substitution. It does not seek an award of the Tender . Its purpose is to maintain the
existing service whilst the Municipality undertakes the reconsideration required by this
Order. That distinction is material even though the relief must remain strictly limited in
duration and purpose.
[145] Accordingly, a limited preservation arrangement is just and equitable. The existing
vending arrangement should remain in place pending completion of the
reconsideration. If another tenderer is lawfully selected, the applicant should thereafter
be afforded a period of 30 days to facilitate an orderly transition. This does not revive
the applicant’s expired contractual rights, confer upon it an entitlement to the Tender
or predetermine the outcome of the reconsideration.
Costs
[146] Costs require separate consideration. The issues are the costs of the main review, the
applicant’s unsuccessful independent challenge to the third respondent’s
responsiveness, the Rule 6(15) application, the amendment, the costs reserved on 25
September 2025 and 12 February 2026, the employment of two counsel and the
appropriate scale.
[147] The applicant has achieved substantial success in the main review. Its disqualification
and the consequential award are to be set aside and the matter remitted for
and the consequential award are to be set aside and the matter remitted for
reconsideration. The litigation followed upon the Municipality’ s failure to adequately
communicate the basis and status of its decision-making process to the applicant despite
Page 36 of 40
requests for clarity. The Municipality should accordingly bear the applicant’s costs of
the main review.
[148] The position of the third respondent is distinguishable. It was entitled to protect the
award made in its favour and successfully resisted the applicant’s independent
challenge to the responsiveness of its Tender . It did not cause the Municipality’ s
reviewable decision. In those circumstances and subject to the discrete interlocutory
matters dealt with infra, there should be no order as to costs between the applicant and
the third respondent in the main proceedings.
[149] The Rule 6(15) application stands on a different footing. The third respondent went
beyond defending the Municipality’ s stated grounds of disqualification and introduced
additional allegations including allegations bearing upon collusion or non-independent
bidding which had not formed part of the Municipality’ s reasons for disqualification.
The applicant succeeded in having the collateral material struck out. The third
respondent should accordingly bear the costs of the Rule 6(15) application.
[150] The Court is not persuaded that a separate costs order against the third respondent is
warranted in respect of the amendment. Its initial opposition arose from uncertainty on
the Rule 53 record as to the identity of the final decision maker and was withdrawn
once that issue was clarified. The costs of the amendment should therefore form part of
the costs payable by the Municipality whose record and subsequent clarification
occasioned the uncertainty.
[151] The costs reserved on 25 September 2025 should be borne by the Municipality. The
hearing did not proceed because the Municipality disclosed that its internal objection
process had not been completed. The applicant had repeatedly sought clarity concerning
that process and the implementation of the Tender. In circumstances where the absence
of effective communication was attributable to the Municipality , the applicant’s
of effective communication was attributable to the Municipality , the applicant’s
approach to Court cannot fairly be characterized as unnecessary.
[152] The same applies to the costs reserved on 12 February 2026. By then the applicant had
reinstated Part A following notification that the Municipality intended to implement the
award. Against the background of the unresolved review and the preservation
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arrangement, its return to Court was not unreasonable. Those costs should likewise be
borne by the Municipality.
[153] The Court is satisfied that the employment of two counsel by the applicant was
warranted by the volume of the procurement record, the technical Tender requirements,
the interlocutory proceedings and the overlapping issues arising under PA J A , the
Systems Act and municipal procurement legislation. Where two counsel were in fact
employed, their costs should be allowed.
[154] In the circumstances, the following order is issued:
1. The applicant’s application to amend its notice of motion is granted.
2. The applicant’s application in terms of Rule 6(15) is granted, and the matter
identified in Schedule A to the applicant’s notice of application is struck out.
3. It is declared that the applicant had no effective internal remedy in terms of
section 62 of the Local Government: Municipal Systems Act 32 of 2000 in
respect of the decision to disqualify its bid under Tender CE580.
4. The decision to disqualify the applicant’s bid under Tender CE580 is reviewed
and set aside.
5. The consequential award of Tender CE580 to the third respondent and the
contract concluded pursuant thereto are reviewed and set aside.
6. The procurement process under Tender CE580 is remitted to the first and second
respondents for reconsideration from the stage at which the applicant’s Tender
was disqualified through the Municipality’ s lawful procurement structures and
in accordance with the Tender conditions, the applicable procurement
framework and this judgment.
Page 38 of 40
7. Pending completion of the reconsideration contemplated in paragraph 6:
7.1 the existing electricity vending and municipal revenue collection
arrangement with the applicant shall continue solely to ensure continuity of
municipal services;
7.2 such continuation shall not confer upon the applicant any contractual
entitlement beyond the terms of this order, nor any entitlement to the award
of Tender CE580.
8. The Municipality shall complete the reconsideration contemplated in paragraph
6 within 60 days of the date of this order.
9. If, pursuant to that reconsideration, Tender CE580 is lawfully awarded to a
bidder other than the applicant, the Municipality shall implement that award
within 30 days thereof and in a manner designed to avoid interruption to
electricity vending and municipal revenue collection.
10. The first and second respondents shall pay the applicant’s costs of the review,
jointly and severally, the one paying the other to be absolved, such costs to
include the costs of two counsel where so employed, including:
10.1 the costs reserved on 25 September 2025;
10.2 the costs reserved on 12 February 2026;
10.3 the costs of the amendment application.
11. The third respondent shall pay the applicant’s costs of the Rule 6(15)
application.
12. Save as provided in paragraph 11, there shall be no order as to costs between
the applicant and the third respondent.
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S A COLLETT
JUDGE OF THE HIGH COURT
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APPEARANCES:
For the applicant : Adv. U.K. Naidoo
Instructed by : Smit Sewgoolm Inc.
c/o Stirk Yazbek
18 Vincent Road
EAST LONDON
For the first & second respondent : Adv. A Bodlani SC
Instructed by : Jolwana and Mgidlana Inc.
9B Derby Road
Berea
EAST LONDON
For the third respondent : Adv. N.C. De Jager SC with Adv. D.M. Lubbe
Instructed by : Kirk Kotze Attorneys
c/o Smith Tabata Attorneys
12 St Helena Road
Beacon Bay
EAST LONDON
Date heard : 30 July 2026
Date judgment delivered : 3 September 2026