Beach Clean Services South Africa CC v City of Cape Town (18617/13) [2014] ZAWCHC 41 (25 March 2014)

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[2014] ZAWCHC 41
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Beach Clean Services South Africa CC v City of Cape Town (18617/13) [2014] ZAWCHC 41 (25 March 2014)

IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE, CAPE TOWN
DIVISION)
Case
No:
18617/13
DATE:
25 MARCH 2014
In
the matter between:
BEACH
CLEAN SERVICES SOUTH AFRICA
CC
..........................................
Applicant
And
THE
CITY OF CAPE
TOWN
.............................................................................
Respondent
JUDGMENT: DELIVERED ON 25 MARCH
2014
PILLAY AJ:
INTRODUCTION
1.
This
matter concerns the respondent’s (“the City’s”)
tender for beach cleaning services at certain Cape
beaches for the
period June 2012 to 30 June 2015 (“the tender”).
2.
During
July 2012 the City invited tenders for the provision of beach
cleaning services over a period of three years at sixteen beaches
in
the Western Cape.  There are four components to the tender:
2.1.
Deep
sand cleaning which entails cleaning of beach sand to a certain depth
using a mechanical raking and screening machine.
2.2.
Kelp
removal which includes the removal of kelp from identified beaches by
hand or by mechanical means.
2.3.
Edge
cleaning which entails the manual cleaning of an area of sand on the
edge of the beach adjacent to grass, rocks and pathways.
2.4.
Waste
containment and removal which pertains to foreign particles that are
mechanically extracted from the sand and are deposited
in a large
waste skip, delivered to the beach in question as and when cleaning
is done; the skip is then removed and the waste
discarded.
3.
The
applicant and its joint venture partner, Wasteman Holdings (Pty) Ltd
(jointly referred to as “the Joint Venture”)
as well as
eight other entities submitted a bid pursuant to the tender.
4.
In
its adjudication of the bid in November 2012:
4.1.
The
City rejected the Joint Venture’s bid as being non responsive;
and
4.2.
Khazimla
Cleaning and Gardening Services CC (“Khazimla”), the last
remaining bidder, was awarded the tender.
5.
On 19
November 2012, the City addressed correspondence to the Joint Venture
advising that its response to the tender had been unsuccessful
and
that the tender had been awarded to Khazimla until 30 June 2015.
6.
Pursuant
thereto, on 20 November 2012 the Joint Venture lodged an appeal to
the City Manager.  The appeal was dismissed on
12 December 2012.
7.
The
City found the Joint Venture’s bid to be non responsive for two
reasons:
7.1.
It
did not tender on all items (more specifically it failed to specify a
price for the waste containment and removal service at
six smaller
beaches).
7.2.
It
qualified its price escalation figure (by quoting a 6.8% annual
escalation, across the board).
8.
On 20
December 2012 the Applicant instituted proceedings in this Court
under case number 24190/12 (“the prior litigation”).

The prior litigation ultimately sought to review and set aside
certain decisions of the City relating to the tender.  The
prior
litigation was founded on two main grounds:
8.1.
First,
that the City’s decision to reject the Joint Venture’s
own tender was invalid.
8.2.
Second,
that the tender submitted by the successful tenderer was irregular as
it had unlawfully utilised some of the Joint Venture’s
own
confidential prices in pricing its tender.
9.
In
the prior litigation, this Court ultimately ordered:
“
(1)
Second Respondent’s [Khazimla’s] tender for the provision
of beach cleaning services
and the City’s award thereof to it,
are reviewed and set aside.
(2)
The
City’s rejection of the Applicant’s tender for the
provision of beach cleaning services, is reviewed and set aside.
(3)
Applicant
is granted the opportunity to furnish further information to the City
within a period of two weeks from the date of this
judgment with
regard to the City’s reasons, as set forth in this application,
for declaring the Applicant’s tender
non responsive.
(4)
The
City is ordered to proceed, after receipt of such information, with
the consideration and evaluation of Applicant’s tender.
(5)
The
City and the Second Respondent are ordered to pay applicant’s
costs, jointly and severally, including the cost of two
counsel.”
10.
Pursuant
to the order of this Court in the prior litigation, the Joint Venture
furnished the City with supplementary information
on 16 July 2013.
11.
On
receipt of the supplementary information, on 18 October 2013 the City
declared the Joint Venture’s bid to be non responsive
and
cancelled the tender because it concluded that no further acceptable
bids had been received.  It is this decision that
has given rise
to the current litigation.
THE
RELIEF SOUGHT AND THE DISPUTE BETWEEN THE PARTIES
12.
It is
against the aforesaid backdrop that the Applicant (on whose behalf Mr
SP Rosenberg SC and Mr NC De Jager appeared) now seeks
an order:
12.1.
Reviewing
and setting aside the decision of the City to declare as unresponsive
its bid for the provision of beach cleaning services
(“the
tender”).
12.2.
Reviewing
and setting aside the decision of the City to cancel the tender.
12.3.
Awarding
the tender to the Joint Venture and directing the City within two
weeks of the date of judgment to conclude a contract
with the Joint
Venture either on the same terms and conditions contained in the
tender, or on such terms as the parties may agree.
13.
The
Applicant’s ultimate complaint is that the City failed to take
into consideration the supplementary information that it
furnished to
the City, pursuant to the Order granted by this Court in the prior
litigation.
14.
The
City (on whose behalf Mr RGL Stelzner SC appeared), on the other hand
contends that this Court’s order in the prior litigation

allowed the Joint Venture “to clarify aspects, and not amend
its bid because if it were permitted to amend its bid, that
would be
patently unfair to the other tenderers who were not afforded such an
opportunity”.  The City accepts that it
was required to
re-evaluate the bid in light of the clarification provided by the
Joint Venture.
NON JOINDER
15.
The
City has taken issue with the non joinder of Wasteman, which as
stated, is the other party to the Joint Venture that submitted
a
tender to the City.  I am of the view that there is no merit to
the challenge.  Indeed, a letter from Wasteman has
been attached
to the Applicant’s replying affidavit which states as follows:
“
Wasteman
Holdings (Pty) Ltd is aware of the application launched by Beach
Clean Services South African CC under case number 18617/2013.
Wasteman has received a copy of the
founding and answering papers delivered therein and stands ready and
able to deliver the services
forming the subject of the beach
cleaning tender, should the tender be awarded to the joint venture
between Beach Clean Services
South Africa CC and Wasteman.”
16.
In
any event, in
Sanyathi
Civil Engineering and Construction (Pty) Ltd v Ethekwini
Municipality; Group Five Construction (Pty) Ltd v Ethekwini
Municipality
[2012] 1 All SA 2000 (KZP) at par 111
,
it was held:
“
The right to
just administrative action and to access to the courts are powerful
rights that can hardly be lost by the mere inaction
or refusal by a
joint venture partner to participate in their enforcement. ..... The
issue is less about standing and more about
notifying persons of the
proceedings so that they can elect to exercise the right of access
and participate in the proceedings
as plaintiffs or as defendants.”
17.
As
regards the non joinder of the “original tenderers”, I am
in agreement with the Applicant’s contention that
these
entities elected not to appeal the rejection of their bids, they also
did not launch review proceedings in relation to the
rejection of
their bids and with the exception of Khazimla, were also not party to
the prior litigation.  In the circumstances,
I do not consider
it necessary for them to have been joined in these proceedings.
THE EXCHANGE OF CORRESPONDENCE
BETWEEN THE PARTIES SUBSEQUENT TO THE PRIOR ORDER
18.
Pursuant
to the Order granted in the prior litigation, on 4 July 2013 the
Joint Venture’s attorneys addressed an email to
the City’s
attorneys which:
18.1.
Sought
clarity as to whether containers were indeed a “required
service” for the six beaches in question.
18.2.
Sought
confirmation as regards the correctness of their understanding of the
interpretation of the pricing schedule instructions,
viz, that clause
10.2. of Schedule 10 requires bidders to furnish the City with a
percentage value of each component of the deep
clean, edge cleaning,
kelp removal and waste containment and disposal services and that the
applicable rate of escalation is based
on the relevant CPI.
19.
The
City’s attorneys responded to the above correspondence on 8
July 2013 and stated inter alia as follows:
“
With regard
to the issues referred to in your email below that require
clarification by our client, we write to advise that our

understanding of the Judgment, and more particularly paragraph 3
thereof, is that your client is required to furnish further
information
to our client with regard to our client’s reasons,
as set out in its affidavits filed in the application, for declaring
your
client’s tender non responsive.  We believe that our
client’s reasons for declaring the tender non responsive are

clear and that there is no obligation on the City to clarify any
further issues in terms of the judgment granted.”
THE SUPPLEMENTARY INFORMATION
FURNISHED BY THE APPLICANT TO THE CITY
20.
In
its supplementary information, the Applicant addressed the following
two questions:
20.1.
First,
its failure to charge for waste containment and removal on six
beaches.
20.2.
Second,
the fact that its price escalation rate had been qualified.
21.
As
regards it failure to charge for waste containment and removal on six
beaches, the Applicant stated inter alia as follows:
“
12.
The City contended in the court application that it required that a
price be specified
for each beach separately to facilitate such
proper and more complete costing, accounting and reporting by the
first respondent.
13.
However, this fails to take into account the nature of the service
and in effect
means that the service provider should render a service
which is not required and levy a charge in respect thereof at the
expense
of ratepayers.  To require bidders to specify charges in
their bid documents in respect of services which are superfluous and

unnecessary is unreasonable.
....
17.
In accordance with the applicant’s position as set out in its
court papers,
we submit that the applicant’s tender be
evaluated on the basis that a nil charge has been tendered in respect
of waste containment
and removal services on the 6 beaches where the
items had been left blank.  In the circumstances, this remains
the most cost
effective option, and accordingly the most beneficial
to ratepayers.
18.
Nevertheless, if the City insists on placing bins on the 6 beaches
and requires
prices in respect of those beaches (and notwithstanding
that this would unreasonably inflate the cost of the applicant’s
tender, as well as change in its tender), the applicant hereby
attaches a revised pricing schedule with the prices for those beaches

included marked “C”.  Given that the only bid that
remains to be considered is the applicant’s it does not
affect
the fairness of the process for these prices to be included at this
late stage.  The prices are reasonable and competitive,
and are
the same as the bin prices already tendered by the applicant for the
rest of the beaches.”
22.
As
regards the question of price escalation, the Applicant stated inter
alia as follows:
“
19.
Schedule 10 of the tender document deals with contract price
escalations.  The schedule was unclear
and no explanation was
given by the City for the complex and extraordinary approach adopted
by the City – namely why the
City without reference to the
actual cost and overheads of tenderers provided its own arbitrary
allocation of 10% towards fixed
costs without escalation.
20.
The applicant interpreted the instruction in schedule 10 which stated
“the tenderer
shall indicate below the % values of “A”
to “D” he intends using for the duration of the contract”

to mean that it could simply insert a percentage for escalation
purposes.  It therefore did so by quoting an annual escalation

rate of 6.8% across the board.  This is the same approach it had
adopted for the previous tender which had been accepted and

implemented by the City.
....
23.
In the circumstances, the applicant submits that its bid should be
evaluated on the basis
that, as explained in the applicant’s
papers, it misunderstood the instructions in the price escalation
clause, which were
unclear.  The applicant accordingly attaches
a revised schedule 10.2. hereto marked “D” wherein the
applicant
has furnished the City with a percentage value for each
component of the deep clean, edge cleaning, kelp removal and waste
containment
and disposal services, with the applicable rate of
escalation based on the relevant CPI.  As is apparent therefrom,
the revised
scheduled (sic) 10.2. does not make any difference to the
tender price.”
THE CITY’S DECISION AND
ITS REASONS
23.
On 18
October 2013, the City advised the Joint Venture inter alia as
follows:
“
....
The Bid Evaluation Committee was reconvened on the 27 September 2013,
and has re-evaluated the JV’s tender submission
based on the
further information received as per clause 3 and 4 of the judgment
above.
The Joint Venture (JV)  between
Beach Clean Services South Africa CC and Wasteman Holdings (Pty) Ltd
has subsequently been
declared non responsive in terms of not
adhering to the Pricing Instruction, Evaluation Criteria and the
qualified Schedule 10:
Contract Price Adjustment and Rate of Exchange
Variations.
As the tender and award made to
Khazimla Cleaning and Gardening Services CC was set aside and no
further acceptable bids have been
received, the Supply Chain
Management Bid Adjudication Committee of the City of Cape Town on 12
October 2013 resolved that the
abovementioned tender be cancelled.”
24.
Pursuant
thereto, on 18 October 2013 the Applicant’s attorneys requested
detailed written reasons for the rejection of the
Applicant’s
tender as well as a record of decision, including the minutes and
resolutions of the meetings held by the Bid
Evaluation Committee and
the Bid Adjudication Committee.
25.
On 22
October 2013, the City responded to the request for reasons stating
inter alia as follows:
“
....
The City acted in accordance with the
prescripts of the court order and re-evaluated your client’s
tender giving due consideration
to the further information provided
by them.  It is our instructions that the said further
information however could not render
your client’s tender
responsive.
It is not the City’s intention
to prolong the matter unnecessary (sic) hence we attach a copy of the
Bid Evaluation Committee’s
(BEC) minute concerning the
re-evaluation marked “CCT1”, a copy of the report to the
City’s Bid Adjudication
Committee (BAC)  marked “CCT2”
and a copy of the BAC’s duly signed resolution marked “CCT3”.

It is our respectful submission that this documentation contains
detailed reasons why your client’s tender was rejected.”
26.
In
light of the fact that the “detailed reasons” for the
City’s decision appears in the above mentioned documentation,

they warrant careful reference.
27.
In
the report of the Bid Evaluation Committee dated 27 September 2013
the following is stated:
“
The Manager
Cleansing and Mr Hassim from Legal Services are attending the meeting
as observers.
The tender is being re-evaluated in
terms of a court order obtained by Beach Clean Services South Africa
CC (“Beach Clean”),
Case number 24190/12, Western Cape
High Court.  The said tender was initially awarded to Khazimla
Cleaning and Gardening Services
(“Khazimla”).  Beach
Clean together with Wasteman Holdings (Pty) Ltd (“Wasteman”)
tendered as a Joint
Venture but Beach Clean instituted the legal
proceedings on their own and Wasteman was cited as a respondent.
In terms of
the Court Order, Khazimla’s tender and the awarding
of the contract to them was set aside.
Furthermore, in terms of the Court
Order, the City’s rejection of Beach Clean’s tender was
reviewed and set aside and
they were granted the opportunity to
furnish further information to the City whereafter their tender was
to be re-evaluated.
Beach Clean via their attorneys, in a
letter dated 16 July 2013, submitted further information as per the
court order.  In
terms of the   further information
provided with regard to how they completed Schedule 10 of their
tender offer, which
concerns price escalation, they indicated that
they interpreted the instructions to mean that they could simply
insert a percentage
for escalation purposes and therefore they quoted
an annual escalation rate of 6.8% across the board.  They also
stated that
they had adopted this for the previous tender and it was
accepted by the City.  They further stated that they had
misunderstood
the instructions in Schedule 10 because it was unclear
and they attached a revised Schedule 10.
Having noted the amended Price
Schedule submitted by Beach Clean, the BEC cannot consider it because
it would give them a second
chance and an unfair advantage over those
other bidders who duly completed their Price Schedules and those who
were disqualified
for not complying with the instructions in the
Price Schedule and whom received no opportunity to amend or submit
new Price Schedules.
The BEC however considered the further
information provided by Beach Clean namely that the relevant items
(waste containment and
removal) left blank in the Price Schedule
should be re-evaluated on the basis that a nil charge had been
tendered for those items.
In terms of Clause 7.2.1. (d) of the
Evaluation Criteria, valid tenders will be declared Non Responsive
and eliminated from further
evaluation if the tender does not comply
with the instructions contained in the Price Schedule.  Clause
4.7. of the Pricing
Instructions in the Price Schedule states that
tenderers to tender on all items as per the pricing schedule.
Clause 7.2.1.
(f) of the Evaluation Criteria also expressly states
that valid tenders will be declared Non Responsive and eliminated
from further
evaluation if the tenderer did not tender on all items
as per the pricing schedule.  Beach Clean’s submission
that the
items left blank should be evaluated on a nil charge
confirms that they did not comply with the provisions of the
Evaluation Criteria
and the Instructions in the Price Schedule.
Similar to the amended Price Schedule submitted, the BEC noted the
new and revised
Schedule 10 submitted by Beach Clean but also cannot
consider it.  The reason being that it will give them a second
chance
and will be unfair towards those bidders who duly completed
and compiled with the provisions of Schedule 10.
The BEC however considered the further
information provided by Beach Clean, explaining why they had
completed Schedule 10 in their
own format and not as prescribed by
the tender document.  Despite this information, the BEC cannot
evaluate their Schedule
10.  The reason is because it does not
allow for a fair comparison with the other tender submissions
received over the term
of the tender (i.e the future 2 years).
The tender document provides an escalation methodology using CPIX as
a basis but
Beach Clean ignored the table wherein they had to enter
the various percentages relevant per component in a table and merely
wrote
their required overall percentage for all components together
in entirty (sic).  The effect thereof is that the BEC are unable

to compare and evaluate Beach Clean’s price escalation to those
received of the other tenderers’ price escalation.
The BEC, having re-evaluated the
tender after considering the further information provided, found the
tender submission of Joint
Venture Beach Cleaning Services South
Africa and Wasteman Holdings (Pty) Ltd to be Non Responsive.
Beach Clean confirmed
that the items left blank must be evaluated on
a nil charge and therefore they have failed to tender on all items as
instructed
by the Pricing Schedule as per clauses 7.2.1.(d) and
7.2.1.(f) of the Evaluation Criteria. The further information
provided by
them with regard to their price escalation methodology
also cannot render it valid and acceptable for reasons provided.
Due to the fact that the tender
submission of the Joint Venture Beach Cleaning Services South Africa
and  Wasteman Holdings
(Pty) Ltd having been found to be Non
Responsive and the Court having set aside Khazimla Cleaning and
Gardening Services CC’s
tender there are no further responsive
tenders.  It is therefore recommended that this tender be
cancelled.”
28.
In
the report to the Bid Adjudication Committee dated 14 October 2013,
the following is stated under the heading of “Discussion
on
Evaluation Process”:
“
The tender
for Khazimla Cleaning and Gardening Services CC and the City’s
award thereof was reviewed and set aside as per
item one (1) of the
court judgment.
Beach Clean Services South Africa CC
has submitted further information via their attorneys, .... The Bid
Evaluation Committee (BEC)
subsequently considered and re-evaluated
the JV’s tender submission on the 27 September 2013.
Additional rates were submitted by
Beach Clean Services South Africa CC for items 5.4., 6.4., 9.4,
11.4., 13.4. and 16.4. (Waste
Containment and Removal) of the pricing
schedule.  In addition, Schedule 10:  Contract Price
Adjustment and Rate of Exchange
Variations was amended according to
composite tables specified in the tender document.
The BEC could
not consider the amended pricing schedule and Schedule 10:
Contract Price Adjustment and Rate of Exchange Variations
as it would
give the JV a second opportunity and will be regarded as unfair to
the other tenderers
.
The BEC considered paragraph 17 of the
attorneys letter, that the JV’s tender be evaluated on the
basis that nil (0) charge
has been tendered in respect of items 5.4,
6.4, 9.4, 11.4, 13.4 and 16.4 (Waste Containment and Removal) which
was left blank on
the pricing schedule.
In terms of clause 4.7 of the Pricing
Instructions and clause 7.2.1 (f) of the Evaluation Criteria,
tenderers had to tender prices
on all items of the pricing schedule
to be considered responsive and therefore, nil (“0”)
charge will render the tender
submission non responsive in terms of
the said clauses.
Tenderers had to complete composite
tables for Schedule 10:  Contract Price Adjustment and Rate of
Exchange Variations which
was relevant to each item of the pricing
schedule.  The JV submitted a 6.8.% increase in rates for all
the tables.  By
altering the said schedule, the JV makes it
impossible to achieve evaluation of “comparative prices”
as defined and
prescribed in the Preferential Procurement
Regulations, 2011.  This is particularly relevant as it will
impact on the value
of the contract over the future two years and
therefore the JV is non responsive.
In summation,
the Joint Venture (JV) between Beach Clean Services South Africa CC
and Wasteman Holdings (Pty) Ltd has been declared
non responsive in
terms of not adhering to the pricing instruction, Evaluation Criteria
and qualified Schedule 10: Contract Price
Adjustment and Rate of
Exchange Variations
.
As no acceptable bids have been
received, it is recommended that the tender be cancelled in terms of
Regulation 8(4)(c) of the Preferential
Procurement Policy Framework
Act (PPPFA): Act No. 5 of 2000: Preferential Procurement Regulations,
2011.”
(Own Emphasis)
29.
On 14
October 2013 the Bid Adjudication Committee resolved as follows:
“
In response
to questions raised, the officials informed the meeting of the orders
granted High Court (sic) with regard to the award
made by SCMBAC on
12 November 2012, as listed in the report.
Members of the Committee were
concerned that this might set an unfortunate precedent.
RESOLVED that Tender No. 438S/2011/12:
Provision of Deep Beach Cleaning Machine be cancelled.”
30.
The
City subsequently sought to explain away the second paragraph of the
resolution by stating that the comment played no role in
the decision
of the BAC; and further that the comment was from “a”
member and did not constitute the decision of the
BAC.  I do not
have regard to the second paragraph of the BAC’s resolution in
reaching my conclusions in this judgment.
31.
In
its answering affidavit the City further amplified its understanding
of the Court Order and further explained the reasons for
its decision
in stating inter alia as follows:
“
14.
In terms of the Court Order, the Applicant was given the opportunity
of furnishing further information
to the City with regard to the
City’s reasons for declaring the Applicant’s tender non
responsive.
15.
I understood this to mean, and that was the way in which the BEC
evaluated the Applicant’s
tender, that further information to
clarify the Applicant’s original tender can be provided by the
Applicant in respect of
its original tender and that the BEC would
need to reconsider the original tender in light of such further
clarification
.
16.
Neither I nor the BEC understood this to mean that the Applicant was
given an opportunity
to re-tender on a different basis to that on
which it originally submitted its tender.
17.
If the Applicant were entitled to, for example, change its prices or
change the basis on
which the original offer was made, this would
have been extremely unfair to the other participants in the tender
process who were
not given such an opportunity.
18.
It would have been doubly unfair in that Applicant would, by virtue
of the review application,
have become aware of what the prices of
the tenderers were, and additionally, with the only other responsive
tenderer, Khazimla,
having been excluded from the process, the
Applicant would have been the sole participant in a process in which
it could effectively
then submit its own new prices without any risk
of competition from others and without its prices having to be
compared to those
of others.  The Applicant could therefore
“name its price” and the City would be compelled to
contract with them.
19.
Put differently, my and the BEC’s understanding of the order
of this Honourable Court was that Applicant was given the opportunity

of clarifying its bid and explaining why the bid had been submitted
in the manner in which it was done but was not entitled to
change its
bid or submit new prices
.
....
24.
In addition, Applicant did not explain why its 6.8% escalation was
inserted and why that
should be considered to be responsive by the
BEC.
25.
It changed the basis on which it had made its original bid and
amended the original bid
of 6.8% escalation to one which now
confirmed with the requirements.
26.
This, however, was as I understood the Court Order, not intended and
did not constitute
the furnishing of further information addressing
the City’s reasons for declaring the bid non responsive, but
instead constituted
an amended bid, ex post facto, which once again
would have been prejudicial to the other original tenderers who were
not given
such an opportunity, neither in terms of the Order of this
Honourable Court, nor at the time of the original process being
conducted.”
(Own Emphasis)
THE APPLICABLE PRINCIPLES TO
INTERPRETING A COURT ORDER
32.
It is
apparent from the aforegoing that the proper interpretation of the
Order of this Court in the prior litigation as handed down
on 3 July
2013 (“the prior Order”) lies at the heart of this
matter.
33.
As
stated, the prior Order refers to
further
information
with “
regard
to the City’s reasons, as set forth in this application
,
for declaring the Applicant’s tender non responsive.”
34.
The
general approach to the interpretation of a judgment or order of
Court was stated in
Firestone
South Africa (Pty) Ltd v Genticuro AG
1977 (4) SA 298
(A) as follows (at 304D-H)
[1]
:
“
The basic
principles applicable to construing documents also apply to the
construction of a court's judgment or order: the court's
intention is
to be ascertained primarily from the language of the judgment or
order as construed according to the usual, well-known
rules. . . .
Thus, as in the case of a document, the judgment or order and the
court's reasons for giving it must be read as a
whole in order to
ascertain its intention. If, on such a reading, the meaning of the
judgment or order is clear and unambiguous,
no extrinsic fact or
evidence is admissible to contradict, vary, qualify, or supplement
it. Indeed, it was common cause that in
such a case not even the
court that gave the judgment or order can be asked to state what its
subjective intention was in giving
it. . . . Of course, different
considerations apply when, not the construction, but the correction
of a judgment or order is sought
by way of an appeal against it or
otherwise - see infra. But if any uncertainty in meaning does emerge,
the extrinsic circumstances
surrounding or leading up to the court's
granting the judgment or order may be investigated and regarded in
order to clarify it;
for example, if the meaning of a judgment or
order granted on an appeal is uncertain, the judgment or order of the
court a quo
and its reasons therefor, can be used to elucidate it.
If, despite that, the uncertainty still persists, other relevant
extrinsic
facts or evidence are admissible to resolve it.”
35.
In
Frankel
Max Pollak Vinderine Inc v Menell Jack Hyman Rosenberg & Co Inc
[1996] ZASCA 21
;
1996 (3) SA 355
(A) at 363 A (which arose in the context of an
arbitration award where the Arbitrator had not provided reasons), the
Court held:
“
In the
present case the arbitrator did not give any reasons for the orders
which he made in his award. Consequently the interpreter
is initially
confined to the language of the orders. If, however, uncertainty as
to the meaning of the orders or one of them, emerges
from a
consideration of the language used, then recourse may be had to
extrinsic circumstances. There is a dearth of authority
as to what
extrinsic circumstances may be referred to in a situation such as
this. No relevant authority was quoted to us; and
I have not found
any. On general principles and as a matter of logic, however, it
seems to me that such extrinsic circumstances
include the issues
which were submitted to the arbitrator for adjudication and the
evidence placed before him, insofar as such
evidence throws light
upon what the canvassed issues were.”
36.
On
the facts of this matter, it is apparent from paragraph 3 of the
prior Order that it self-evidently contemplates that regard
be had to
“the City’s reasons” as set forth in
that
application in order to determine the nature of the “further
information” that the Applicant had been granted a further

opportunity to furnish.
37.
Before
examining the City’s reasons, it is however necessary to
examine the nature of the alleged deficiencies in the Applicant’s

bid in the prior litigation as well as the relevant tender conditions
and criteria that were at issue.
THE
COMPLAINTS ABOUT THE APPLICANT’S BID IN THE PRIOR LITIGATION
The
Conditions of Tender and Evaluation Criteria
38.
The
following aspects of the tender document itself is relevant to these
proceedings,
viz
:
38.1.
The
Conditions of Tender in Part 6 states:  “All tender
conditions and/or instructions set out below must be strictly
adhered
to, failing which this tender submission will be declared
non-responsive.”  Part 6 includes the following
conditions:
38.1.1.
Clause
6.2. states:  “Any portion of the tender document not
completed will be interpreted as ‘not applicable’.

Notwithstanding the aforegoing, failure to complete any compulsory
portion of the tender document may result in the tender being

declared non-responsive.”
38.1.2.
Clause
6.7 states:  “The CCT may, after the closing date, request
additional information or clarification of tenders
in writing.”
38.2.
Part
7 of the tender document addresses the Evaluation Criteria and
provides inter alia as follows:
38.2.1.
In
clause 7.2.1, valid tenders will be declared non responsive and
eliminated from further evaluation if, inter alia: (a) the tender

does not comply with the instructions as contained in the Price
Schedule (Part 4); (b) the tenderer did not tender on all items
as
per the pricing schedule.
38.2.2.
In
clause 7.2.2, tenders will be declared non responsive if the tenderer
fails to adhere to a written request (within the specified
period set
out in such request) to inter alia: (a) comply with the general
conditions applicable to tenders as set out in the City’s
SCM
Policy; (b) comply with one or more of the provisions contained in
the Conditions of Tender (Part 6); (c) comply with other
terms and
conditions of the tender as contained in the tender document.
Clause 7.2.2 further provides that the items identified
therein do
not constitute a closed list.
The pricing schedule
39.
As
regards the Applicant’s failure to have priced all items, the
tender document stated as follows in the Price Schedule under
the
heading of “Pricing Instructions”:
“
4.1
All prices shall be tendered excluding VAT but including customs or
excise duty and any other duty,
levy or other applicable tax.
4.2
All prices shall be tendered in accordance with the units specified
in this schedule.
4.3
All prices must include all expenses, disbursements and costs ....
4.4
The rates tendered must be per single clean up operation.
4.5
The tender will be evaluated on the estimated maximum quantities per
annum.  The City
will not necessarily order the estimated
quantities.  The contract will be for the ordered quantities as
and when required
by the City, at the City’s sole discretion.
The contractor must only invoice for the work detailed in official
purchase
orders.
In
addition, the tender will be evaluated on the technical
specifications of the Deep Beach Cleaning Machine being offered.
4.6
Prices tendered  below shall be subject to adjustment in
accordance with Schedule 10.
4.7
Tenderer to tender on all items as per the pricing schedule.
4.8
Council reserves the right to award to one company only.”
40.
The
Pricing Schedule itself made provision for the sixteen beaches that
are the subject of the bid.  By way of example, the
Pricing
Schedule is structured as follows in relation to Melkbos beach (the
same structure is followed in respect of all sixteen
beaches):
ITEM
LOCATION
FUNCTION
AREA
M
3
UNIT
ESTIMATED
QUANTITY PER ANNUM
RATE
(PER VISIT) EXCLUDING VAT
1.1
Melkbos
(to be cleaned at a depth of 75mm)
Deep
clean
42602
Per
visit
7
1.2
Melkbos
(to be cleaned at a depth of 75mm)
Edge
clean
42602
Per
visit
7
1.3
Melkbos
(to be cleaned at a depth of 75mm)
Kelp
removal
42602
Per
visit
7
1.4
Melkbos
(to be cleaned at a depth of 75mm)
Waste
containment and removal
42602
Per
visit
7
41.
It is
common cause that the Applicant’s bid as regards pricing was
considered to be non compliant with the tender requirements
because
it had failed to insert a price for the last function (which had been
left blank), viz, waste containment and removal.
It was as a
result of this omission that the City adopted the view that the
Applicant had failed to comply with inter alia clause
4.7 as quoted
above.
42.
The
Applicant, on the other hand provided the following explanation in
regard to its failure to insert a price for waste containment
and
removal in respect of the six beaches:
42.1.
The
Applicant intended to render the “waste containment and
removal” services at the said beaches, but it did not intend
to
charge the City separately in respect thereof.  This was
consistent with the position in previous years.
42.2.
A
waste bin is only required at a particular beach when mechanical
beach cleaning occurs and for the duration thereof.
Accordingly,
the waste containment and removal function is only
usually relevant for one day per beach on a rotational (monthly)
basis.
There is never a continued need for a waste bin at any
beach.
42.3.
The
Applicant, in light of its extensive experience in rendering
services, has a comprehensive understanding of exactly where and
when
waste bins are required.  For example, Muizenberg Beach, a large
beach, is very close to Sunrise Beach, which is a small
beach.
It is only necessary to have one 10m
3
waste bin, which will be sufficient for both beaches when mechanical
cleaning is carried out thereof.  This reasoning applies
equally
in relation to each of the six specified beaches.
42.4.
It
would be unnecessary and an unwarranted cost to ratepayers for the
Applicant to have separately and additionally imposed a charge
for
the provision of these services at the six specified beaches.
43.
The
Applicant has explained that it is unable to “apportion”
the waste containment prices across all beaches inter alia
because it
is impossible in that:
43.1.
Such
an exercise can only take place after the waste has been collected at
the beaches in question; and
43.2.
Each
and every time waste is collected the apportionment of costs will
necessarily be different.
The contract price for adjustment
44.
Schedule
10 of the tender entitled: “Contract Price Adjustment &
Rate of Exchange Variations” provided inter alia
as follows:
“
10.1
No price escalation will be considered for the first year ending 30
June 2013.
10.1.1
Price variation will be considered for the second
year commencing 1
July 2013.  Price adjustment must be claimed as per clause 10.3
and can be claimed annually.
10.1.2
Price variation will be considered for the third year commencing
1
July 2014.  Price adjustment must be claimed as per clause 10.3
and can be claimed annually.
Failure to complete these clauses will
result in the Tender prices being deemed to be FIRM.”
45.
Schedule
10 also regulates the price composition in respect of each of the
four elements of the tender.  The same structure
is followed in
relation to all four elements.  By way of example in relation to
“Deep Clean”, the tender document
provides as follows:
“
10.2.1.1
The values of A, B, C and D shall total to 100%.  The Tenderer
shall
indicate below the (%) values of “A” to “D”
he intends using for the duration of the contract.
VALUE
COMPONENT
(PRICING
SCHEDULE) %
APPLICABLE
TABLE
A
Machine
South
African CPI (*)
B
Labour
South
African CPI (*)
C
Material
South
African CPI (*)
D
Fixed
10%
TOTAL
100%
(*) Escalation shall be calculated
using the indices of three months prior to the month in which the new
price is to become applicable.”
46.
It is
common cause that the Applicant wrote a figure of 6.8% in the block
below the subheading “pricing schedule” and
that its
intention was that the figure of 6.8% would apply to all the
components of the work.  It is also common cause the
Applicant
did not comply with the tender requirements regarding Schedule 10 by
having submitted a figure of 6.8% across the board.
47.
It is
against the backdrop of both the above complaints that the Order and
judgment of the Court in the prior litigation must be
examined.
THE PRIOR JUDGMENT OF THE COURT
AND THE RECORD IN THE PRIOR LITIGATION
48.
The
judgment referred to numerous judgments dealing with the requirement
that a tender system must be fair, equitable, transparent,

competitive and cost effective and that an unduly technical and
formalistic approach should not be adopted.
49.
The
Court in the prior litigation concluded as follows:
“
[49]
In my view the City’s officials erred by failing to adhere to
the principles laid down by the Supreme
Court of Appeal in the
judgments to which I have referred above.  They adopted a
technical and formalistic approach to the
applicant’s tender
instead of focusing on the substance of the matter, namely the
application of constitutional values referred
to above.  It
would not have been difficult for the officials to direct queries to
applicant in order to clarify the issues
in question.  They do
not concern complicated issues.
The
conditions of tender make provision for queries in regard to items
that were not clear.  The officials, however decided
to rely on
the rather technical distinction between the items mentioned in paras
7.2.1. and 7.2.2. in (sic) of the conditions of
tender and apply them
in a formalistic manner.  In the process they appear to have
overlooked the provisions of para 6.7.
of the conditions of tender
.
[50]
Applicant had been rendering the services in question for many
years.  There is no suggestion
that its work was not up to
standard.  There is no allegation that the defects in its tender
(if they were indeed defects)
were due to any mala fide conduct on
its part.  No tenderer would have been prejudiced if the
applicant had been afforded
an opportunity to clarify the alleged
defects.  Nor would the integrity of the process have been
implicated.
[51]      Had
the respondent’s officials followed the approach set out in the
judgments of the Supreme
Court of Appeal to which I have referred
above, they would in my view have directed appropriate queries to
applicant
to allow it to cure the omissions in its tender
.
Their failure to have done so is in my view in conflict with section
217(1) of the Constitution and therefore unlawful.”
(Own Emphasis)
50.
I
will now give some attention to the content of the affidavits filed
in the prior litigation.
51.
In
the prior litigation, the Applicant averred as follows in its
founding affidavit:
“
43.
The applicant inserted a price (in the column entitled “Rate
(per visit) excluding
VAT”) for all of the services except in
respect of “waste containment and removal” in respect of
the beaches
Hout Bay East, Sunrise, Strandfontein Coastal Resort,
Monwabisi, Bikini Beach and Strand 2 (Greenways).  The reason
why these
items were left blank is simply because the applicant did
not intend to charge the City in respect of those services, for the
reason
which follows.
....
47.
I point out that when the Bid Evaluation Committee opened and
considered the applicant’s
tender, and noticed these blank
spaces in the pricing schedule, if there was any doubt in that
committee’s mind as to what
was intended by the applicant (i.e.
whether it intended to charge for these items or not), this
uncertainty could have been cleared
up by simply directing a request
to the applicant (by letter or telephone) to clarify the matter.
Having regard to the simplicity
of the explanation furnished above,
this could easily and quickly have been disposed of.  Indeed,
the City’s own tender
document makes provision for queries to
be raised with and answered by tenderers in correspondence (see e.g.
paragraph 7.2.2. of
the evaluation criteria).
48.
I submit that, having regard to the extensive history of the
applicant rendering these services,
one would have expected the Bid
Evaluation Committee to appreciate that the applicant is well aware
of exactly what is required
in the rendering of these services and
how those services (have been and) are billed.
49.
In summary therefore, the applicant only indicated a charge for the
waste containment and
removal function in those instances where a bin
was strictly necessary, and the pricing block was left blank and
where a bin would
not be required.”
52.
The
City stated
inter
alia
as follows in its Answering Affidavit in the prior litigation:
“
3.3.
Items 7.2.1.(d) and (f) of section (7) of the tender (the Evaluation
Criteria section,
page 19 of annexure “RV1” to the
founding affidavit) make it clear that tenders which meet
[2]
the preceding requirements for “validity” will be
declared “non responsive” and will be eliminated from

further evaluation if the tender does not comply with the
instructions contained in the price schedule and the tenderer did not

tender on
all
items
as per the pricing schedule.
3.4.
Items 4.2. and 4.7. of section (4) (the Pricing Schedule, page 7 of
the tender document)
made it abundantly clear that all prices were to
be tendered in accordance with
the units
specified in the
schedule and the tenderer was to tender on
all items
as per
the pricing schedule.
3.5.
Applicant’s tender was non-responsive on two grounds:
3.5.1.  The waste containment and
removal sections of the tender, items 5.4, 6.9, 9.4, 11.4, 13.4 and
16.4 were not completed
(tender document pages 9-12).
3.5.2.  Section 10:
Contract Price Adjustment and Rate of Exchange Variations (pages
49-50) were qualified.  Instead,
of providing a specific
percentage value for each of the items reflected under item 10.2.
(being in respect of machine, labour
and material for deep cleaning,
labour and material for edge cleaning, material and labour for kelp
removal and transport container
/ skip, labour and disposal for waste
containment and disposal), the various separate items being required
to total 100% for each
component, with the South African Consumer
Price Index to be applied to each component, Applicant qualified the
whole schedule
by simply providing for escalation of 6.8% for all
items in toto.
3.6
Since the bid was non responsive it was eliminated for further
evaluation in
accordance with the provisions of Item 7.2.
....
3.19
The explanation for the overall tender price of the joint venture
being less than that
of the Second Respondent is attributable to the
fact that the joint venture failed to complete every specific item,
as required
in the tender conditions, which rendered the bid non
compliant, non responsive and therefore unacceptable.
....
12.
The pricing schedule (schedule (4)) provides for itemised rates per
function
per beach visit.
13.
It is furthermore based on estimated quantity (number of visits) per
annum.
14.
The reason for this is that the service is an ad hoc service which
the City
would require the successful tenderer to render as and when
the cleaning of the beaches is required.
....
15.
As specified in item 1.6 of schedule (5) the contract includes the
collection,
transport and legal disposal of all debris collected.
16.
Contractors must include proof of disposal at an approved disposal
site together
with invoices.
17.
Waste skips may be used for the temporary storage of the collected
debris.
18.
All skips must be immediately removed at the end of the daily
cleaning operations.
19.
No profit may be made on disposal of tariff as charged by any
disposal facility.
20.
This relates to the “waste containment and removal” item
in the
pricing schedule, which was left blank by the joint venture on
many of the beaches.
21.
The City will be charging the successful tenderer for the acceptance
of such
debris at its waste disposal sites.
22.
It was for this reason, inter alia, that it was imperative (and
therefore set
as a strict requirement in the bid document) that the
item be completed, not only in order to ensure that that service for
the
specific beach would be rendered (i.e. that the waste would be
disposed of) but also that the tenderer (the City) could account
/
track the costs per beach for each of the relevant items.
23.
The City for its own accounting, planning, monitoring and reporting
purposes
required this.  This was why the bid further required
statistics of each visit / cleaning of each beach, etc (as provided
for in item 1.7 of the schedule (5).
24.
The tender document in various places emphasised (and repeated) the
importance
that the tender document be properly completed.
.....
118.
If Applicant / the joint venture was not going to charge First
Respondent for services in respect of certain beaches, it needed to

have reflected that there would be no charge in respect of these
services
.
119.
Leaving it blank firstly rendered the bid non responsive and
therefore unacceptable in
light of the conditions set.
120.
In addition, it posed the question how the joint venture would
recover the costs of waste
containment and removal in respect of
these beaches, particularly since the City would be charging them for
the receipt of this
waste and further disposal thereof.
121.
Leaving the item blank furthermore raised the question whether
these services would indeed be rendered in respect of these beaches

and finally left First Respondent unable to apportion the relevant
costs in respect of these services on these beaches to those
beaches
.
122.
The very reason the price specifications were stipulated as they were
in the invitation
to bid was in order to facilitate such proper and
more complete costing, accounting and reporting by the First
Respondent.
...
124.
If a container is not required on each beach on a continuous
basis, or if no continuous need for a waste bin to remain at any
beach
is required, it was nevertheless incumbent on the joint venture
bidder to provide a cost in respect of services which needed to
be
rendered at that beach, if only on a proportionate basis appropriated
to the beach in question in terms of whatever other mathematical

formula the joint venture wishes to use
.
....
127.
By loading certain charges onto certain beaches and not charging for
other beaches, when
the services were required at all beaches, apart
from rendering the bid non responsive, also resulted in First
Respondent being
unable to do a proper cost apportionment or
accounting of services per beach which was part of the reason for the
bid specifications
have been set in the way they were.”
(Own
Emphasis)
53.
The
City’s justification in the prior litigation for the flat
escalation rate was as follows:
53.1.
The
flat escalation rate applicable to all components qualified the rate
set by the First Respondent inter alia in that First Respondent

sought to rely on the Consumer Price Index whereas the flat rate
submitted by the joint venture of 6.8% may or may not have complied

with the CPI over the forthcoming years.
53.2.
If
6.8% was lower than the CPI it was indeed a qualification of the
escalation rate set by the First Respondent, which would have

resulted in First Respondent and the ratepayers being prejudiced in
that the services in the future would be paid at an escalated
rate
lower than the CPI.  In addition, the Joint Venture’s
qualification of the escalation rate rendered it unfair to
other
bidders who complied with the conditions of tender and sought to
allocate the different percentages to the different components
of
their tenders with reference to the CPI requirement set by First
Respondent.
53.3.
The
qualification is to the CPI requirement set by the City.  The
apportionment between the various items was to allow the
First
Respondent to properly record, monitor, account for and report n the
various components of the work in question and apply
the CPI (and in
certain cases the appropriate index, for example in the case of
wages) to the constituent components of each set
of process in
accordance with the indicated percentages.  If material were to
constitute say 60% of the total price for a
certain item and CPI on
material 5% and the total price for the one item was R 10 000.00,
the price increase on materials
in respect of the work in question
would be 60%of R 10 000 x 5%. If CPI for wages happened to be
say 5.5.% and wages were
30% of the total cost for the item in
question, a different calculation would have been required.  The
Applicant’s bid
simply does not allow for this exercise to be
done, and not does it permit the Applicant to compare its bid to that
of other bidders.
It requires 6.8% to be applied to the total
sum of R 10 000.00 in the example which would have a very
different result to
the other examples provided herein.  It was
therefore held to be non responsive.
THE INTERPRETATION OF CLAUSE 3
OF THE PRIOR ORDER
54.
In
light of the judgment and affidavits filed in the prior litigation
(as read with the Order), I am of the view that clause 3 of
the Order
of the Court in the prior litigation allowed the Applicant to furnish
further information in order to “cure”
the following
“omissions” in the tender:
54.1.
The
Applicant’s failure to provide prices for waste removal in
respect of certain of the beaches.
54.2.
The
Applicant’s failure to have complied with Schedule 10 in
relation to escalation.
55.
I do
not agree with the City’s interpretation of clause 3 of the
Order and more particularly that clause 3 of the Order allowed
for a
clarification but not an amendment of the Joint Venture’s bid
for the following reasons:
55.1.
First,
it would serve little purpose for the Order to have given the
Applicant the opportunity to “clarify its bid”
and
explain why it had been submitted in the manner in which it was but
not entitle the Applicant to alter or amend its bid.
In light
of the complaints raised by the City as read with the content of
Schedules 4 and 10 (the relevant portions of which have
been quoted
above), it is difficult to conceive of what “clarity”
could be provided that did not entail an amendment
to the bid,
particularly in circumstances where in terms of paragraph 4 of the
Order the City is directed, after receipt of the
information to
consider
and
evaluate
the Applicant’s tender.  The City’s interpretation
begs the question as to what consideration and evaluation the
City
could have given to the further information if all that was required
from the Applicant was an “explanation” of
why the bid
had been submitted in the form that it had.  Of relevance in
this regard is the Court’s reasoning in the
prior judgment in
respect of paragraphs 7.2.1. and 7.2.2. of the conditions of tender
where it stated as follows:  “The
conditions of tender
make provision for queries in regard to items that were not clear.
The
officials, however decided to rely on the rather technical
distinction between the items mentioned in paras 7.2.1. and 7.2.2.
in
(sic) of the conditions of tender and apply them in a formalistic
manner
.
In the process they appear to have overlooked the provisions of para
6.7. of the conditions of tender.”  In my
view, the effect
of the quoted passage of the prior judgment is that the Court found
that the City’s distinction between
paragraphs 7.2.1. and
7.2.2. was a “technical” one and had been applied in a
formalistic manner, thereby suggesting
that paragraph 6.7.
(i.e. that the City may request additional information or
clarification of tenders in writing after the
closing date) applied
in relation to the items identified in clauses 7.2.1. and 7.2.2.
55.2.
Second,
the City’s interpretation of the prior Order is also
irreconcilable with some of its own earlier correspondence:
55.2.1.
An
email that the City addressed to the Applicant’s attorneys on
11 September 2013 states inter alia as follows:
“
Writer
therefore requests your client to hold further action over pending
the outcome of Khazimla’s application on 19 September
2013.
We are currently in the process of reconvening the Bid Evaluation
Committee to inter alia evaluate your client’s
tender offer
with regard to the further information provided.
The
further effect of the judgment is that another tender offer, which
was initially non responsive, must also now be considered
and
evaluated.  Your client will be notified thereof though
.”
[3]
(Own Emphasis)
In light of the City’s
interpretation of the Order (viz, that it did not permit any
amendment to a bid that had been submitted),
it is difficult to
conceive of why another tender offer (which had initially been found
to be non responsive) needed to be reconsidered
and evaluated again.
55.2.2.
A
further email from the City dated 3 October 2013 which refers to a
formal report from the BEC on “the outcome of the
re-evaluation
”.
Again, it is difficult to understand what re-evaluation would have
been necessary in light of the City’s interpretation
of the
prior Order.
55.3.
Third,
I agree with the Applicant that there were no other competing
tenderers’ interests to take into account and that the

Applicant’s bid was the only bid in contention.
55.4.
Fourth,
I do not accept that what the prior Order contemplated was for the
costs of the waste containment on the smaller beaches
to be
apportioned for reasons proffered by the Applicant, viz: (a)
apportionment can only take place after waste has been collected

because it is only at that stage that waste and volume of the waste
collected can be determined and that the apportionment would
vary
each time waste is collected; (b) the tender document itself makes no
reference to the apportionment; (c) an apportionment
would, in any
event entail an
amendment
to the bid in that it would, of necessity, entail an
alteration
on prices
already submitted.  I am of the view that had this been the
objective of the prior Order, it could very easily have stated
so in
terms, particularly given that the question of apportionment was
raised in the prior litigation.  In any event, the
Order was not
limited to Schedule 4 but also included Schedule 10; accordingly its
ambit could, by no means have been limited to
the question of
apportionment.
55.5.
Fifth,
on the City’s interpretation, it is difficult to conceive of
what the prior Order contemplated in respect of Schedule
10.  It
is noteworthy in this regard that the tender document itself provided
that a failure to complete Schedule 10 will
result in the Tender
prices being deemed to be FIRM. The Preferential Procurement
Regulations, 2011published under GN R502 in GG
34350 of 8 June 2011
defines “firm price” to mean “the price that is
only subject to adjustments in accordance
with the actual increase or
decrease resulting from the change, imposition, or abolition of
customs or excise duty and any other
duty, levy, or tax, which, in
terms of the law or regulation, is binding on the contractor and
demonstrably has an influence on
the price of any supplies, or the
rendering costs of any service, for the execution of the contract.”
The City’s
Supply Chain Management Policy contains the same
definition.
[4]
It is significant in this regard that instead of the prior Order
having found that the consequence of the manner in which
the
Applicant had filled in Schedule 10 was that the tender price would
be deemed to be FIRM; the effect of the prior Order was
to allow the
Applicant to provide further information in order to address the
City’s complaint in relation to Schedule 10.
56.
For
these reasons, I am of the view that the prior Order did indeed
permit the Applicant to
cure
the omissions
in its bid.  This, of necessity, in my view, entailed an
amendment to the Applicant’s bid.
57.
I am
not persuaded by the City’s reasoning that the prior Order did
not contemplate an amendment to the bid because such an

interpretation would have given the Applicant a “second chance”
and an “unfair advantage” over other bidders.
If
this was indeed the City’s concern, it ought to have challenged
the prior Court Order.  This, it failed to do.
I am minded
in this regard of:
57.1.
The
recognition by the Constitutional Court that tender processes require
“strict and equal compliance by all competing tenderers
on the
closing day for submission of tenders”.
[5]
57.2.
Furthermore,
the City’s own Supply Chain Management Policy (July 2013)
contemplates instances where there may be negotiations
with preferred
bidders; this negotiation however, is subject to certain
constraints.  For instance, clause 251 provides:
“
251.
The City Manager may authorise the negotiation of the final terms of
a contract with bidders identified through
a competitive bidding
process as preferred bidders provided that such negotiation:
251.1  does not allow any
preferred bidder a second or unfair opportunity.
251.2  is not to the detriment of
any other bidder; and
251.3  does not lead to a higher
price than the bid as submitted.”
THE CITY FAILED TO COMPLY WITH
THE PRIOR COURT ORDER
58.
In
light of the interpretation I have given to the prior Court Order,
the question that follows is whether the City did indeed comply
with
the prior Court Order.
59.
In
terms of paragraph 4 of the prior Order of this Court, the City was
obliged to consider and evaluate the Applicant’s tender
after
receipt of the further information.
60.
It is
apparent from the City’s “detailed reasons” (as
quoted above) that the City was very concerned about giving
the
Applicant a “second chance” and an “unfair
advantage” over other bidders.  This stance, in my
view,
precluded the City from properly considering the further information
that the Applicant submitted pursuant to the Court Order.
61.
In
the result, I am of the view that the City committed a reviewable
irregularity in declaring the Applicant’s bid non-responsive

notwithstanding the supplementary information of 16 July 2013.
In this regard, I am satisfied that the City committed a mistake
of
law and/or failed to take all relevant considerations into account
and/or failed to act in accordance with the principle of
legality.
THE ENVIRONMENTAL CONCERNS
62.
In
its answering affidavits, the City contends that:
62.1.
Mechanical
beach cleaning has become “controversial” in light of
certain destructive consequences (including destruction
of sand
organisms).
62.2.
It is
currently in further discussions with its Environmental Department as
to the advisability of doing deep beach cleaning at
all.
62.3.
In
view of these “environmental issues”, it has become
“entirely inappropriate for any contract to now be awarded
to
the Applicant or any other bidder.”
63.
At
the outset, it is significant that the City’s decision to
cancel the tender was not due to any environmental issues.
The
reason was the purported absence of any acceptable bids.  I have
referred to the relevant documentation from the City
in this regard.
64.
As
regards the question of reasons in respect of administrative action,
in
Jicama
17 (Pty) Ltd v West Coast District Municipality
2006 (1) SA 116 (C),
[6]
this Court has previously held:
“
[11] I agree
with counsel for the applicant that, having found that a binding
agreement had come into effect between the parties,
it is not open to
the first respondent to raise the other defences raised for the first
time in its answering papers. The applicant
has come to court in
order to deal with the reason which was conveyed to it as being the
basis on which the decision to cancel
the tender had been made. The
reason why the first respondent should not now be allowed to
supplement the basis on which its previous
decision was taken is
eloquently set out in a judgment of the Court of Appeal in R v
Westminster City Council, Ex parte Ermakov,
viz:
'(2) The court can and, in appropriate
cases, should admit evidence to elucidate or, exceptionally, correct
or add to the reasons;
but should, consistently with Steyn LJ's
observations in Ex p Graham, be very cautious about doing so. I have
in mind cases where,
for example, an error has been made in
transcription or expression, or a word or words inadvertently
omitted, or where the language
used may be in some way lacking in
clarity. These examples are not intended to be exhaustive, but rather
to reflect my view that
the function of such evidence should
generally be elucidation not fundamental alteration, confirmation not
contradiction. Certainly
there seems to me to be no warrant for
receiving and relying on as validating the decision evidence - as in
this case - which indicates
that the real reasons were wholly
different from the stated reasons. It is not in my view permissible
to say, merely because the
applicant does not feel able to challenge
the bona fides of the decision-maker's explanation as to the real
reasons, that the applicant
is therefore not prejudiced and the
evidence as to the real reasons can be relied upon. This is because,
first, I do not accept
that it is necessarily the case that in that
situation he is not prejudiced; and, secondly, because, in this class
of case, I do
not consider that it is necessary for the
applicant to show prejudice
before he can obtain relief. Section 64
requires a  decision and at the same time reasons; and if no
reasons (which is the
reality of a case such as the present) or
wholly deficient reasons are given, he is prima facie entitled to
have the decision quashed
as unlawful.
(3) There are, I consider, good policy
reasons why this should be so. The cases emphasise that the purpose
of reasons is to inform
the parties why they have won or lost and
enable them to assess whether they have any ground for challenging an
adverse decision.
To permit wholesale amendment or reversal of the
stated reasons is inimical to this purpose. Moreover, not only does
it encourage
a sloppy approach by the decision-maker, but it gives
rise to potential practical difficulties. In the present case it was
not,
but in many cases it might be, suggested that the alleged true
reasons were in fact second thoughts designed to remedy an otherwise

fatal error exposed by the judicial review proceedings. That would
lead to application to cross-examine and possibly for further

discovery, both of which are, while permissible in judicial review
proceedings, generally regarded as inappropriate. Hearings would
be
made longer and more expensive.”
65.
Furthermore,
Regulation 8(4) of the Preferential Procurement Regulations, 201
published under GN R502 in GG 34350 of 8 June 2011
[7]
provides
as follows:
“
(4)
An organ of state may, prior to the award of a tender, cancel a
tender if-
(a)
due to changed circumstances, there is no longer a need for the
services, works or goods
requested; or
(b)
funds are no longer available to cover the total envisaged
expenditure; or
(c)
no acceptable tenders are received.”
66.
I am
of the view that despite the environmental concerns having been
raised in the City’s answering affidavit, they were not
the
City’s reasons for its decision to cancel the tender.
Accordingly, in my view the City has failed to demonstrate
that its
decision to cancel the tender fell within the purview of Regulation
8(4)(a) referred to above.
67.
In
any event, the City’s stance is that it is presently in further
discussions with its Environmental Department as to the
advisability
of doing deep beach cleaning at all.  Accordingly, it has not
yet definitively determined that the services are
no longer required
in terms of Regulation 4(a).  Indeed, until the prior judgment
of this Court the City was prepared to have
awarded the tender to
Khazimla notwithstanding the alleged environmental concerns.
68.
Furthermore,
the City is in any event itself cleaning all beaches mechanically and
has been doing so since July 2012, using a beach
cleaning machine
akin to that of the Applicant.
69.
In
the result, I am of the view that the City’s environmental
concerns were not and could not have been the
reason
for its cancellation of the tender on 14 October 2013.
70.
In
light thereof, coupled with my finding that the City committed a
reviewable irregularity in declaring the Applicant’s bid

non-responsive notwithstanding the supplementary information of 16
July 2013, it must follow that the City’s decision to
cancel
the tender must also be reviewed and set aside.
AN ORDER FOR SUBSTITUTION
71.
In
terms of section 8(1)(c)(ii)(aa) of the Promotion of Administrative
Justice Act No. 3 of 2000 (“PAJA”), a Court is
empowered
in “exceptional cases” to substitute or vary
administrative action or correct a defect resulting from
administrative
action.  The Applicant seeks an Order of this
nature in these proceedings.
72.
In
Erf
One Six Seven Orchards CC v Greater Jhb Metropolitan Council (Jhb
Administration)
[1998] ZASCA 91
;
1999 (1) SA 104
(SCA) at 109 the Court held that the general
principle is that the matter will be sent back to the decision-maker
unless there
are special circumstances giving reason for not doing
so.  In essence substitution of a decision entails a question of
fairness
to both sides.
[8]
73.
In
University
of the Western Cape and Others v Member of Executive
Committee for Health and Social Services and Others
1998 (3) SA 124
(C) at 131D - J the Court summarised the guidelines
concerning substitution:
“
Where the
end result is in any event a foregone conclusion and it would merely
be a waste of time to order the tribunal or functionary
to reconsider
the matter, the Courts have not hesitated to substitute their own
decision for that of the functionary. . . . The
Courts have also not
hesitated to substitute their own decision for that of a functionary
where further delay would cause unjustifiable
prejudice to the
applicant. . . . Our Courts have further recognised that they will
substitute a decision of a functionary where
the functionary or
tribunal has exhibited bias or incompetence to such a degree that it
would be unfair to require the applicant
to submit to the same
jurisdiction again. . . . It would also seem that our Courts are
willing to interfere, thereby substituting
their own decision for
that of a functionary, where the Court is in as good a position to
make the decision itself. Of course the
mere fact that a Court
considers itself as qualified to take the decision as the
administrator does not per se justify usurping
the administrator's
powers of functions. In some cases, however, fairness to the
applicant may demand that the Court should take
such a view.”
74.
In
this matter, there is no evidence of bias or incompetence; nor is
there reason to believe that the City will not apply its mind
fairly
and properly to the supplementary information that the Applicant has
furnished it with.  I am also mindful of the specialised
nature
of the services that form the subject-matter of this tender.
Accordingly, I am of the view that there is no basis
for this Court
to substitute its decision for that of the decision-maker.
CONCLUSION
75.
In
the result, I make the following order:
75.1.
The
Respondent’s decision (taken on or about 14 October 2013) to
declare as unresponsive the bid of the Applicant and its
joint
venture partner, Wasteman Holdings (Pty) Ltd (collectively referred
to as the “Joint Venture”) submitted pursuant
to tender
number 438S/2011/12 (for the provision of deep beach cleaning, “the
tender”) is reviewed and set aside.
75.2.
The
Respondent’s decision to cancel the tender taken on or about 14
October 2013 is reviewed and set aside.
75.3.
The
Respondent is ordered to reconsider and evaluate the Joint Venture’s
bid (as supplemented by the information submitted
to the Respondent
on or about 16 July 2013) within three (3) weeks from the date of
judgment.
75.4.
The
Respondent is ordered to pay the Applicant’s costs, such costs
to include the costs of two counsel.
K PILLAY
Acting Judge of the High Court
25
March 2014
[1]
See too:
Administrator,
Cape, and Another v Ntshwa-qela and Others
1990 (1) SA 705
(A) at
715F-716C; Weber-Stephen Products Co v Alrite Engineering (Pty) Ltd
and Others
[1992] ZASCA 2
;
1992 (2) SA 489
(A) at 494E-H.
[2]
This wording
appears to be an error and the words “do not” should
precede the word “meet”.
[3]
The Applicant’s
attorneys did not accept that a tender from another tenderer
(Sisonke) had to be considered and evaluation
pursuant to the
judgment, which stance the City ultimately agreed with.
[4]
Clause 1.37.
[5]
Steenkamp
NO v Prov Tender Board, EC
2007 (3) SA 121
(CC) at par 60 and All
Pay Consolidated Investment Holdings (Pty) Ltd
[2013] ZACC 42
at par 39.  See too:  Metro Projects CC v Klerksdorp Local
Municipality
2004 (1) SA 16
(SCA) at par 13; Chairperson, Standing
Tender Committee v JFE Sapela Electronics (Pty) Ltd
2008 (2) SA 638
(SCA) at par 19.
[6]
See too:
National Lotteries Board v SA Education & Environment Project
2012 (4) SA 504 (SCA).
[7]
These grounds for
cancellation are also contained in clause 255 of the City’s
Supply Chain Management Policy.
[8]
See too:
Commissioner,
Competition Commission v General Council of the Bar of SA
2002 (6)
SA 606
(SCA) at par 14.