About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2015
>>
[2015] ZAWCHC 32
|
|
Trans Creations KZN CC v City of Cape Town and Another (19367/2014) [2015] ZAWCHC 32 (23 March 2015)
Republic of South
Africa
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE DIVISION,
CAPE TOWN)
Case no: 19367/2014
DATE: 23 MARCH 2015
In the matter between:
TRANSCREATIONS KZN
CC
...............................................................................................
Applicant
v
CITY OF CAPE
TOWN
...............................................................................................
First
Respondent
INDUSTRIAL POLES AND MASTS (PTY)
LTD
................................................
Second
Respondent
Court: Judge J I Cloete
Heard: 18 and 19 February 2015
Delivered: 23 March 2015
JUDGMENT
CLOETE J
Introduction
[1] The applicant (‘TK’)
was one of ten unsuccessful tenderers in a tender advertised by the
first respondent (‘the
City’) for the manufacture,
supply, delivery and offloading of galvanised steel streetlight poles
and brackets, with an estimated
value of R10 million per annum
(excluding VAT) over a period of three years. The second respondent
(‘IPM’) was the
only successful tenderer.
[2] TK does not seek to impugn the
City’s decision to reject its own tender bid. Instead it asks
for orders: (a) reviewing
and setting aside the City’s decision
to award the tender to IPM; (b) declaring a particular clause in the
tender bid document,
namely clause 4, ambiguous and misleading; and
(c) directing the City to revise the offending clause and to commence
the tender
process de novo. Both the City and IPM oppose the relief
sought.
Locus standi
[3] In its papers TK made no attempt to
set out the basis for its locus standi. Similarly this issue was not
raised or addressed
in the answering affidavits of the City or IPM.
The furthest that the City went was to note that TK did not seek to
have the decision
to reject its own tender bid reviewed and set
aside.
[4] The issue of locus standi was
raised for the first time in the heads of argument filed on the
City’s behalf. Nevertheless,
the parties approached the matter
on the basis that this was an important issue, given that it impacts
on the very relief which
TK seeks, and it was dealt with on that
basis.
[5] Counsel for TK submitted that its
locus standi stems from the premise that if the relief which it seeks
is granted, then it
will “automatically” follow that TK
will get a second bite at the cherry because the entire tender
process will have
to commence de novo. To this extent – I use
my own words – the domino effect which TK’s success will
have will
cloak it with the standing to have launched the review
application in the first place. Both the City and IPM disagree.
Before dealing
with their arguments, it is convenient to refer to
some of the relevant authorities.
[6] In Jacobs en ʼn Ander v Waks en
Andere
[1991] ZASCA 152
;
1992 (1) SA 521
(AD) at 533J – 534E the then Appellate
Division formulated the test for locus standi as follows:
‘In die algemeen beteken die
vereiste van locus standi dat iemand wat aanspraak maak op regshulp ʼn
voldoende belang moet
hê by die onderwerp van die geding om die
hof te laat oordeel dat sy eis in behandeling geneem behoort te word.
Dit is nie
ʼn tegniese begrip met vas omlynde grense nie. Die
gebruiklikste manier waarop die vereiste beskryf word, is om te sê
dat ʼn eiser of applikant ʼn direkte belang by die
aangevraagde regshulp moet hê (dit moet nie te ver verwyderd
wees nie); andersins word daar ook gesê, na gelang van die
samehang van die feite, dat daar ʼn werklike belang moet wees
(nie abstrak of akademies nie), of dat dit ʼn teenswoordige
belang moet wees (nie hipoteties nie) – sien, in die algemeen
Cabinet of the Transitional Government for the Territory of South
West Africa v Eins
1988 (3) SA 369
(A) op 387J-388H, 398I-390A, en
die vorige beslissings wat daar bespreek word (sommige waarvan
hieronder genoem sal word). In die
omstandighede van die huidige saak
is dit veral die vereiste van ʼn direkte belang wat op die
voorgrond staan. Wat dit betref,
is die beoordeling van die vraag of
ʼn litigant se belang by die geding kwalifiseer as ʼn direkte
belang, dan wel of dit
te ver verwyderd is, altyd afhanklik van die
besondere feite van elke afsonderlike geval, en geen vaste of
algemeen geldende reels
kan neergelê word vir die beantwoording
van die vraag nie (sien bv Dalrymple and Others v Colonial Treasurer
1910 TS 372
per Wessels R op 390 in fine, en vgl Director of
Education, Transvaal v McCagie and Others
1918 AD 616
per Juta Wn AR
op 627). Vorige beslissings kan behulpsame algemene riglyne vir
bepaalde soort gevalle aandui, maar meestal het
dit weinig nut om die
besondere feite van een geval te vergelyk met dié van ʼn
ander.’
[7] In Kolbatschenko v King NO and
Another
2001 (4) SA 336
(C) at 346G-H a full court of this division,
following Jacobs supra held that:
‘What is required, then, is that
(a) the applicant for relief must have
an adequate interest (“voldoende belang”) in the
subject-matter of the litigation,
which is not a technical concept;
it is usually described as a direct interest in the relief sought;
(b) it must not be too far removed;
(c) it must be actual, not abstract or
academic;
(d) it must be a current interest, and
not a hypothetical one.
Whether these requirements are met in
any particular case will depend on the facts, and no hard-and-fast or
generally binding rules
can be laid down.’
[8] The right to fair administrative
action is contained in the Bill of Rights, specifically s 33(1) of
the Constitution. S 33(1)
stipulates that everyone has the right to
administrative action that is lawful, reasonable, and procedurally
fair. S 38 of the
Constitution deals with the enforcement of rights,
and sets out the classes of persons who are entitled to approach a
court for
this purpose. The only class relevant in the present matter
is contained in s 38(a), being ‘anyone acting in their own
interest’.
Hoexter Administrative Law in South Africa 2nd Ed at
494 – 495 expresses the following view:
‘s 38(a) apparently states the
position at common law. However, it seems clear that this provision
also goes somewhat beyond
the common law, since the type of interest
required by it is certainly less stringent than the “sufficient,
personal and
direct” interest demanded at common law. In
particular, a majority of the Constitutional Court took the view in
Ferreira
v Levin NO
[1996 (1) SA 984
(CC)] that it is enough if the
complainant is affected directly by the conduct complained of, and
that he or she need not necessarily
be affected personally as well.
Nevertheless, the cases decided in terms of the common law have not
entirely lost their relevance.
They will continue to apply in
non-constitutional matters – at least until the
non-constitutional law is brought into line
with constitutional law.
Furthermore, interpretations of the common-law interest may well
influence the meaning of “own interest”
under the
Constitution.’
[9] S 3(1) of the Promotion of
Administrative Justice Act 3 of 2000 (PAJA) provides that
administrative action which materially
and adversely affects the
rights or legitimate expectations of any person must be procedurally
fair. S 6(1) stipulates that any
person may institute proceedings in
a court or a tribunal for the judicial review of an administrative
action. The definition of
‘administrative action’ in s 1
of PAJA refers to a decision taken (or not taken) ‘which
adversely affects the
rights of any person and which has a direct,
external legal effect’ subject to the exclusions set out
therein which are not
relevant for present purposes.
[10] In Democratic Alliance and Others
v Acting National Director of Public Prosecutions and Others
2012 (3)
SA 486
(SCA) the Supreme Court of Appeal dealt with the approach to
the determination of locus standi on the particular facts before it
as follows at paras [45] – [46]:
‘[45] It is of fundamental
importance to our democracy that an institution such as the NPA,
which is integral to the rule
of law, act in a manner consistent with
constitutional prescripts and within its powers, as set out in the
National Prosecuting Authority Act 32 of 1998
. Certainly the
membership of the DA can rightly be expected to hold the party they
support to the foundational values espoused
in the DA’s
constitution and to expect the DA to do whatever is in its power,
including litigating, to foster and promote
the rule of law. In this
regard see Justice Alliance of South Africa and Others v President of
the Republic of South Africa and
Others
2011 (5) SA 388
(CC) para 17;
and the recent decision of the full court in Bio Energy Afrika Free
State (Edms) Bpk v Freedom Front Plus
2012 (2) SA 88
(FB) paras
15-17. It clearly is in the public interest that the issues raised in
the review application be adjudicated and, in
my view, on the papers
before us, it cannot seriously be contended that the DA is not
acting, genuinely and in good faith, in the
public interest. See
Freedom Under Law v Acting Chairperson: Judicial Service Commission,
and Others
2011 (3) SA 549
(SCA) para 21. The question whether, in
making the decision to continue the prosecution of Mr Zuma, the NPA
had acted in accordance
with the law or had wrongly and unlawfully
succumbed to political power and influence, as alleged by the DA, is
a matter for decision
in the review application after all the papers
have been filed. Presently, it follows that the DA has standing to
act in its own
interests, as well as in the public interest, and is
entitled to pursue that application to its conclusion.
[46] Not so with the parties seeking to
intervene. It is difficult to discern with any degree of precision,
or at all, the ambit
of their complaint against Mr Zuma. It is even
more difficult to establish that a complaint, however vague, was
lodged with the
NPA itself. We were not pointed to any part of the
record from which it appears which of the two parties seeking to
intervene had
in fact lodged a complaint with the NPA. There is much
force in the submission that, having regard to the litigation between
CCII,
which was a bidding party, and government agencies and the
subsequent monetary settlement, the basis of which has not been
disclosed,
it cannot be said that there is any protectable interest
that CCII could advance in the review application. The motivation for
entering the fray is in my view clear from what is stated by Mr Young
himself, namely, that which, in modern terminology, is referred
to as
a “fall-back position” – in the event of the DA
being held not to have locus standi. In my view the conclusion
of the
court below in respect of the standing of the parties seeking to
intervene is correct. It follows that the application to
intervene
must fail.’
[11] The question which thus arises is
whether TK has any protectable interest which it could advance in
these proceedings. TK seeks
only to assail: (a) the award of the
tender to IPM; and (b) clause 4 of the tender specification, which is
alleged to be ‘ambiguous
and misleading’. The sole ground
on which the specification is criticised is the failure by the City
to specify pole section
sizes.
[12] At the risk of repetition, TK has
not challenged the City’s rejection of its own bid, despite a
substantial portion of
its papers and the argument advanced on its
behalf being devoted to why its bid should not have been rejected.
TK’s complaints
in this regard are irrelevant to the relief
which it seeks.
[13] The City argues that, as an
unsuccessful tenderer who has not challenged the rejection of its own
bid, TK has effectively placed
itself out of the running in respect
of the award of the tender to IPM. From this perspective, even were
the award to IPM to be
set aside, TK would be in no better position,
unless the court were to order the City to commence the entire tender
process de
novo. However, the sole premise upon which TK seeks an
order that the process commence de novo is a finding that one clause
in
the entire tender document is ambiguous and misleading, namely the
failure to specify pole section sizes. In this regard, it is
significant that TK’s tender bid was not declared
non-responsive because of a failure to comply with clause 4 relating
to
section sizes. It was declared non-responsive for different
reasons, namely that:
13.1 its calculations supporting its
pole design were wrong;
13.2 the structural engineer’s
professional indemnity insurance certificate was not provided (during
argument TK’s counsel
conceded that this was a crucial omission
on its part);
13.3 the galvaniser’s permit was
not provided;
13.4 it failed to complete certain
manufacturer’s technical particulars and equipment guarantees;
and
13.5 it failed to complete the
statement of compliance in the tender document.
[14] The City thus contends that TK has
no locus standi for the relief which it seeks. Although it was
“adversely affected”
and aggrieved by the award of the
tender to IPM, it is in reality in no different position to any other
member of the public who
is disgruntled by that award, including all
of the other unsuccessful tenderers who similarly have not challenged
the rejection
of their respective bids. The same applies to the
declaratory relief sought, for the reason that TK’s bid was in
any event
not rejected for failure to comply with clause 4 of the
tender bid document.
[15] It is not in dispute that
prospective bidders were at liberty to quote for as many items listed
in the price schedule as they
wished. In other words, they were not
obliged to quote on all of the items for which the tender was
advertised, being heavy duty
streetlight poles; light duty
streetlight poles; various types of adaptors, arms and accessories; a
range of double streetlight
and island arches; and various access
opening cover plates. TK only bid for heavy and light duty
streetlight poles and certain
types of adaptors.
[16] The City thus argues that, even in
the event of the court setting aside the award to IPM and/or finding
that TK’s complaint
regarding clause 4 is well-founded, the
City would not necessarily have to re-run the entire tender process.
The City’s decision-makers
are best placed to make this call
(Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC)). Of course, it is possible that the City
might decide to do so, but bearing in mind its constitutional
obligation to manage
its resources properly, it might not. Indeed,
there is nothing on the papers to suggest that it will follow as an
automatic consequence
that the City will re-run the entire tender
process from scratch; or even that this would be the appropriate
course for the court
to order it to follow.
[17] IPM supports the City’s
submissions and referred the court to Fidelity Security Services
(Pty) Ltd v Mogale City Local
Municipality and Others (handed down by
Vermeulen AJ on 17 December 2014, case no 14/14936 GPJHC). At para
[42] the court, referring
to a preceding judgment of the Supreme
Court of Appeal between the same parties, held as follows:
‘[42] In paragraphs 9, 20, 31, 46
and 51.4 of the answering affidavit of the Municipality, the deponent
is at pains to point
out that the SCA did not, in its judgment, hold
that the Second Respondent is disqualified from being considered for
the award
of the contract. This observation is, of course, correct as
far as it goes. The SCA did not have to say this because the
lawfulness
of the Second Respondent’s disqualification was not
an issue before it. It was merely part of the broader factual matrix
of the appeal which fell to be determined by it. The fact of the
matter is that it was not necessary for the SCA to hold that the
Second Respondent is disqualified; the Municipality had itself made
this decision when the Fourth Respondent, during March 2012,
accepted
the BEC’s recommendation that the Second Respondent be
disqualified. There is no warrant for inferring from the
fact that
the SCA’s order is silent about the matter and contains an
order for the re-evaluation of the bids, that therefore
the committee
was at large to overrule or ignore the municipal manager’s
decision that the Second Respondent be disqualified;
a decision
arrived at on the committee’s own findings and recommendation.
When the SCA ordered that the bids be re-evaluated,
that was meant,
in my respectful view, as a reference to remaining extant bids that
had not been disqualified. The SCA’s
judgment cannot be
understood as meaning that the bids of all original tenderers,
including those who were disqualified by the
Municipality because of
improper conduct, fell to be re-evaluated…’
[18] Although there is no suggestion of
misconduct on TK’s part, the passage quoted from the
abovementioned judgment, applied
to the facts of the present matter,
supports the argument that TK has no locus standi.
[19] Having regard to the aforegoing,
it is my view that TK lacks the necessary standing to ask for the
relief sought. However,
on the assumption that I am wrong, it is
necessary to consider the merits of TK’s complaints in respect
of the award to IPM
and the failure by the City to specify pole
section sizes, which TK refers to as ‘the design ambiguity’.
The award of the tender to IPM
[20] TK attacks the award of the tender
to IPM on four grounds, namely: (a) non-compliance with clause 3.2 of
the tender specification;
(b) its steel grade did not comply with
clause 3.9; (c) it failed to comply with deflections stipulated in
clause 3.11; and (d)
it failed to complete schedule 14 of the tender
bid document. A related, but in a sense independent complaint, is
that the City
deviated from the procurement process.
[21] Clause 3.2 of the tender
specification stipulates that the poles shall be designed and
manufactured in accordance with the
standards in SANS 10225 and SANS
14713-1. For present purposes the only standard under scrutiny is
that relating to the design
of the poles, which must be in accordance
with SANS 10225 – ‘the design and construction of
lighting masts’.
[22] The drawings submitted by IPM
included a note which read: ‘Designing of poles to new SANS
1022-1991’. The calculation
sheets submitted by IPM referred to
‘SABS 0225:1991 – the design and construction of lighting
masts’. TK’s
complaint is that the standard incorporated
in SANS 10225 is inconsistent with both the drawings and calculation
sheets submitted
by IPM; and that its calculations were made using an
outdated code of practice, namely SABS 0225:1991.
[23] However it is undisputed that SANS
10225 was preceded by SABS 0225; that these two standards are
identical in all material
respects; and that the former is
essentially a renumbered version of the latter.
[24] In its answering affidavit IPM
explained that the reference in its drawings to ‘new SANS
1022-1991’ was a mere
typographical error in omitting the
number “5” after “1022”.
[25] That this was the case appears
from IPM’s covering letter to the City, which states that:
‘Safety Factor of Poles
are Designed strictly according to the
new SANS 10225-1991’ [sic] as well as the certificate of its
structural engineer which
confirms that the poles ‘will be
designed to the recognised code of practice – SANS 10225: the
design and construction
of lighting masts’. Both the
aforementioned letter and certificate were included in IPM’s
bid.
[26] During argument counsel for TK
also contended that the City’s failure to obtain clarification
from IPM regarding what
she termed “a material aspect” of
the SANS code before making the tender award to it rendered the
bidding process unfair.
[27] However the City explained that at
the time of evaluating IPM’s tender bid its officials took the
view that IPM had simply
‘conflated’ the two standards.
Given that standard SANS 1022-1991 does not exist, it submits that
its officials correctly
interpreted this as being a reference to SANS
10225-1991, having regard also to the other documents included in the
bid. This approach
cannot be faulted.
[28] In any event, as previously
stated, it is common cause that there is no difference in substance
between SABS 0225:1991 and
SANS 10225. Therefore IPM’s
reference to SABS 0225:1991 as the applicable standard can hardly be
considered a material error.
TK’s complaints in this regard are
without merit and must be rejected.
[29] TK’s second complaint is
that IPM fell foul of clause 3.9 of the tender specification which
prescribes that the steel
to be used must be grade 355. The steel
used in IPM’s calculations has a strength of 300 MPa. This was
not compliant with
grade 355 which has a strength of 350 MPa.
[30] The City accepts that 350 MPa
steel is stronger than 300 MPa steel. The parties accept that 300 MPa
steel is no longer available
in the market. TK agrees that it is
therefore ‘impractical’ for the City to have accepted a
calculation based on 300
MPa steel.
[31] The City explained that IPM’s
design calculations, admittedly based on 300 MPa steel, nonetheless
delivered satisfactory
results in compliance with the tender
specifications. This was met with a bare denial by TK in reply. The
City’s explanation
must thus be accepted as correct in
accordance with the Plascon-Evans rule, given that there is nothing
to suggest that it is so
far-fetched or untenable that it falls to be
rejected on the papers as they stand.
[32] The City also explained that in
any event IPM’s design drawings confirm that the poles will be
manufactured using the
stronger grade 355 (350 MPa) steel.
[33] In its founding papers, TK limited
its complaint purely to non-compliance by IPM. It was only in reply
that TK launched two
additional attacks. These were that IPM ‘could
have an overstock of 300 MPa steel’; and that ‘in any
event’
the price of steel is directly proportionate to the
grade of steel used, and if the incorrect grade of steel is used in
the manufacture
of the poles ‘it would therefore affect the
price of the poles when tendering’. No detail was provided in
support of
these allegations. Obviously the City was not afforded the
opportunity to deal with this new matter raised for the first time in
reply. Counsel for TK however sought to enlarge on these allegations
in both her heads of argument as well as oral argument at
the
hearing. This took TK’s complaint no further, given that it had
failed to make out any such case in its founding papers.
[34] I therefore conclude that the
second complaint must similarly be rejected.
[35] TK’s third complaint relates
to what it calls ‘deflection criteria’ stipulated in
clause 3.11 of the tender
document. It contends that IPM’s pole
design does not comply with the maximum permissible deflections under
design loads
as specified for items 1B to 5B in the tender.
[36] In support of this allegation TK
annexed to its founding papers a report from its structural engineer,
Mr Rob Young. The contents
of this report were not confirmed under
oath by Mr Young and thus constitute hearsay. Mr Young only deposed
to a confirmatory affidavit
in support of TK’s replying
affidavit, in which he stated that:
‘I have read the affidavit of
RAJU CHETTY [the main deponent] and confirm its contents insofar as
they relate to Young &
Satharia [the engineering firm at which Mr
Young is employed] and myself.’
[37] However in its replying affidavit
TK: (a) without referring to any specific aspect of Mr Young’s
earlier, unconfirmed
report, made certain allegations of a technical
or expert nature of its own accord without being qualified to do so;
and (b) advanced
other criticisms which had neither been dealt with
by Mr Young in his earlier report nor in its own founding papers.
[38] In similar vein, TK’s
counsel enlarged on this inadmissible evidence in both her heads of
argument as well as oral argument.
When the inadmissibility of this
evidence was pointed out to her, she was instructed to apply for a
postponement (which she simply
moved from the Bar without any notice
to the City or IPM) in order to obtain an affidavit from Mr Young.
The City and IPM rightly
opposed this application – the
impermissible nature of the evidence had already been pointed out by
the City in its heads
of argument – and it was refused.
[39] Accordingly, TK failed to place
any admissible evidence before the court in support of this
particular complaint, and it too
falls to be rejected.
[40] The fourth complaint is that IPM
did not complete schedule 14 of the tender document, which is the
statement of compliance.
This was one of the reasons why TK’s
own bid had been rejected, and it contends that IPM’s bid
should have been evaluated
by the City on the same basis.
[41] Although this was not disclosed in
TK’s founding papers, the City pointed out in its answering
affidavit that TK had
left schedule 14 completely blank. On the other
hand IPM, while not specifically placing a mark next to the word
“yes”
in the document to confirm compliance, wrote the
following in the space provided:
‘All offers are strictly
according to your Council’s specifications, and all designs are
adequate in terms of horizontal
and vertical wind deflections.
Please refer to our design calculations
for more detail.’
[42] The City thus correctly submits
that IPM was, in effect, answering “yes” in schedule 14,
because it expressly confirmed
compliance, albeit without deleting
the “no” in the “yes/no” option. In my view
this is a clear case of
substantial compliance and the City correctly
did not adopt an overly formalistic or technical approach. In any
event, it is fallacious
for TK to contend that its “response”
and IPM’s response to schedule 14 are comparable.
[43] It follows that this complaint
must also be rejected.
[44] TK’s last complaint
pertaining to IPM is that the City deviated from the tender process
by making a further award to
IPM, not included in the original
tender, for additional lettering on the steel pole covers in the
amount of R100 per cover (excl.
VAT). It is common cause that this
award was made in terms of clause 308.5 of the City’s Supply
Chain Management Policy (SCMP)
which provides that:
‘308. The City Manager may
dispense with the official procurement processes established by this
Policy, and procure any required
goods or services through any
convenient process, which may include direct negotiation, but only in
respect of: …
308.5 any other exceptional
circumstances where it is impractical or impossible to follow the
official procurement process.’
[45] The closing date for tender bids
was 7 April 2014. TK alleges that the first indication that the
City’s Bid Evaluation
Committee (BEC) considered making the
further award is contained in its report to the Bid Adjudication
Committee (BAC) dated 17
July 2014, in which the BEC also recommended
that the original tender be awarded to IPM. At the foot of p 3 of
that report the
following appears:
‘For decision by the Accounting
Officer:
2.2 It is recommended that the official
procurement process established and adopted BE DISPENSED with in
terms of clauses 308 of
the Supply Chain Management Policy,
sub-clause 5 for the additional lettering on the steel pole covers.
2.3 It is recommended that Industrial
Poles and Masts (Pty) Ltd BE APPOINTED to render the service for the
additional lettering
on the steel pole covers in the amount of
R100,00 per steel pole cover [exclusive of VAT] for the period from
date of commencement
until 2017/06/30. [See discussion]’
[46] On p 10 of the report, under
‘Discussion’ the following is recorded:
‘Deviation for the additional
lettering on the steel pole covers:
A technical oversight caused the
omission from the specification stipulating the steel pole access
cover of the street light pole
to be stamped “PROPERTY OF THE
CITY OF CAPE TOWN”. The only responsive tenderer was requested
to provide a quotation
for the additional requirements required in
terms of the specification of the street light pole [Refer to
Annexure C].’
[47] Annexure C is the quotation
submitted by IPM for the lettering. On 19 August 2014 the City’s
Executive Director, Dr Gisela
Kaiser, supported the recommendation in
respect of the further award and commented that:
‘Given high incidence of
vandalism, critical that infrastructure is marked with City of Cape
Town.’
[48] In the BAC’s recommendation
to the City Manager of 28 July 2014 the following appears:
‘SUPPLY CHAIN MANAGEMENT BID
ADJUDICATION COMMITTEE RECOMMENDATION TO THE CITY MANAGER: 28 JULY
2014
SCMB 51/07/14 REQUEST FOR DEVIATION:
TENDER NO. 239G/2013/14: MANUFACTURE, SUPPLY, DELIVERY AND
OFF-LOADING OF GALVANISED STEEL
STREETLIGHT POLES AND BRACKETS
In response to questions raised
regarding the non-responsive submissions, the official explained that
the requirement of a Structural
Engineer’s Professional
Indemnity Insurance Certificate was extremely important for this
tender.
The official was requested to obtain
the signature of the relevant Executive Director on the report for
the deviation portion of
the recommendation.
RESOLVED that for the reasons set out
in the report the tender offer submitted by Industrial Poles and
Masts (Pty) Ltd for Tender
No. 239G/2013/14: Manufacture, supply,
delivery and off-loading of galvanised steel streetlight poles and
brackets, be accepted
from date of commencement until 30 June 2017,
as follows…
[and later]
RECOMMENDED TO THE CITY MANAGER that
for the reasons set out in the report authority be granted for a
deviation from the Supply
Chain Management procedures, as allowed for
in Clause 308.5 of the CCT’s Supply Chain Management Policy to:
(a) appoint Industrial Poles and Masts
(Pty) Ltd to render the service for the additional lettering on the
steel pole covers in
the amount of R100.00 (excl. VAT) per steel pole
cover, from date of commencement of contract until 30 June 2017.
RESOLVED that subject to the above:
(b) the appointment of Industrial Poles
and Masts (Pty) Ltd to render the service for the additional
lettering on the steel pole
covers in the amount of R100.00 (excl.
VAT) per steel pole cover, from date of commencement of contract
until 30 June 2017, be
approved.’
[emphasis supplied. The BAC
recommendation is annexure TK19.]
[49] In its founding papers TK sought
to extrapolate the above into the following:
‘
In its request for deviation the BAC
deals with the deviation and indicates in its report that it was
explained in response to questions
regarding non-responsive
submission that the structural engineer’s professional
indemnity insurance certificate was extremely
important. As a result
it was agreed, Annexure “TK19” hereto.
Quite clearly this cannot be the case.
The professional indemnity certificate
could never be the most important thing in order to allow for the
only responsive bidder
to bid bearing in mind that there were other
tenderers who also had produced the professional indemnity
certificate.
In any event there was no exceptional
circumstances, in which the deviation as approved ought to be
allowed.’
[50] However on a plain reading of the
BAC recommendation, its comments relating to the structural
engineer’s professional
indemnity insurance certificate
pertained only to the bids which had been declared non-responsive.
They did not relate to the deviation
request which was dealt with
separately. Furthermore, the recommendation to the City Manager for
the deviation clearly stated that
it was ‘for the reasons set
out in the report’. The “report” is obviously the
report of the BEC which had
set out those reasons, together with
those for declaring the other bids for the original tender
non-responsive. Nowhere in BAC’s
recommendation does one find
any separate or further reasons.
[51] In any event the uncontroverted
evidence of the City is that, due to an increasing and serious
problem of theft of steel pole
access covers, it requires them to be
stamped as its property in certain geographical areas. Its pricing
schedule reflects that,
at most, an anticipated annual quantity of
1100 cover plates with lettering would need to be procured. This
comes to a maximum
additional amount of R110 000 per annum (excl.
VAT) in the context of an annual tender sum of R10 million per annum
(excl. VAT),
or only 1%.
[52] In the circumstances the City is
right in its submission that it would be ridiculous and impractical
to have to abandon and
re-run the entire tender process from scratch
in order to be able to make the further award. To do so would be a
gross waste of
public funds.
[53] Furthermore, as the City points
out, no other tenderers were prejudiced as a result of the deviation
because they had already
been excluded.
[54] It follows that TK’s
complaint on this ground must also be rejected.
The alleged design ambiguity
[55] It is undisputed that prospective
tenderers were furnished with a detailed tender specification,
setting out exactly how the
poles were to be manufactured, requiring
compliance with all applicable SANS standards, wind speed,
deflections, design drawings,
calculations and so forth. It is common
cause that in so doing all pole design specifications were provided
to tenderers except
for the pole section sizes.
[56] The crux of TK’s complaint
is that because pole section sizes are not specified, this gives rise
to an ‘ambiguity’
because ‘on an analysis of the
specifications it is possible to produce two or more technically
compliant design drawings
resulting in varying section sizes and pole
masses’. This in turn is alleged to ultimately affect the price
tendered by each
bidder, thus rendering the bidding process unfair
and contrary to s 217 of the Constitution.
[57] The City’s answer to this is
that, instead of causing any ambiguity (in the sense of uncertainty
or double meaning) the
very purpose of not stipulating section sizes
is to stimulate competition and ingenuity amongst prospective bidders
in order to
derive the best aesthetic but compliant designs for the
lowest price. This approach is not unfair and meets the requirements
of
s 217, namely a procurement process which is fair, equitable,
transparent, competitive and cost-effective.
[58] The City thus submits that the
omission of pole section sizes from the specification facilitates
competition on price. If only
one section size is stipulated in the
specification, each and every variable will then be prescribed, and
price competition will
be materially curtailed or altogether
eliminated. Put differently, the City must have some scope within the
specification itself
to facilitate competitive bidding. It is
undisputed that TK and IPM both produced technically compliant pole
designs. However,
as a result their designs were priced differently,
with IPM’s design being the less expensive of the two.
[59] TK has adduced no evidence that
the specification is ambiguous in the sense of being capable of more
than one possible meaning
or interpretation. On the contrary, the
pole section size is left unspecified and therefore open for
tenderers to select to best
commercial advantage. TK has also adduced
no evidence that as a result of the failure to prescribe section
sizes it was uncertain
or confused as to how to complete the tender
documents for this specific tender. As a fact it understood and
complied with the
tender specification. It selected pole section
sizes within its discretion, as it was entitled to do, and submitted
its tender
accordingly. There is also no evidence, or even an
allegation, that TK – or indeed anyone else – was
‘misled’
by the specification. The high water mark of its
complaint during the internal appeal process was that ‘It is
possible that
the specification may have been ambiguous and
interpreted differently by different structural engineers’. No
details were
provided. In fact, TK does not explain what, if
anything, it would have done differently had pole section sizes
indeed been prescribed.
[60] In summary, TK was unable to
produce a shred of evidence to counter the City’s response to
this complaint. In these circumstances,
it is appropriate to refer to
what was held in an earlier judgment of the Supreme Court of Appeal
in Bato Star
[2003 (6) SA 407
(SCA)] at para [53]:
‘[53] Judicial deference is
particularly appropriate where the subject-matter of an
administrative action is very technical
or of a kind in which a Court
has no particular proficiency. We cannot even pretend to have the
skills and access to knowledge
that is available to the Chief
Director. It is not our task to better his allocations, unless we
should conclude that his decision
cannot be sustained on rational
grounds. That I cannot say.’
[61] I thus conclude that this
complaint must also be rejected.
[62] In the result the following order
is made:
‘The application is dismissed
with costs, including all reserved costs orders as well as the
reasonable travelling and accommodation
costs of the legal
representatives of the second respondent.’
J I CLOETE