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[2015] ZAWCHC 108
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Envitech Solutions (Pty) Limited v Saldanha Bay Municipality and Another (111275/2014) [2015] ZAWCHC 108 (13 August 2015)
REPUBLIC OF SOUTH ARICA
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE DIVISION,
CAPE TOWN)
Case No: 111275/2014
DATE: 13 AUGUST 2015
In the matter between:
ENVITECH SOLUTIONS (PTY)
LIMITED
.........................................................................
Applicant
Registration number 2006/012159/07
And
SALDANHA BAY
MUNICIPALITY
..........................................................................
First
Respondent
AECOM
SA
...............................................................................................................
Second
Respondent
JUDGMENT
DELIVERED ON 13 AUGUST 2015
RILEY, AJ
[1] The applicant, Envitech Solutions
(Pty) Ltd, seeks an order in the following terms:
1. Reviewing and setting aside the
first respondent’s (the Saldanha Bay Municipality) decision
that Envitech’s bid for
Tender 86/2013 Professional Engineering
Services of the development of Langebaan Waste Facility (‘the
tender’) did
not qualify to be considered;
2. Reviewing and setting aside the
first respondent’s allocation of the tender to the second
respondent (‘AECOM’);
and
3. Setting aside the contract concluded
between the Municipality and AECOM in respect of the tender.
[2] The services in respect of which
the first respondent has requested tenders are professional
engineering and related services,
relating to the Langebaan landfill
site. It is not in dispute that at the time of the tender the then
Langebaan landfill site
was rated as one of the worst in the Western
Cape in a survey carried out by Afriforum. The tender was issued as
one of the steps
towards addressing the situation.
[3] It is further not in dispute that
the end product of the services tendered for is the design of the
rehabilitation and closure
measures of the existing permitted
landfill site for Langebaan and the removal of the second unpermitted
landfill site and the
rehabilitation thereof. It also entails the
design and construction supervision of a transfer station at the
permitted site and
if necessary a material recycling facility.
[4] The scope of works is set out in
Part C3 of the tender document. It is unnecessary to repeat Part 3
of the tender document
at this stage save to state that the services
tendered for are described as integrated and interrelated and include
attending to
regulatory compliance issues, the preliminary and
detailed design of the rehabilitation and closure measures of the
existing landfill
site, preparing a detailed design of the transfer
station which can be put out to tender and monitoring the
construction of the
rehabilitation measures of the landfill site and
transfer station by the successful bidder for the construction
contract.
[5] According to the evidence, the
services to be rendered build on each other and start with
preliminary assessments, progress
through a preliminary or basic
design phase and would culminate, after the detailed design and
procurement of a contractor, with
the issue of a completion
certificate for the new landfill site on behalf of the first
respondent
[6] At the time that second respondent
had prepared their answering affidavit on 18 August 2014, it was of
the view that the contract
between the first respondent and itself
would have been in place for some ten months and second respondent
would have made considerable
progress in rendering the services
contracted for, in particular the investigation into the size of the
unofficial landfill site
and the report on the rehabilitation
measures to be put in place, the compilation of a report on the
status quo of the existing
permitted landfill, the licence
application to the Department of Environmental Affairs and
Development Planning to close the existing
landfill and the
compilation of the Integrated Waste Management Plan for approval by
the first respondent.
[7] I am satisfied that by the time the
application was heard that second respondent will have made
considerable progress in providing
the services contemplated in the
tender.
[8] Both respondents oppose the review.
In the main it was contended on behalf of both the first and second
respondents that this
court is precluded from determining this
application as the applicant has failed to utilise any of the
internal remedies available
to it, and, secondly, that there were no
irregularities in the process, alternatively, any irregularity was
immaterial, could not
and did not affect the outcome of the process
and as such does not constitute a ground for review in terms of the
Promotion of
Administrative Justice Act 3 of 2000 (‘PAJA’).
[9] It is necessary to mention at this
stage that the issue of the tender, the disqualification of the
applicant at the quality
stage and the award of the tender to second
respondent is essentially common cause. These common cause facts and
issues which
are not in dispute are appropriately summarised in the
heads of argument of the first respondent and for the sake of
convenience
I shall take the liberty of referring extensively to
them. In this regard I readily acknowledge that most of what appears
in regard
to the common cause and or undisputed facts was practically
taken verbatim from the heads of argument.
[10] On 10 October 2013, the first
respondent placed an advertisement inviting tenders for the provision
of the services hereinbefore
referred to.
[11] On 24 October 2013 a
representative of applicant, a certain Mr G Friedberg, attended an
information session held at the Council
Chambers of first respondent
at which meeting the services and the manner in which any bid or
tender would be evaluated were discussed
in quite some detail.
[12] The tender procedure adopted by
the applicant was the so-called ‘Two Envelope System’ as
provided for by the first
respondent’s Supply Chain Management
Policy (“the policy”) in terms whereof the technical
proposal of a bidder
would first be considered. The financial
proposal of the bidder would be submitted in a separate envelope
which would only be
opened and considered once the technical proposal
had been evaluated and awarded a certain minimum score.
[13] Subsequent to the information
meeting, the applicant timeously submitted its technical proposal or
bid as well as its financial
proposal in a second sealed envelope to
the first respondent.
[14] The scope of the proposal was not
only discussed at the information session held on 15 October 2013,
but is also set out in
Part C3 of the proposal and or tender
documents.
[15] The manner in which the proposal
would be evaluated by the first respondent, as well as the minimum
score that had to be obtained
in order for the financial proposal of
the applicant to be opened, is set out in clauses F.3.5.2 and
F.3.11.3 of the proposal.
[16] The proposal was duly evaluated by
the Bid Evaluation Committee (“the BEC”), in particular
by Ms Rene Toesie (‘Toesie’),
Gavin Williams (‘Williams’)
and Malcolm Jagers (‘Jagers’), all of whom completed
evaluation forms, the
form and contents of which are not in dispute.
[17] The BEC, as represented by Mr C
Carelse, submitted its report dated 4 February 2014 regarding the
evaluation of the technical
proposals of all the tenders including
its evaluation of the proposal, to the Bid Adjudication Committee of
the first respondent
(“the BAC”).
[18] In such report the BEC advised the
BAC that the average score awarded to the proposal of the applicant
by the BEC was less
than seventy points and that applicant did not
qualify for the consideration of its financial proposal.
[19] On 4 February 2014 the BAC
accepted the recommendation of the BEC and determined that the
financial proposal of the applicant
which was contained in a second
sealed envelope be returned to it.
[20] On 11 February 2014, the first
respondent advised applicant by email that it did not qualify to have
its second envelope opened.
[21] The applicant, by way of email on
12 February 2014, enquired as to the reasons why it did not qualify
as such for the purposes
of ‘its quality management system’.
The first respondent did not respond to such email whereupon the
applicant sought
the required information from the first respondent
in terms of PAJA as it intended to proceed with a review application.
[22] The first respondent responded to
such request by way of a letter from its Municipal Manager dated 27
March 2014, to which
it annexed all relevant documentation.
[23] The applicant never objected to or
appealed against any of the decisions or actions of the first
respondent within twenty-one
calendar days of either 11 February 2014
or 14 March 2014, but simply instituted the review proceedings.
[24] On a consideration of the
pleadings it is clear that very few of the objective facts relevant
and material to this matter are
truly in dispute and that the factual
disputes between the parties relate more to the interpretation of
certain documentation and
the application of the undisputed facts as
will appear in more detail hereinafter. Accordingly I shall approach
the matter on
the basis that where there is a dispute as to the
facts a final order may be granted if the facts as stated by the
respondent
together with the facts averred in the applicants
affidavits which have been admitted by the respondent justify such an
order.
Accordingly where it is clear that facts, though not formally
admitted, cannot be denied, they must be viewed as admitted. See
Plascon Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
[1984] 2 All
SA 366(A)
367 – 368; 1984(3) SA 623(A) 634E – 635D. It
follows therefore that any remaining factual disputes must be
resolved
in favour of the respondents.
The in limine point
[25] In the present matter the parties
are agreed that the applicant failed to appeal against the decision
of the first respondent
not to approve the tender. It is common
cause that first respondent adopted the supply chain management
policy as it was required
to in terms of Section 111 of the Local
Government: Municipal Finance Management Act, 56 of 2003 (‘the
MFMA’). It
is not disputed that the current policy complies
with the regulations promulgated by the Minister of Finance in terms
of Section
168 of the MFMA. The said policy is also published on the
website of the first respondent.
[26] Section 46 of the policy provides
that any person aggrieved by the decisions or actions taken in the
implementation of the
policy may, within fourteen days of the
decision or the action, lodge a written objection or complaint
against the decision or
action. It is clear that the purpose of this
provision is to enable the first respondent to informally, quickly
and cost effectively
investigate and deal with any concerns regarding
a decision taken by it.
[27] Section 29(9) of the policy
further determines that a person whose rights are affected by a
decision taken by the first respondent
in terms of delegated
authority in the implementation of its supply chain management
system, may appeal against that decision by
giving written notice of
the appeal and the reasons or grounds thereof to the Municipal
Manager within twenty-one days of the date
of receipt of the
notification of the offending decision.
[28] Section 29(9) of the policy also
determines that no bid would be formally accepted until either the
expiry of the twenty-one
day appeal period or confirmation in writing
before the expiry of the twenty-one day appeal period that none of
the affected parties
intended to note an appeal, or confirmation of
the satisfactory resolution of any appeals.
[29] The applicant was notified that
its bid or tender did not progress to the second stage of the tender
process on 11 February
2014, and on 14 March 2014 the BAC of first
respondent awarded the tender to second respondent which appointment
was conditional
upon the twenty-one day period referred to above
expiring.
[30] The applicant failed to utilise
its right of appeal against any of the aforementioned decisions or
actions by the first respondent
within fourteen or twenty-one
calendar days of either 11 February 2014 or 14 March 2014.
[31] Subsection 7(2) of PAJA provides
that:
(a) Subject to paragraph (c), no court
or tribunal shall review an administration action in terms of this
Act unless any internal
remedy provided for in any other law has
first been exhausted.
(b) Subject to paragraph (c), a court
or tribunal must, if it is not satisfied that any internal remedy
referred to in paragraph
(a) has been exhausted, direct that the
person concerned must first exhaust such remedy before instituting
proceedings in a court
or tribunal for judicial review in terms of
this Act.
(c) A court or tribunal may in
exceptional circumstances and on application by the person concerned,
exempt such person from the
obligation to exhaust any internal remedy
if the court or tribunal deems it in the interest of justice. (my
emphasis)
[32] According to Cora Hexter;
Administrative Law in South Africa (at p. 478 – 482) the
provisions as set out in section 7(2)
of PAJA are stringent and are
cast in peremptory language. It is commonly accepted that review is
prohibited unless any internal
remedy provided for in any other law
has been exhausted. Accordingly the court is obliged to turn the
applicant away if it is
not satisfied that internal remedies have
been exhausted and may grant exemption from the duty only in
exceptional circumstances
where it is in the interest of justice to
do so.
[33] The presence of exceptional
circumstances was interpreted by a unanimous SCA in Nichol and Others
v Registrar of Pension Funds
and Others
[2006] 1 All SA 589
(SCA) at
para 16 to mean that the circumstances must ‘be such as to
require the immediate intervention of the courts rather
than resort
to the applicable internal remedy’. See also Koyabe v Minister
of Home Affairs and Others (Lawyers for Human
Rights as Amicus
Curiae) 2010(4) SA 327 (CC) at [34] to [40].
[34] In the present matter the
applicant has failed to make a single allegation in its founding
papers that could support the granting
of any relief in terms of
Section 7(2)(c) of PAJA. It appears to seek to remedy this
deficiency by alleging in its replying papers
that:
1. In terms of Section 46 of the
policy, it had a discretion whether or not to lodge a written
objection or complaint against any
decision made or action taken by
first respondent in implementing the policy;
2. The internal remedy afforded by
Section 46 of the policy did not preclude the applicant from
approaching the court;
3. It was never advised of the appeal
procedure.
[35] As stated, section 46 of the
policy provides that ‘persons aggrieved by decisions or actions
taken in the implementation
of this supply chain management system,
may lodge within fourteen days of the decision or action, a written
objection or complaint
against the decision or action’.
Section 47(6) provides that ‘this paragraph must not be read as
affecting a person’s
rights to approach a court at any time’.
[36] It is trite law that in motion
proceedings the affidavits serve not only to place evidence before
the court but also to define
the issues between the parties. In
Swissborough Diamond Mines v Government of the RSA and Others 1999(2)
SA 279 (TPD) at 323G
Joffe J held that the need to identify the
issues is not only for the benefit of the court but also and
primarily for the parties,
who must know the case that must be met
and in respect of which they must adduce evidence in the affidavits.
The learned judge
held further at p323 j-324A that an applicant must
accordingly raise the issues upon which it would seek to rely in the
founding
affidavit. It must do so by defining the relevant issues
and by setting out the evidence upon which it relies to discharge the
onus of proof resting on it in respect thereof.
[37] In my view the applicant must have
been aware that it was precluded from making out a case in reply and
must have been aware
of the aspects referred to in paragraph 34
hereinbefore when it prepared its founding papers. See Shakot
Investments (Pty) Ltd
v Town Council of the Borough of Stanger
1976(2) SA 701(D) at 705 A – B and Finishing Touch 163 (Pty)
Ltd v BHP Billiton
Energy Coal SA Ltd and Others 2013(2) SA 204 (SCA)
at [26]. I am fortified in my finding as it is clear to me that the
applicant
has most extensive experience in respect of tenders and
related processes as is set out in its project experience.
[38] I turn now to deal with
applicant’s reliance on Sections 46 and 47 of the policy.
[39] I agree with Hoexter (supra) that
the term ‘internal’ and the phrase ‘any other law’
as is provided
in Section 7 of PAJA ought to be read restrictively to
include only remedies specifically provided for in the legislation
with
which the case is concerned. I further agree with the view that
it would also be both unrealistic and unjustifiable to expect an
aggrieved individual to pursue every possible avenue provided for by
the law, before approaching the court for relief. See Reed
and
Others v Master of the High Court and Others
[2005] 2 All SA 429(E)
para 20. What is however clear, is that Section 7(2) of PAJA has to
be read in the light of the statutory requirement that applications
for review must be made within six months. It is also accepted law
that the six month period begins to run only when the internal
remedies have been exhausted. (See Section 7)(i)).
[40] On careful consideration and
analysis of Section 46 as read with Section 47 of the policy I am
satisfied that the remedy provided
therein is but one of the internal
remedies provided for by the policy. In my view it was clearly not
designed to trump the clear
provisions of PAJA. As I have stated, it
is at best a general remedy aimed at achieving the quick and
inexpensive resolution of
any dispute by allowing a party to lodge a
written objection or complaint against any decision or action. It
clearly does not
amount to an appeal as envisaged by the policy.
[41] On a proper interpretation of
Section 47(6) of the policy, I am satisfied that it clearly only
relates to the provisions of
Section 46 and 47 thereof. It therefore
follows that it is of no consequence to, and accordingly does not
affect the remedy referred
to in section 29 and most certainly does
not override the remedy as provided by section 29. See Bothma-Batho
Transport (EDMS)
Bpk v S Bothma & Seun Transport (EDMS) Bpk
2014(2) SA 494 (SCA) [10] – [12].
[42] Even though the applicant alleges
that it was never advised of the appeal procedure by the first
respondent, it does not allege
that it was not aware of it.The fact
of the matter is that it could never make such an allegation as the
policy is published and
as I have mentioned, applicant must have been
aware of it due to its extensive experience in this sphere and it
must therefore
have been aware of the provisions of Section 62 of the
Local Government; Municipal Systems Act 32 of 2000 (‘MSA’).
[43] What is fatal to the applicants
case is that it claims that it did not have to exhaust any internal
remedies, and, in addition,
it further failed to make an application
to this court for exemption as is required by Section 7(2)(c) of PAJA
by failing to set
out exceptional circumstances in its papers that
would have allowed this court to entertain the review.
[44] I agree with the submissions of Mr
Brink on behalf of the first respondent that it must therefore be so
that:
1. Applicant clearly never intended to
lodge an appeal in terms of Section 29(9) of the policy. This is
clear from the fact that
by 18 March 2014 it made it clear that it
intended to proceed with a judicial review despite the fact that it
had not yet been
furnished with the information required by it.
2. Despite not receiving a response to
the email of 12 February 2014, applicant took no further steps until
18 March 2014 when it
delivered the request in terms of PAJA to the
first respondent.
[45] Based on the aforementioned, I am
further satisfied that the applicant cannot even rely on the lapse of
the twenty-one day
period before it received the information in terms
of PAJA.
[46] I accordingly have no hesitation
in finding that the applicant failed to take any steps reasonable or
in good faith or otherwise
to exhaust the available internal
remedies.I am not persuaded that the applicant can place any reliance
on sections 46 and 47 of
the policy based on the findings I have made
hereinbefore. In my view the applicant has further failed to prove
exceptional circumstances
for its failure to utilise the remedy, and
or it has failed to advance reasons why it should be exempted from
the duty to exhaust
the internal remedies which were available to it.
[47] In the circumstances, the
applicant’s application falls to be dismissed on this basis
alone.
Legal principles
[48] Notwithstanding my finding that
applicant’s application falls to be dismissed for the reasons
hereinbefore set out, it
is necessary to consider the grounds of
review raised by the applicant.
[49] Before dealing with the grounds
for review raised by the applicant, it is necessary to refer to the
relevant legal principles
which are applicable to the issues that
require determination.
[50] In terms of Section 33(1) of the
Constitution of the Republic of South Africa 108 of 1996 (‘the
Constitution’),
everyone has the right to administrative action
that is lawful, reasonable and procedurally fair. In compliance with
section 33(3)
of the Constitution, PAJA was enacted to give effect to
the aforementioned constitutional rights. It is now accepted law
that
even though PAJA does not replace or amend Section 33 of the
Constitution, it is now the primary or default pathway to review.
See Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs
and Others 2004(4) SA 490 (CC) at [22] – [25].
[51] Section 3(1) of PAJA requires
administrative action which materially and adversely affects the
rights or legitimate expectations
of any person to be procedurally
fair, whilst Section 3(2) determines that a fair administrative
procedure depends on the circumstances
of each case. See Minister of
Environment Affairs & Tourism and Others v Bato Star Fishing
(Pty) Ltd 2003(6) SA 407 (SCA)
at [65]; SA Veterinary Council and
Another v Szymanski 2003(4) SA 42 (SCA) at [19] and [20]. In Allpay
Consolidated Investment
Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency & Others
2014(1) SA 604 (CC)
at paragraphs [41] – [42] the
constitutional court held that Section 6 of PAJA ‘gives
legislative expression to the
fundamental right to administrative
‘action that is lawful, reasonable and procedurally fair’
under section 33 of the
Constitution. It is a long-held principle of
our administrative law that the primary focus in scrutinising
administrative action
is on the fairness of the process, not the
substantive correctness of the outcome’.
[52] The court held further at [28]
that, ‘The proper approach is to establish, factually whether
an irregularity occurred.
Then the irregularity must be legally
evaluated to determine whether it amounts to a ground of review under
PAJA’. It is
clear that the primary focus of the legal
evaluation is to scrutinize the fairness of the process and not the
substantive correctness
of the outcome thereof. Where appropriate,
it will be necessary to take into account the materiality of any
deviance from legal
requirements by linking the question of
compliance to the purpose of the provision, before concluding that a
review ground under
PAJA has been established.
[53] It is further clear that
compliance with the requirements for a valid tender process, issued
in accordance with the constitutional
and legislative procurement
framework, is legally required.
[54] It is accepted law that this does
not mean that administrators may never depart from the system put in
place or that deviations
will necessary result in procedural
unfairness. Where, however, administrators depart from procedures,
the basis for doing so
will have to be reasonable and justifiable and
the process of change must be procedurally fair as assessed against
the norms of
procedural fairness as stipulated in PAJA. See Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive
Officer, South African Social Security Agency and Others
(supra) at [34] – [40].
[55] In challenging the validity of
administrative action, an aggrieved party may rely on any number of
alleged irregularities in
the administrative process.These alleged
irregularities are presented as evidence to establish that any one or
more of the grounds
of review under Section 6 of PAJA may exist.It is
unnecessary to repeat the specific grounds of review as set out in
Section 6.
[56] What is more important is that the
judicial task through PAJA is to assess whether this evidence
justifies the conclusion that
any one or more of the review grounds
do in fact exist.
[57] Once a court has found that there
are valid grounds for review, it is obliged to enter into an enquiry
with a view to formulating
a just and equitable remedy which enquiry
will entail all relevant factors.
Applicable Procurement Framework
[58] Section 111 of the Local
Government: Municipal Finance Management Act 56 of 2003 (“the
MFMA”) determines that each
municipality entity must have and
implement a supply chain management policy which gives effect to the
provisions of Part 1 of
Chapter 11 thereof.
[59] Section 112 of the MFMA further
requires any supply chain management policy of a municipality or
municipal entity to be fair,
equitable, transparent, competitive and
cost-effective and to comply with a prescribed regulatory framework
for municipal supply
chain management, which must cover at least the
stipulated issues as set out at section 112(1)(a) – (9).
[60] The
Municipal Supply Chain
Management Regulations promulgated
in terms of
Section 168
of the
MFMA by way of General Notice 868 in Government Gazette 27636 of 30
May 2005 sets out the requirements that any such supply
chain
management policy must comply with.
[61] After considering the first
respondent’s policy, I am satisfied that it complies with the
requirements stipulated in
the MFMA and the aforementioned
regulations.
[62] The first respondent also conceded
that the process had to be conducted in compliance with the policy.
[63] In my view the crucial question to
be determined is whether there was an irregularity in the process in
the sense of material
non-compliance with the policy and whether such
an irregularity amounts to a ground of review under PAJA.
The applicant’s grounds for
review
[64] I pause to mention at this stage
that it appears that applicant does not appear to attack the
lawfulness or reasonableness
of the first respondent’s actions
and decisions but appears to have concentrated its attack on its
right to procedurally
fair administrative action.
[65] On a consideration of the
applicant’s founding affidavit it appears as if the applicant
is actually dissatisfied with
the correctness of the substantive
outcome of the process. It was strongly contended on behalf of the
respondents that as applicant
is not entitled to attack the
correctness of the decision; it now seeks to achieve the same object
by attacking the procedural
fairness of the evaluation process on
grounds that are untenable and artificial.
[66] For the sake of convenience I
shall deal with the applicant’s grounds of review under
following headings:
1. The BEC was not properly
constituted;
2. Whether the use of the average score
methodology by the first respondent amounts to administrative action
in terms of PAJA and
therefore qualifies as a ground of review.
The BEC was not properly constituted
[67] Although an argument is raised in
paragraphs 8 to 11 of applicant’s heads of argument that first
respondent’s BEC
was not properly constituted, and that there
was no compliance with Clause 28(2) of the first respondent’s
supply chain policy,
these points were not pursued during argument on
behalf of the applicant. It was suggested that the policy required
that at least
one supply chain management practitioner was required
to be on the BEC.
[68] Clause 28(2) of the supply chain
management policy requires that the BEC must as far as possible
consist of (i) officials from
departments requiring the goods or
services put out to tender, and (ii) at least one supply chain
management practitioner.
[69] In my view such an argument would
have been opportunistic considering that first respondent provided
the applicant with all
the relevant documentation in its possession
(inclusive of the information relating to this issue) in its letter
of 27 March 2014.
Applicant at no stage raises this issue nor is it
traversed in its founding papers or further affidavits. In its
answering papers
the first respondent expressly alleges that the BEC
was properly constituted, that it evaluated the proposal, and that it
prepared
the report. These allegations were never disputed by the
applicant in reply. The identity of the members of the BEC is
further
evident from the first respondent’s answering
affidavits. In fact the BEC consisted of Ms Toetsie (a manager:
Support Services),
Mr Williams (a manager: Water and Sanitation) and
Mr Jagers (an Engineering Technologist: Roads and Stormwaters).
[70] Based on the evidence presented by
the first respondent, I am satisfied that the report was in fact
prepared by the BEC. In
fact in its answering affidavit the first
respondent specifically describes the report as the report by the BEC
to the BAC. A
further reason why this argument must fail is that the
requirement in
Section 28(2)(b)
of the policy, that a supply chain
management practitioner of first respondent must be a member of the
BEC, is clearly not imperative
or mandatory.
Whether the use by the first respondent
of the average score methodology in evaluating the tenders/proposal
amounts to administrative
action in terms of PAJA and therefore
qualifies as a ground of review.
[71] Since much of the applicant’s
argument in this regard is based on the document F.3.11.3 as appears
on page 7 of the tender
document, I deem it appropriate to reproduce
it at this stage so that the arguments are viewed in better
perspective.
THE TENDER SALDANHA
BAY MUNICIPALITY PART T1.2
F.3.11.3 PRE-EVALAUTION QUALITY
CRITERIA - MINIMUM AVERAGE SCORE 70%
1. SPECIFIC PROJECT APPLICABLE
EXPERTISE 60 POINTS (TOTAL)
Infrastructure of Firm to execute
project 20
The Firm’s infrastructure in
order to execute projects in this discipline is hereby evaluated.
This includes all offices,
technological infrastructure, etc.
Excellent = 20 -15 Good = 14-10
Fair = 9-4 Poor = 3-0
Project experience of proposed team in
this field 30
The Firm’s key personnel’s
experience in projects relating to this discipline. Technologically
advanced projects and
special achievements done in this discipline
are looked at.
Excellent = 30-23 Good = 22-15
Fair = 14-7 Poor = 6-0
Quality Management System:
10
ISO 9001:2001 = 10 CESA approved
system = 5
2. Approach and Methodology 40 points
(TOTAL)
Understanding of the terms of
reference/brief 15
Did the consultant understand the brief
correctly and was his/her proposal up
to expectations?
Yes = 15 Partly = 10 No = 5
Approach and work plan 25
The approach and work plan to the
problem;
Unique and innovative = 25 Workable =
15 Not acceptable = 5
The minimum percentage for the
pre-evaluation is 70.
Tenderers who obtain a score of less
than 70% of the points allocated in the pre-evaluation will be
declared ineligible to tender.
Civil Services – Tender 86/2013
[72] It is common cause that two
members of the first respondent’s BEC gave applicant a score of
70% for quality and the third
gave it a score of 66%. Applicant’s
average quality score was therefore 68.67% and it was accordingly
disqualified as it
did not cross the quality threshold.
[73] The applicant avers that the
respondent did not disclose to it and or explain to it that an
average score would be awarded
in evaluating the tender. This
contention is not dealt with in applicant’s heads of argument
nor were any submissions made
during argument in this regard. It is
however clear on the evidence and the document F.3.11.3 that
tenderers were advised that
they were required to achieve ‘a
minimum average score’ of 70% in respect of quality criteria
and that tenderers who
did not do so would be ‘declared
ineligible’ to tender.
[74] As mentioned above, Mr G
Friedberg, a representative of the applicant, attended an information
session held at the Council
Chambers of the first respondent on 24
October 2013 at which meeting the services and the manner in which
the tender would be evaluated
were discussed in detail.
[75] First respondent further made it
clear to the tenderers what factors would be taken into account to
judge the quality criteria
and how those factors were weighted.
According to the dicta in Minister of Environmental Affairs &Tourism
and Another v Scenematic
Fourteen (Pty) Ltd 2005(6) SA 182 (SCA) at
[18] the first respondent was in any event not necessarily required
to explain to tenderers
in advance how the bids for the tender would
be processed. In South African National Roads Agency Limited v The
Toll Collect Consortium
2013(6) SA 356 (SCA) at [22] the SCA further
made it clear that, ‘Disclosure of [a] refined process of
scoring in relation
to a tender evaluation process will only be
required if its non-disclosure would mislead tenderers or leave them
in the dark as
to the information they should provide in order to
satisfy the requirements of the tender’. Applicant makes no
allegations
of this nature nor does it allege that it would have
prepared the tender differently if it knew that an average score
would be
calculated.
[76] I am on the whole satisfied that
the first respondent complied with the relevant requirements.
Accordingly I find that the
averment by the applicant that it was not
advised that an average score would be used and that the tender
process was for this
reason procedurally unfair has no merit and
falls to be dismissed.
[77] According to
section 1
of PAJA,
‘administrative action’ means any decision taken, or any
failure to take a decision, by-
(a) an organ of state, when-
(i) exercising a power in terms of the
Constitution or a provisional constitution; or
(ii) exercising a public power or
performing a public function in terms of any legislation; or
(b) a natural or juristic person, other
than an organ of state, when exercising a public power or performing
a public function in
terms of an empowering provision,
which adversely affects the rights of
any person and which has a direct, external legal effect, but does
not include-
(aa) the executive powers or functions
of the National Executive, including the powers or functions referred
to in sections 79(1)
and (4), 84(2)(a), (b), (c), (f), (g), (h), (i)
and (k), 85(2), (b), (c), (d) and (e), 91(2), (3), (4) and (5),
92(3), 93, 97,
98, 99 and 100 of the Constitution;
(bb) the executive powers or functions
of the Provincial Executive, including the powers or functions
referred to in sections 121(1)
and (2), 125(2)(d), (e) and (f), 126,
127(2), 132(2), 133(3)(b), 137, 138, 139 and 145(1) of the
Constitution;
(cc) the executive powers or functions
of a municipal council;
(dd) the legislative functions of
Parliament, a provincial legislature or a municipal council;
(ee) the judicial functions of a
judicial officer of a court referred to in section 166 of the
Constitution or of a Special Tribunal
established under section 2 of
the Special Investigating Units and Special Tribunals Act, 1996 (Act
74 of 1996), and the judicial
functions of a traditional leader under
customary law or any other law;
(ff) a decision to institute or
continue a prosecution;
(gg) a decision relating to any respect
regarding the nomination, selection or appointment of a judicial or
any other person, by
the Judicial Service Commission in terms of any
law;
[Para. (gg) substituted by s. 26 of Act
55 of 2003.]
(hh) any decision taken, or failure to
take a decision, in terms of any provision of the
Promotion of Access
to Information Act, 2000
; or
(iii) any decision taken, or failure to
take a decision, in terms of
section 4(1).
[78] Mr Bruwer who appeared on behalf
of the applicant contended that the methodology of the first
respondent in calculating an
average score in evaluating its proposal
was wrong and not authorised by the tender documentation. The basis
of this argument
seems to be that as two of the three evaluators gave
its bid a score of 70% for quality that it should have progressed to
the second
stage of the tender evaluation. According to his
argument, the ‘majority of the scores’ approach, and not
the ‘average
of the scores’ approach, should have been
used. Counsel for respondents argued strongly that such an approach
is in conflict
with the tender document which specifically states
that a ‘minimum average score’ of 70% was required. On a
consideration
of the first respondent’s policy or the proposal
and more so Section F.3.11.3 of the tender document, it is clear
requirement
that a bidder must achieve a minimum average score of 70%
in respect of its technical proposal.
[79] On considering the meaning of the
words ‘administrative action’ as set out in
section 1
of
PAJA, I am satisfied that the decision by the first respondent to use
a particular scoring approach is not and can never be
interpreted to
amount to administrative action as contemplated in PAJA. I agree
with Ms Reynolds who appeared on behalf of the
second respondent that
it is not a decision which in itself ‘adversely affects the
rights of any person’, nor does
it in itself have a direct
external legal effect. It is further inconceivable, considering that
reference is specifically made
to an ‘average score’, how
the BEC was expected to determine a single score for a bidder without
calculating the ‘average
score’ awarded by its members.
[80] If I am to assume that applicant
intended to launch an attack on the basis that the reasonableness of
the scoring approach
adopted by the first respondent is reviewable,
then I would have to find that the administrative decision by the
first respondent
to adopt the scoring approach that it did, ‘is
one that a reasonable decision maker could not reach’. See
Bato Star
Fishing (Pty) Ltd v Minister of Environmental Affairs
(supra) at [44].
[81] It seems to me that to be
reasonable the decision must be capable of furthering the purpose for
which the power to make the
decision (in the present matter) to
determine the scoring methodology was given. According to Cora
Hexter, (supra) what is required
is ‘merely a rational
connection – not perfect or ideal rationality’. In
Democratic Alliance v President of
the Republic of South Africa and
Others 2013(1) SA 248 (CC) at 32 the court held that the aim of
evaluating the relationships between
means and ends ‘…is
not to determine whether some means will achieve the purpose better
than others but only whether
the means employed are rationally
related to the purpose for which the power was conferred’.
[82] In my view applicant has not made
out a case to show that the first respondent’s decision to use
the average of scores
rather than the majority scores is so
unreasonable that no reasonable decision maker could have decided
this. Accordingly this
argument must also fail.
[83] It was further contended by Mr
Bruwer that in terms of the tender requirements the evaluators were
given a discretion to allocate
points insofar as infrastructure and
project experience are concerned and that insofar as approach and
methodology are concerned
that the evaluation was limited to an
assessment of whether or not the applicant understood the brief
correctly and whether or
not the proposal was up to expectations. He
further contended that insofar as the approach and work plan are
concerned, their
discretion was limited to determining whether in the
opinion of the evaluators the approach and work plan were unique and
innovative,
workable or not acceptable.
[84] He submitted that the evaluators
did not exercise their discretion properly and that applicant should
have achieved a total
score of 73%, i.e., if the total scores of
three evaluators are to be added if they exercised their discretion
in accordance with
the terms as set out in the tender document.
[85] When considering the submissions
made by applicant, I have regard to the fact that the tender document
falls to be dealt with
as a legal document. In KPMG Chartered
Accountants (SA) v Securefin Limited and Another 2009(4) SA 399 (SCA)
[Harms DP in dealing
with the interpretation of a document, held as
follows at paragraphs [39] – [40]:
1. ‘If a document was intended to
provide a complete memorial of a jural act, extrinsic evidence may
not contradict, add to
or modify its meaning.
2. ‘Interpretation is a matter of
law and not of fact and, accordingly, interpretation is a matter for
the court and not for
witnesses …’
3. ‘[T]he rules about
admissibility of evidence in this regard do not depend on the nature
of the document, whether statute,
contract or patent ...,’
4. ‘[T]o the extent that evidence
may be admissible to contextualise the document (since ‘context
is everything’)
to establish its factual matrix or purpose` or
for purposes of identification, one must use it as conservatively as
possible.’
[86] It is clear that a paramount
consideration in the interpretation process therefore revolves around
the ‘context’
or ‘factual’ matrix’. It
is further accepted law that in the event of ambiguity, it is
permissible for the court
to consider evidence of background
circumstances including, which is particularly relevant in the
present matter, the nature and
purpose of the tender document.
[87] It seems to me that when
considering a tender document that one of the basic purposes which it
serves (in a tender where quality
or functionality is a relevant
factor, rather than price alone) is to enable the relevant
decision-makers to evaluate whether the
goods or services offered by
the tenderers meet the quality requirements of the State. In Cash
Paymaster Services (Pty) Ltd v
Eastern Cape Province and Others
1999(1) SA 324 (CKHC) the court succinctly set out the position at
350H as follows:
‘The very essence of tender
procedures may well be described as a procedure intended to ensure
that government, before it
procures goods or services, or enters into
contracts for the procurement thereof, is assured that a proper
evaluation is done of
what is available, at what price and whether or
not that which is procured serves the purposes for which it is
intended’.
[88] According to the argument advanced
on behalf of the applicant the members of the BEC, when evaluating
the bids for ‘Approach
and Methodology’, were permitted
to allocate a score of only 15 or 10 or 5, for understanding the
terms of reference, and
only 25 or 15 or 5 for ‘approach and
work plan’. According to this argument an individual member of
the BEC was not
permitted for example to allocate a score of 20 for a
bidder’s approach and work plan which fell somewhere between
‘unique
and innovative’ and ‘workable’; or a
score of 0 rather than 5 for a bid which contained no indication at
all
of the bidder’s approach or work plan.
[89] On the whole it seems that
applicant alleges that two of the BEC members, Toesie and Jagers,
were unable to identify the relevant
criteria by which the evaluation
had to be undertaken, as a result of which they did not assess and
determine the correct points
that should have been allocated in
respect of the tender.
[90] It is important to point out at
this stage that although the applicant contends that the evaluators
had no discretion as far
as the assessment of the applicant’s
‘Approach and Work Plan” is concerned, the applicant
conceded that the scoring
of the tender is a matter which lies within
the discretion of the evaluator.This is of course a contradiction.
[91] It is further clear that even
though applicant admits that the evaluators have a discretion in
conducting their assessments
it is not prepared to allow room for a
nuanced approach on the part of the evaluators.
[92] In my view the very nature and
purpose of the document F.3.11.3 permits for the members of the BEC
to exercise a discretion
in respect of the scoring of the respective
categories relating to the Pre-Evaluation Quality Criteria. It must
be so that the
purpose of F.3.11.3 is to specifically disclose to
bidders the basic criteria against which their bids would be assessed
for quality
and at the same time the relative weight of the various
criteria.
[93] The correct interpretation of
F.3.11.3 in the context of the tender document must accordingly be
that evaluators are permitted
to give a score appropriate to a
particular tender rather than, as was correctly contended by Mr
Reynolds, being ‘straight
jacketed’ into one of a set of
predetermined scores. Such an interpretation allows for a proper
evaluation of quality which
is in fact what is required in situations
such as the present and is consistent with the purpose of F.3.11.3
which is ultimately
to make it clear to bidders what the basic
quality criteria are and how they are weighted.
[94] In any event, it seems to me that
had the evaluators only allocated scores of 5, 15 or 25 for the work
plan as applicant contends
they were obliged to do, they (being
Toesie and Jagers) would both have allocated scores of 15 and not 25.
Their actual scores
(18 and 19 respectively), as appears from the
evaluation sheets H1 and H3 to the founding affidavit, are closer to
15 than to 25.
If consideration is given to their actual qualitative
assessments (‘fair’ and ‘acceptable’) then
it is
clear that they fall way short of ‘unique and
innovative’, and are more in line with ‘workable’,
the description
with which a score of 15 is associated in terms of
F.3.11.3.
[95] It is generally accepted law that
the court can only interfere if the tender process is infected with
illegality, impropriety
or corruption. There is no evidence of this
present in this matter. It is further accepted law that where the
complaints merely
go to the result of the evaluation of the tender
(as in the present matter), the court will be reluctant to intervene
and to substitute
its judgment with that of the evaluator. A court
may not interfere because the tender could have been clearer or more
explicit.
Nor will it interfere because it disagrees with the
assessment of the evaluator as to the relative importance of
different factors
and the weight to be attached to them. See South
African National Roads Agency v The Toll Road Consortium and Another
2013(6)
SA 356 (SCA) at [25] to [27].
[96] In my view there is no merit to
any of the arguments raised by the applicant that the tender is
reviewable and should therefore
be set aside. It follows that the
further relief sought by the applicant can also not be granted.
[97] In the result I make the following
order:
The application is dismissed with
costs.
RILEY, AJ