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 211
|
|
Envitech Solutions (Pty) Limited v Saldanha Bay Municipality and Another (11275/2014) [2015] ZAWCHC 211 (13 August 2015)
REPUBLIC
OF SOUTH ARICA
IN THE
HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case
No: 11275/2014
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