Significant court judgments affecting Public Procurement and Contract
Management (South Africa)
- PROCEDURAL FAIRNESS
- A case dealing with procedural fairness in the evaluation and award of public procurement tenders. It provides clarity on the affording of tenderers an opportunity to engage the process prior to a decision being made.
- Clarification on the condonation of non-compliance by state functionaries and strict adherence to peremptory requirements:
2. FUNCTIONALITY CRITERIA
- A case dealing with evaluation of functionality criteria, and the separation of functionality from calculation of points for price and preference.
- Clarification of the proper meaning of section 2 of the Preferential Procurement Policy framework act (2000) and prohibition of use of “Method 4” of evaluation which combines “Quality, Price and Preference”:
Link: Sizabonke Civils CC t/a Pilcon Projects v Zululand District Municipality and Others
3. ADHERENCE TO PEREMPTORY REQUIREMENTS
- A case dealing with evaluation and awards of bids with strict adherence with provisions of the legislation, Treasury prescripts and bid conditions:
Link: Dr JS Moroka Municipality and Others v Betram and Another – ZASCA 186 – 29 November 2013
4. TENDER VALIDITY PERIOD
- A case dealing with requirements of extension of tender validity period and what is not acceptable in law.
- The other cases clarify that the extent to which non responsive and responsive tenderers could be involved in the evaluation of bids:
Link: Joubert Galpin Searle Inc and Others v Road Accident Fund and Others (ECP)- (25 March 2014)
Link: Wattpower Solutions CC and Another v Transnet SOC Limited and Another – 20 December 2021
Link: Ethekwini Municipality v Mantengu Investments CC and Others 6 May 2020)
5. COMPREHENSIVE RISK ANALYSIS
- A case dealing with the extent to which Orhans of State are permitted to conduct risk analysis to determine the suitability of tenderers. It also deals with the assessment of information submitted for evaluation of functionality requirements:
Link: Wattpower Solutions CC and Another v Transnet SOC Limited and Another – 20 December 2021
Link: LDM Consulting v Dube Tradeport and Others – KZN High Court – April 2021
6. MUNICIPAL SYSTEMS ACT (SECTION 62 NOT APPLICABLE ON TENDER AWARDS)
- A case dealing with the extent to which s62 of Municipal Systems Act applies to public tenders. The case clarifies that a decision made by a municipality can only be reviewed by a court of law as per PAJA requirements. Internal Appeals do not apply to administrative decisions affecting public procurement.
Link: Maximum Profit Recovery (Pty) Ltd v Inxubu Yethemba Local Municipality and Others – 16 February 2021
7. PROPER SPECIFICATION AND ADHERENCE TO TENDER REQUIREMENTS
- A case dealing with the standardization of procurement documents and templates. It also deals with strict adherence to tender rules and the second case also deals with proper constitution of bid committees:
Link: Rodpaul Construction CC – Rods Construction v Ethekwini Municipality and Others – 2 June 2014
Link: Allpay Consolidated Investment Holdings (Pty) Ltd and Others v CEO of the SASSA and Others (CC)
8. SUBMISSION OF INFORMATION FOR EVALUATION PURPOSES (FORM OVER SUBSTANCE)
A case dealing with whether the information submitted by tenderers for purposes of claiming functionality points or adhering to tender documents should be in a particular format, even if it is not strictly mentioned in the tender conditions:
Link: Haw and Inglis Civil Engineering (Pty) Ltd v MEC of FS Police Roads and Transport – (28 May 2010)
9. PREPARATION OF SPECIFICATION AND TENDER DOCUMENT BY A PROFESSIONAL SERVICE PROVIDER WHICH MAY ALSO TENDER FOR THE SAME SERVICE
- A case dealing with whether it is permissible in law to have a service provider which was involved in the advice or preparation of specification (i.e. prior involvement of a tenderer) to also submit the tender for the same service when it is issued out by the employer. The focus is on fairness and perceived biased specification.
Link: Aurecon South Africa Pty Ltd v City of Cape SCA 9 December 2015
Link: City of Cape Town v Aurecon South Africa (Pty) Ltd [2017]
10. SELF REVIEW: UNLAWFUL AWARDS
- A case dealing with whether it is permissible for Organs of State to cancel their own awards when they view or find them to have been unlawfully awarded. Clarification of PAJA provisions.
Link: Buffalo City Metropolitan Municipality v Asla Construction (Pty) Limited – CCT -16 April 2019)
11. DETERMINATION OF PREFERENTIAL PROCUREMENT POLICY BY ORGANS OF STATE, NOT BY MINISTER OF FINANCE ON THEIR BEHALF
- Organs of State must determine their own Preference Procurement Policy and implement it within the framework outlined in the PPPFA.
- The case below clarifies and also curtails the powers of the Minister of Finance to formulate PPPFA regulations (2017) on behalf of other organs of state.
- The case essentially makes Prequalification of bids using Regulation 4 and Regulation 9 of the PPPFA Regulations 2017 unlawful.
Link: Minister of Finance v Afribusiness NPC (CCT 279/20) [2022] ZACC 4 (16 February 2022)
12. WITHDRAWING OF OR CANCELLATION OF APPOINTMENT LETTER OR AWARD LETTER WHEN SUSPENSIVE CONDITIONS HAVE NOT BEEN MET
- A case dealing with whether an Organ of state is permissible in law to withdraw an appointment letter or letter of award if preconditions prior to an agreement is signed are not met.
- Non adherence to Suspensive conditions (stipulated in an award letter) with a specified time form sufficient grounds to cancel an award.
13. FAILURE TO SUBMIT INFORMATION (COPIES OF DOCUMENTS) STIPULATED IN TENDER RULES
- The nature and form of information to be submitted by tenderers for purposes of evaluation, as per tender conditions and how SCM bid committees should deal with it, is clarified in this case
- The court also clarified the unlawfulness of excluding tenderers which did not submit a “certified copy” or a copy of a cidb certificate with their tender, when such information could be obtained by other means. A tender condition requesting tenderers to submit certified copies of cidb certificate with their bids to be considered for evaluation is therefore unreasonable.