Faranani Information Technology Services (Pty) Ltd v State Information Technology Agency (SOC) Limited and Others (66318/15) [2015] ZAGPPHC 1070 (18 September 2015)

REPUBLIC OF SOUTH AFRICA

IN THE GAUTENG DIVISION OF THE HIGH COURT OF SOUTH

AFRICA, PRETORIA

JUDGMENT

Case no: 66318/15

DATE: 18 SEPTEMBER 2015

Not reportable

In the matter between:

FARANANI INFORMATION TECHNOLOGY

SERVICES (PTY) LIMITED...................................................................................................Applicant

And

STATE INFORMATION TECHNOLOGY AGENCY

(SOC) LIMITED..............................................................................................................1st Respondent

GIJIMA HOLDINGS (PTY) LTD.................................................................................2nd Respondent

THE MEMBER OF THE EXECUTIVE COUNCIL

FOR THE MPUMALANGA DEPARTMENT OF

HEALTH...........................................................................................................................3rd Respondent

MNGOIBISA -THUSI, J

[1]The first respondent, the State Information Technology Agency Ltd, ("SITA") is a procurement arm of the State responsible for the administration, evaluation and awarding of government tenders.

[2]On 5 December 2014, the SITA issued a tender document inviting interested parties to bid for the rendering of support and maintenance services of its Patient Electronic Information Systems ("PEIS") to the Department of Health, Mpumalanga. The applicant ("Faranani") and the second respondent ("Gijima") were the only bidders for the tender. Faranani is the incumbent service provider of PEIS in Mpumalanga and its contract is due to expire on 30 September 2015.

[3]According to the SITA, both bidders surpassed the 70% threshold of the mandatory requirements relating to technology knowledge, expertise and experience. The only distinguishing factor between Faranani and Gijima related to the price, which was the determining factor in the awarding of the tender. Based on the price, the bid adjudication committee recommended Gijima as the preferred bidder and the tender was awarded to it.

[4] On 8 July 2015 and after inquiry, the SITA confirmed to Faranani that its bid was unsuccessful. Aggrieved by the rejection of its bid, Faranani, in various communications during July and August 2015, sought from the SITA the following:

4.1 information relating to the SITA is internal appeal processes. The SITA informed Faranani that it did not have any internal appeal processes.

4.2 information and documentation relating to the adjudication and evaluation of the tender. There were provided to Faranani.

4.3 reasons for the tender not being awarded to Faranani. The SITA provided Faranani with the reasons for its bid being rejected.

4.4 an undertaking from the SITA that it would not implement the tender pending finalisation of the internal appeal process and a contemplated urgent review application. The SITA refused to give such an undertaking. Despite the threat of legal action by Faranani if the decision to award the tender to Gijima was not reconsidered by 5 August 2015, nothing came of the threat by the contemplated date.

[5]In its communication with the SITA, Faranani also expressed its view that Gijima did not satisfy the mandatory and non-mandatory requirements of the tender and objected to the tender being awarded to Gijima.

[6]On 19 August 2015 Faranani launched these proceedings on an urgent basis in which it seeks the following relief:

6.1 that pending the finalisation of an intended application to review and set aside the decision by the SITA to award the PEIS tender to Gijima (Part B), the SITA be interdicted and restrained from implementing the appointment of Gijima as the service provider for the PEIS tender (Part A); and

6.2 that the SITA and any other respondent (s) who oppose the interim relief, be ordered to pay the costs of this application, including costs of two counsels, alternatively, that costs be reserved for determination in terms of Part B.

[7]Although not relevant for determination in these proceedings, it is appropriate to set out the relief sought by Faranani in the contemplated review application. In Part B Faranani seeks the following relief:

7.1 that the decision of the SITA to appoint Gijima as the service provider for the PEIS in Mpumalanga be reviewed and set aside;

7.2 that the decision of the SITA to award the tender to Gijima be substituted by awarding the tender the Faranani;

7.3 that the SITA and Gijima be interdicted and restrained form concluding a service level agreement pursuant to the award of the tender; and

7.4 that the SITA and Gijima be rendered to pay the costs (including costs of two counsel), in the event of opposing, jointly and severally, the one paying the other to be absolved.

[8]The SITA and Gijima are opposing the relief sought and the third respondent will abide by the decision of the court.

[9]The SITA is opposing the application on two grounds, namely, that:

9.1 the application is not urgent as Faranani should have instituted the proceedings as early as 29 July 2015 when it informally learnt that its bid was unsuccessful or at the latest on 8 July 2015 when the SITA formally informed it that its bid was unsuccessful;

9.2 Faranani has not satisfied the requirements of an interim interdict.

[10] Gijima is opposing the application mainly on the ground that Faranani's application does not meet the requirements for the granting of an interim interdict.

[11] The issues to be determined are whether the application is urgent. If it is found to be urgent, whether Faranani has met the requirements for the granting of an interim interdict.

Urgency

[12] With regard to the issue of urgency, it is Faranani's contention that it could not have instituted these proceedings earlier after learning of the outcome of its bid, as it was necessary for it to seek certain relevant information from the SITA in order to consider whether to challenge SITA's decision to award the tender to Gijima.

[13] Bearing in mind that Faranani's contract with the SITA expires on 30 September 2015 and as correctly pointed out by Mr Watt-Pringle counsel for Faranani, that it sought information from the SITA before deciding to launch these proceedings, I am satisfied that enrolling this matter in the normal court roll would had defected the relief sought by Faranani. I am therefore of the view that Faranani has been out a case for urgency.

Merits

[14] In order to succeed, Faranani has to show that:

14.1 it has a clear right or a prima facie right, though open to some doubt. In Webster v Mitchell[1], the court stated that:

"the use of the phrase 'pima facie established though open to some doubt" indicates I think that more is required than merely to look at the allegations of the applicant, but something short of a weighing up of probabilities of conflicting versions is required. The proper manner of approach is to take the facts as set out by the applicant together with any facts set out by the respondent which applicant cannot dispute and to consider whether, having regard to the inherent probabilities, the applicant could on those facts obtain final relief at a trial. The facts set up in contradiction by the respondent should then be considered. If serious doubt is thrown on the case of the applicant he could not succeed in obtaining temporary relief, for his right, prima facie established, may only be open to ''some doubt".

14.2 it has a well-grounded apprehension of irreparable harm if the relief is not granted and the ultimate relief is granted.

14.3 it has no other satisfactory remedy; and

14.4 the balance of convenience favours the granting of interim relief. In Olympic Passenger Service (Pty) Ltd v Ram lagan[2] the court stated that:

"(B)y balance of convenience it meant the prejudice to the applicant if the interdict be refused, weighed against the prejudice to the respondents if is be granted."

[15] In determining whether an interim interdict should be granted, the four requirements have to be considered as a whole.

[16] Before considering the issue of the interim interdict, it is apposite to the point and that in terms of section 217(1) of the Constitution, an organ of State is required to contract for goods and services "in accordance with a system which is fair, equitable, transparent, competitive and cost-effective".

[17] The main objection raised by Faranani to the decision to award the tender to Gijima is that Gijima does not have the necessary experience, expertise and certification to render the services required. In this regard, Faranani takes issue with the fact that Gijima did not, in its bid document, provide information about its expertise and certification. It is Faranani's contention that, Dr Maverenge, the expert Gijima mentioned as having the required experience and expertise to operate the PEIS, is not qualified to operate PEIS and does not have the necessary experience of dealing with the PEIS. It is for this reason that Faranani argues that Gijima should have been disqualified as a bidder and that the tender should have been awarded to it.

[18] With regard to the mandatory requirements which Faranani alleges that Gijima did not comply with, the tender document required that:

18.1 the candidate should be 50% technologically and functionally certified (requirement 2.3);

18.2 that the candidate needed to have three (3) years' experience and expertise in the operation of a provincial hospital and related health care processes (requirement 2.16.1); and

18.3 that the candidate needed three (3) years expertise and knowledge of the health care systems (2.16.2).

[19] It was submitted on behalf of Gijima and SITA that the bid adjudication committee had adjudicated and evaluated Gijima's bid and found it to meet the requirements of the tender. Further that, in terms of the tender documents it was not necessary for Gijima to provide any further information than was necessary to show that it had the necessary experience and expertise as the tender document did not require any substantiation. Counsel for the SITA contended that even though no substantiation of qualification was asked for, the practice is that before the tender is implemented, Gijima would be required to provide confirmation of its experience and expertise. It was further contended that had Faranani accepted the invitation to a debriefing session with the SITA, Gijima's experience and expertise would have been explained in it. It was further argued that reference to Dr Maverenge in the answering affidavit was just an example of the experience and expertise available to Gijima.

Furthermore, it was argued that Gijima has at its disposal a team of experts who would be involved in the project.

[20] The other complaint Faranani had with Gijima's qualification to be awarded the tender was that Gijima's bid was not properly priced in that it failed to incorporate the price for the Electronic Data Interchange (EDI). It is the SITA and Gijima's contention that in this regard Faranani failed to properly read Gijima's submission with regard to the EDI in that in its calculation of the price, Gijima had already factored the price of the EDI.

[21] It was on the basis of the above that Faranani contends that Gijima was not entitled to be awarded the tender in that it had misrepresented its technology experience and expertise and had improperly calculated the EDI. Faranani's contention appears to be based on assumptions it has made with regard to Gijima's qualification for the tender. It does appear as though Faranani actually interrogated Gijima's bid documentation in order to establish that Gijima lacked the required qualification to be awarded the tender. As submitted by counsel for the SITA, had Faranani accepted the invitation to attend a debriefing session with the SITA after the tender was awarded to Gijima, its concerns would have been addressed. From the papers filed of record and submissions made by Faranani's counsel, it would appear that Faranani's only claim to a prima facie right is the fact that it is the incumbent and has been the service provider for the past 11 (eleven) years.

[22] In Bato Star Fishing (Pty) Ltd v Minister of Environment Affairs and Others[3], the Constitutional Court said that:

"[48] In treating the decisions of administrative agencies with the appropriate respect, a Court is recognising the proper role of the Executive within the Constitution. In doing so a Court should be careful not to attribute to itself superior wisdom in relation to matters entrusted to other branches of government. A Court should thus give due weight to findings of fact and policy decisions made by those with special expertise and experience in the field. The extent to which a Court should give weight to these considerations will depend upon the character of the decision itself, as well as on the identity of the decision-maker. A decision that requires an equilibrium to be struck between a range of competing interests or considerations and which is to be taken by a person or institution with specific expertise in that area must be shown respect by the Courts."

[23] Faranani does not allege any irregularity in the evaluation and adjudication of the tender save to assert that Gijima misrepresented certain information in its bid documentation, which led the SITA awarding the tender to it. This assertion on its own, in my view, is not sufficient enough to ground a prima facie right to Faranani to be awarded the tender. Faranani was aware that the bid documentation did not require any substantiation of certain mandatory and non-mandatory requirements of the bid and in spite of that participated in the bid. Whether Gijima actually has the required qualification or not to qualify to be awarded the tender was a decision to be made by the bid adjudication committee.

[24] It is trite that the stronger the prospect of success in the main proceedings. The less the need for the balance of convenience in favour of applicant. It is the contention of Gijima that looking at the relief sought by Faranani in the main application, even if it was disqualified, Faranani would not be awarded the tender as its price was beyond the budget for the tender.

[25] It was argued on behalf of Faranani that the balance of convenience favours it in that it already has 10 employees in its employ and has invested a lot in infrastructure. A similar argument was made on behalf of Gijima that it has already expended a lot of resources in preparation for the implementation of the tender. On behalf of the SITA it was argued that the only interest Faranani had was a commercial interest. That even if the implementation of the tender is not stayed, the public using the public hospitals would not be prejudiced in that Gijima would be in a position to service the hospital.

[26] If Faranani is successful in its review application, it will have lost the income it would have earned had the tender been awarded to it. By the same token, if Faranani is not successful in the main application, Gijima in turn would have lost the income it would have earned if the tender is implemented on 01 October 2015. I am of the view that Gijima would suffer more prejudice if the tender is not implemented and Faranani does not succeed in the main application in that it has already expended vast resources in a manner not yet determined as being unlawful and therefore the balance of convenience are against Faranani particularly in light of sufficient evidence of a prima facie right.

[27] In Verstappen V Port Edward Town Board and Others[4] 1994(3) SA 569(D) the court held that:

"I do not believe that the learned Judge intended to suggest that the manner in which the grant or refusal of an interdict would affect the immediate parties to the litigation was the only matter relevant to a determination of the balance of convenience. Where as in this

case, the wider general public is affected, the convenience of the public must be taken into account in any assessment of the balance of convenience."

[28] I am also of the view that Faranani does have an alternative remedy in that it is still open to it to pursue its review application, which if successful, it would be in a position to continue rendering the services.

[29] Accordingly, the following order is made:

"The application is dismissed with costs."

NP Mngqibisa-Thusi

Appearances

For the Applicant:Adv CE Watt Pringle SC and Adv KS McLean For the First Respondent: Adv FJ Nalane

For the Second Respondent: Adv NA Chohan SC together with Adv A Govender

[1]1948(1) SA 1186 (W) at 1189.

[2]1957(2) SA 382 (D) at 383F.

[3] 2004 (4) SA 490 (CC).

[4]1994(3) SA 569(D) at 576A.