Nucon Roads and Civils (Pty) Ltd v MEC For Department of Public Works, Roads and Transport: N.W. Province and Others (M71/14) [2014] ZANWHC 19 (8 August 2014)

IN THE NORTH WEST HIGH COURT

MAFIKENG

CASE NO.: M71/14

In the matter between:

NUCON ROADS AND CIVILS (PTY) LTD..........................................................................Applicant

and

THE MEC FOR DEPARTMENT OF PUBLIC WORKS

ROADS AND TRANSPORT: N.W. PROVINCE........................................................ 1ST Respondent

UMSO CONSTRUCTION (PTY) LTD........................................................................2ND Respondent

MAC P CONSULTING CC...........................................................................................3RD Respondent

BAGALE CONSULTING (PTY) LTD.........................................................................4TH Respondent

MIVAMI CONSTRUCTION (PTY) LTD....................................................................5TH Respondent

MAPHOITSILE JOINT VENTURE............................................................................6TH Respondent

BA-PHALABORWA 72 AMANDWALA TRADING..................................................7TH Respondent

WORLEY PARSONS RESOURCES AND ENERGY................................................8TH Respondent

CIVIL MATTER

KGOELE J

DATE OF HEARING : 09 MAY 2014

DATE OF JUDGMENT : 08 AUGUST 2014

FOR THE APPLICANT: Adv. Daaztuss

FOR THE RESPONDENT : Adv Staiis (With Him Adv. Bothma)

JUDGMENT

KGOELE J:

A. INTRODUCTION

[1] The applicant seeks an order reviewing and setting aside a decision by the first respondent to award Tender No. PWRT391-10B(1) (“the tender”) taken on or before 12 February 2014 to the second respondent. It further seeks an order awarding the tender to the applicant, alternatively that the first respondent be directed to award the tender to the applicant within seven days and in a further alternative, that the decision to award the tender be referred back to the first respondent for reconsideration and for final decision within ten days from date of the order.

B. BACKGROUND

[2] During November 2012 the first respondent invited tenders for the upgrading of road D221 from P25/1 via Maphoitsile Village to the end of tar at Magogong under contract number PWRT 391-10B(1). The closing date and time was 11h00 on 14 December 2012. Amongst others the tender notice required a grading of 8 CE or 7 CEPE (Potentially emerging or higher).

[3] Applicant as well as the second up to the seventh respondents submitted tenders in terms of the invitation. Applicant’s

tender was for the amount of R104 980 168.41 while that of the second respondent was for the amount of R133 845 273.26. The difference amounted to almost R30 million. The amount tendered by all other tenderers (respondents) exceeded the amount of the second respondent. The eighth respondent as engineers estimated the value of the project to be R109 007 147.96.

[4] During the first round of consideration of the tenders received the first respondent awarded the tender to the third respondent and ruled all the other tenderers to be non-responsive. The second respondent’s tender was ruled non-responsive because of the absence of an original certified copy of one of the director’s identity document. Applicant’s tender was ruled non-responsive because of the fact that the copy of the identity document of one of its directors was certified in 2008.

[5] Dissatisfied about the outcome the second respondent approached the Court on 9 May 2013 and obtained an interim interdict against the first respondent restraining it from implementing or carrying out the tender pending finalisation of review proceedings for setting aside the decision to award the contract to the third respondent and the reconsideration of same.

The second respondent issued a notice of motion of the said review application on the 22 May 2013. The date of the hearing was allocated as the 16 August 2013. Applicant filed an affidavit explaining its opposition and the fact that the applicant supports the review application but did not propose to be represented at the hearing. On the 19 September 2013 the first and the second respondents reached a settlement agreement which was made an order of Court. The applicant was not part of this settlement agreement. The second respondent had to re-consider the tenders received as per the agreement and make a fresh decision.

[6] The applicant alleges that it was given another opportunity before the re-consideration of the tenders again to submit a further

original certified copy of the relevant identity document, which it did. The applicant was surprised to learn on the 12 February 2014 by an e-mail it received from the state attorney on behalf of the first respondent that the tender had been awarded to the second respondent and that the applicant’s tender was eliminated “at compliance stage for submitting a CIDB certificate that was 8 CEPE compliance whereas upon verification with the CIDB office it was established that applicant was in fact a 7 CE grading at the time of closing of the tender”.

[7] The applicant then successfully approached the Court for an urgent interim interdict, interdicting and restraining the first and second respondents to enter into an agreement for the implementation or execution of the tender and also from implementing or carrying out the tender and the decision. This interdict was granted on 3 March 2014.

[8] In the meantime on 25 February 2014 the current application was issued out of this Court. In the reasons supplied by the first respondent in terms of Rule 53 of the Uniform Rules of Court (The Rules) it concedes:

8.1 That the applicant’s tender was considered nonresponsive because of the alleged inferior CIDB grading;

8.2 That the information upon which it ruled the tender to be nonresponsive was incorrect and that the applicant’s CIDB grading was in fact compliant;

8.3 That they are satisfied with the ID’s submitted. This is not a reason for eliminating the applicant’s tender anymore.

C. SUBMISSIONS

[9] Applicant’s case is to the effect that as on the date of the closing of the tender (11h00 on the 14 December 2012) its grading certificate which they appended to the tender application was 8 CEPE compliant which is even higher than a 7 CEPE as well as 8 CE required by the first respondent. Further that, the first respondent’s decision to eliminate the applicant’s tender during the reconsideration of the tenders was based on a patent error of fact. This error according to the applicant was clearly induced by the irresponsible and indefensible contentions made by the second respondent in paragraph 37 of its founding affidavit in support of its previous review application under Case No 699/13 wherein the second respondent alleged that the applicant’s CIBD grading was only 7 CE and therefore did not have the PE (Potentially Emerging) addition. These allegations according to the applicant were denied in paragraph 38 of its opposing affidavit in that application. The first respondent was therefore deprived of the opportunity to exercise its discretion because of the unlawful disqualification of the applicant’s tender and the decision thereof is according to it reviewable and stands to be set aside.

[10] Despite the concession made by the first respondent in its reasons supplied in terms of Rule 53 of the Rules to the effect that it made a mistake by eliminating the applicant’s tender because of the wrong information received from the CIBD office as indicated in paragraph 8 above, the second respondent persist with its submission that the applicant never had the correct grading certificate when the applications to tender were closed.

[11] The crisp and essential issue in this application is therefore whether the applicant complied with the CIDB grading requirements of the first respondent’s tender at the time the tender was closed on 14 December 2012. It is evident and common cause from the papers that the issue regarding the identity document is settled.

[12] To answer the applicant’s case counsel for the second respondent submitted firstly that the applicant has not made out a case in its founding affidavit for the relief it seeks. This is so according to him, because applicant in paragraph 16 of its founding affidavit stated that as a result of the fact that most of the allegations to be made in the review application are already part of the interdict application, a copy of the founding affidavit with annexures thereto are attached to the founding affidavit and prayed that it be incorporated into the founding affidavit. He referred this Court to the case of Minister of Land Affairs and Agriculture & Others v D & F Wevell 2008 (2) SA 184 (SCA) as support of his submission where the Supreme Court of Appeal held:

“It is not proper for a party in motion proceedings to base an argument on passages in documents which have been annexed to the papers when the conclusions sought to be drawn from such passages has not been canvassed in the affidavits….”

“In motion proceedings the affidavits contained both the pleadings and the evidence and the issue and averments should appear clearly

therefrom. A party could not be expected to travel through lengthy annexures to their opponents’ affidavits and to

speculate on the possible relevance of the facts therein contained. Trial by ambush could not be permitted. ( Paragraph [43] at 200C-E).”

[13] As far as the second leg upon which the second respondent based its case on, the respondent’s counsel submitted that there is a fundamental dispute of fact between the parties. According to him applicant’s grading was in 2012 7 CE. It applied for and was granted an 8 CE status only in 2013. He relied on the allegation that was contained in the second respondent’s answering affidavit deposed by its director Mr Tollo Nkosi from the CIBD office in Mafikeng, who amongst others alleged that at the time of the first review application when he verified the applicant’s grading they realised that it was 7 CE. This information according to Mr Nkosi’s affidavit was telephonically confirmed by Mr Thabane of the CIBD Mafikeng office on 8 May 2013 that it was 7 CE during the period November 2012 to January 2013. Furthermore, according to Mr Nkosi, Mr Ludick, attorney of the second respondent spoke telephonically to one Precious of the CIDB Mafikeng offices on 20 May 2013 who also advised that applicants grading was 7 CE during December 2013. This lady according to him further advised that applicant made an application for an upgrade to 8 CE but to date of the call its application was still pending. Therefore, according to the second respondent’s counsel, the CIDB certificate the applicant submitted misrepresented the applicant’s status. Despite these disputes being raised by the second respondent in the interim interdict proceedings, the respondent’s counsel further submitted, applicant had not sought to provide clarity or an explanation thereto. For the mere fact that the applicant is unable to explain the inexplicable this review application ought to be dismissed, alternatively, oral evidence is necessary for the Court to be able to make a proper determination of this issue and/or factual dispute regarding the applicant’s grading should be referred to oral evidence in accordance with the usual principles.

[14] Counsel for the applicant relied heavily on the concession made by the first respondent to support the fact that applicant’s CIBD grading was compliant at the time the tender closed. He further developed his argument by submitting that, it is a fundamental

requirement of the Constitution that the process preceding the decision to award a tender should be fair, equitable, transparent,

competitive and cost effective. He referred the Court to the case of Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and Others, 2008 (2) SA 481 (SCA) wherein the court said the following at 483, par. 4:

“The ..... Constitution lays down minimum requirements for a valid tender process and contracts entered into following an award of tender to a successful tenderer (s 217). The section requires that the tender process preceding the conclusion of contracts for the supply of goods and services, must be ‘fair, equitable, transparent, competitive and cost effective. Finally as the decision to award a tender constitutes administrative action it follows that the provisions of PAJA apply to the process.”

In addition to the above he referred to the following authorities:-

Steenkamp N.O. v Provincial Tender Board, Eastern Cape, 2007 (3) SA 121 (cc) at par. 33.

Logbro Properties CC v Bedderson N.O. and Others, 2003 2) SAa 460 (SCA) at 472 b;

Metro Projects CC v Klerksdorp Local Municipality, 2004 (1) SA 16 SCA on 21, par. 12;

Actaris South Africa (Pty) Ltd v Sol Plaatje Municipality, [2008] ZANCHC 6; (2008) 4 All SA 168 C at 178, par. 26.

[15] He furthermore submitted that the regulations promulgated in GNR 225 of 15 March 2005 in terms of the Public Finance Management Act, 1 of 1999, specifically regulation 16.5.3 thereof, requires that procurement procedure must be in accordance with a system that is fair, equitable, transparent, competitive and cost effective. The same is required in regulation 16A 3.2. He quoted from the book of Phoebe Bolton: The Law of Government Procurement in South Africa, wherein p.100 says the following:

“A golden threat running throughout legislation applicable to national and provincial government, is the requirement of cost effectiveness

when procuring goods and services.”

He indicated that Section 38(1) of the Public Finance Management Act, 1 of 1999 provides the same.

[16] According to him the applicant’s tender was unlawfully eliminated.The applicant therefore did not have the opportunity to be award the tender. He maintained that this is very unfair and not equitable because:-

16.1 The first respondent did not have the opportunity of properly exercising its discretion;

16.2 The process was not fair and equitable.

16.3 The process was not competitive because of the fact that the applicant’s tender was eliminated;

16.4 The process was not cost effective. The applicant’s price is almost R30 million lower than the second respondent’s price.

The fact that the process was not fair and equitable, not competitive and not cost effective is according to him in conflict with section 217 of the Constitution. It is therefore in terms of section 172 of the Constitution invalid and the Court must declare such conduct invalid. It is furthermore reviewable under the Promotion of Administrative Justice Act No. 3 of 2000 (PAJA).

[17] Lastly he reiterated that the mere fact that the first respondent was in possession of information adverse or prejudicial to the applicant (which could so easily have been explained in the light of the circumstances) but did not disclose this to the applicant and also did not afford the applicant the opportunity of dealing with it, is irregular and unfair because of the following:-

17.1 The first respondent was aware of the fact that the applicant appended an official certificate from the CIDB, certifying its grading as 8 CEPE;

17.2 The first respondent did not “during the first round” rule the applicant’s tender to be nonresponsive because of alleged inferior grading;

17.3 In fact, the first respondent disputed under oath the second respondent’s contentions that applicant’s grading was inferior;

17.4 The first respondent must have realised that there is a real possibility and even a probability that there must be some kind of an error somewhere and fairness dictates that it should have approached the applicant and gave it the opportunity to explain its grading.

[18] In reply to the respondent’s submission that applicant cannot in motion proceeding annex copies of a founding affidavit and pray that it be incorporated, applicant’s counsel indicated to the court that the facts of the matter of Minister of Land Affairs v Wevell referred to by respondent’s counsel are clearly distinguishable from the current one as the dispute in this matter is not new, unlike in that one the dispute was different from the previous one. In his view the applicant in this matter cannot be expected to make another affidavit which is the same as the previous one and repeat all what he said therein as it will be absurd.

[19] As far as the issue of the applicant’s grading is concerned, applicant’s counsel submitted that there is no dispute of facts as contended by the second respondent’s counsel and this Court can be able to decide the issue on the papers before it. All the information the second respondent is relying on as a basis that applicant is not 8 CE compliant is clearly hearsay evidence. All the people the second respondent relies on as to whom he made enquiries from about the applicant’s grading status had not, at the least deposed to confirmatory affidavits. The website printout relied upon was also not proven in terms of the requirements of the Electronic Communications and Transactions Act 25 of 2002.

[20] He furthermore submitted that it is accordingly clear that the only admissible evidence at this stage is direct evidence under oath on behalf of the applicant contending that its grading is 8 CE PE. In the founding affidavit of the interdict application incorporated into the founding affidavit in this main application, the applicant said that it only learned on 12 February 2014 that its tender was rejected because of an alleged inferior CIDB grading. It continued by saying that this was rather a surprise because of the fact that it appended a certificate for 8 CE PE to the tender application it submitted initially. It then confirms that the correct position is that on 14 December 2012 the grading was 8 CE PE. It explained the history about how it had to be renewed and that it was erroneously renewed to 7 CE and then rectified to 8 CE on applicant’s request. Applicant once again appended a letter by Mr E Moola explaining the situation.

D. ANALYSIS

No case made out by applicant

[21] I fully agree with the applicant’s counsel that the facts in the Minister of Land Affairs v Wevell matter above is distinguishable from the ones in this matter. In casu, applicant did not attach a report by an outsider, it was an affidavit by itself on the same dispute and same matter. Applicant requested that it must be incorporated to safe the volume of the record as he relied on it. By incorporating means that it forms part and parcel of this matter. This is not for a totally new dispute. This Court unlike in the Minister of Land Affairs matter is not supposed to go and look for what is relevant or not in that application. In my view the affidavit cannot be regarded as inadmissible or irregular as it does not amount to a trial by ambush. The respondent did not speculate on the possible relevance of the facts contained therein and was able to answer to the applicant’s case which is simple and straight forward.

[22] As to the submission that applicant has not set out its grounds for review in the founding affidavit which is an issue related to the above one that was raised by the respondent’s counsel, I cannot do better than to reiterate the submissions made by the applicant’s counsel in these regards, save to say that these submission by the respondent’s counsel is also devoid of substance.

Alleged Dispute of fact

[23] This issue entails the crux of the second respondent’s case. The applicant was only disqualified due to the alleged lower CIDB grading. The second respondent contended that applicant has a 7 CE with no PE status. It relied on a website printout stating the applicant’s grading as on 21 May 2013 being 7 CE. The admissibility of this computer printout was not proven by the second respondent in these proceedings as there was no certificate attached to it in terms of Section 5(4) of the Electronic Communications and Transactions Act 25 of 2002. It is not even certified. There was no evidence produced to the effect that it was made in the ordinary course of business. Therefore no reliance can be placed on it.

[24] In my view, the respondent’s denial of the applicant’s grading does not raise a real, genuine or bona fide dispute of fact. As correctly submitted by applicant’s counsel, it has been explained by the applicant that the registration of 8 CEPE status had to be renewed time and again as requested by the CIDB offices. Upon renewal application was made for a 8 CE by the applicant, but was erroneously graded 7 CE and then afterwards rectified. Applicant once again appended a letter by Mr E. Moola explaining and confirming the situation.

[25] In its answering affidavit to the interdict application, the first respondent emphasized that the information supplied by Mr Moola of the CIDB Head office dated 4 June 2013 was in sharp contrast with the information provided by the CIDB in Mafikeng offices written by Thembi Motau on the 13 November 2013. It then took this up with the CIDB Mafikeng and during the discussion it became apparent that the information received earlier from the CIDB Mafikeng was incorrect and that the information from CIDB Head office was correct. In this letter it is recorded that applicant’s grading was 8 CE PE at the time when the tender close.

[26] It seems as if the second respondent is not sure what the grading status of the applicant was despite the fact that it still disputes that it was 8 CE PE at the time the tender was closed. In its answering affidavit in this application the second respondent conceded that the applicant submitted with its tender a “certificate” for 8 CE PE. On the same breath, it further contends that the applicant subsequently alleged that its grading was 8 CE. It is not clear where did it get this information from because the applicant never indicated that its grading was 8 CE.

[27] Except the website page, it is clear that the evidence relied upon by the second respondent is hearsay evidence as the second respondent itself indicated in its opposing papers that the two officers they communicated with, Precious and Thabo could not be traced. In my view the respondent did not prove any factual basis or personal knowledge that is reliable to the effect that the applicant never had an 8 CEPE grading.

[28] On the other hand, the applicant’s contention had always been that at the time the tender closed, he had the correct grading. He even attached it in the tender application. Counsel for the applicant was able to refer to it in the bundle that contains the tender applications and the reasons that were submitted through Rule 53 by the first respondent as a sign that it was long submitted during the first round of the consideration of the tenders by the first respondent. I may pause here to say that during the oral submission by the second respondent’s counsel, a lot of criticisms were said about the applicant not being able to produce the said grading certificate that he submitted as proof even in Court that day. This was viewed by the respondent’s counsel as a sign that it was not compliant. When applicant’s

counsel pointed it out during his submissions, it came as a surprise to the second respondent’s counsel, despite the fact it was clear that it was all along incorporated in that bundle.

[29] Furthermore, the first respondent in the reasons for the decision taken by it conceded to the fact that it was misinformed and that its decision was taken on the wrong assumption. The affidavit of Mr Moola, which was used during the course of the hearing of the interdict application explained in clear terms what caused the alleged confusion. He is the Programme Manager of the CIDB Head Office and therefore the only person who can really testify first hand. He confirmed in that affidavit that applicant’s grading at close of tender was 8 CE PE. The applicant once more in this application appended a further affidavit by Moola in which he explained the position again and further confirmed the grading as being 8 CE PE.

[30] To summarize, the only admissible evidence as to the grading of the applicant is:

30.1 the applicant’s own affidavit. He is clearly in a position to testify. He made the application for grading and the grading was granted and he was informed accordingly. This is first hand evidence;

30.2 the two (2) affidavits by Mr Moola being in charge of the records and registers with regard to grading at the CIDB offices which is a Head Office to the regional office, Mafikeng;

30.3 all the other evidence relied by the second respondent are based on hearsay evidence and the affidavit in which it is alleged makes it double hearsay;

30.4 the computer printouts are inadmissible for the reasons already stated above.

[31] For this Court to find a dispute of fact clearly it must do so on admissible evidence. On the papers before me it is therefore apparent that the applicant’s grading was never 7 CE at the time the tender closed. The grading certificate it appended to its first application to tender indicates that it was 8 CEPE. The 7 CE grading was erroneous (from 5 February 2013) but was then substituted by a grading of 8 CE from the same date namely 5 February 2013 at the request of the applicant when renewing his grading. It must be remembered that the only date relevant was 14 December 2012 which is the date when the tender were closed. The second respondent’s dispute is consequently not bona fide. I am thus satisfied as to the inherent credibility of applicant’s averments in these regards.

Referring the matter back to the first respondent

[32] In addition to the above submissions, applicant’s counsel urged this Court to consider the fact that it would serve no purpose to refer the matter back to the first respondent to have the MEC take a decision. He relied on the following in support of this submission:

32.1 Section 8(1) of PAJA which provides as follows:

“A court or tribunal in proceedings for judicial review in terms of section 6(1) may grant any order that is just and equitable, including an order:

(a) directing the administrator:

(i) ...........

(ii) to act in the manner the court or tribunal requires.”

32.2 The case of Livestock and Meat Industries Control Board v Garda, 1961 (1) SA 342 (A) at 349 G wherein the court said:

“........the court has a discretion, to be exercised judicially upon a consideration of the facts of each case, and ....... although the matter will be sent back if there is no reason for not doing so, in essence it is a question of fairness to both sides.”

32.3 The case of Hartman v Chairman Board for Religious Objection, 1987(1) SA 922 (O) wherein the court found that since the board would be bound by the interpretation placed on a certain phrase in the Defence Act (44 of 1957) there was no point in remitting the matter to the board for reconsideration.

32.4 The case of Premier Province of Mpumalanga v Executive Committee Association of Governing Bodies of State Aided Schools, Eastern Transvaal, 1999 (2) SA 91 (CC), par. 52 wherein the court was of the opinion that there was no point in referring the matter back and made a decision itself.

32.5 The case of RHI Joint Venture v Minister of Roads and Public Works, 2003 (5) BCLR 544 CK wherein the applicant applied for a decision to set aside a tender awarded to the third respondent and for an order that the tender be awarded to the applicant. The court said:

“In my view, on the information that was before it, and had the Tender Board applied the provisions of the Act (Preferential Procurement

Policy Framework Act) in a proper manner, it was obliged to award the tender to the applicant. I can see no purpose, therefore, in referring the matter back to the Tender Board for reconsideration.”

32.6 The case of Johannesburg City Council v Administrator Transvaal, 1969 (2) SA 72 (T) at 77 wherein the court said:

“.........is of course not purely a matter of fixing the blame for the loss of time. The object is to minimize future loss of time.”

32.7 The case of Local Road Transportation Board v Durban City Council, 1965 (1) SA 586 (A) at 598 – 599 wherein the court held:

“........if the order were that the matter be remitted to the Local Board for reconsideration, it would be cutting things to fine in point of time – the old year would be almost out.”

32.8 The case of Theron v Ring Van Wellington Van die NG Sendingkerk in Suid-Afrika, 1976 (2) SA 1 (A) op 31 wherein the Court indicated that:-.

“Where the court is in as good a position as the original decision maker to make the decision the court will take the decision itself.”

[33] The only submission the first respondent’s counsel made in answer to the above applicant’s submissions was to the effect that the applicant cannot be granted this prayer as they did not deal with it in its founding affidavit. This submission by the first respondent’s counsel is not justified and depicts a lack on the part of the respondent’s counsel to comprehend the papers thoroughly. In paragraph 24 and 25 of the founding affidavit the applicant dealt pertinently with this issue. The information that I will deal with in the paragraphs

that follows was put before this Court by the applicant’s counsel to justify the granting of the tender to the applicant.

[34] The Constitution of the Republic of South Africa, 108 of 1996 (The Constitution) provides for the following in section 217(1):

“217 Procurement –

(i) When an organ of state in the national provincial or local sphere of government or any other institution identified in national legislation contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost effective.”

[35] Section 217(3) of the Constitution provides that national legislation must prescribe a framework within which a policy referred to in section 217(2) may be implemented. Section 2(1) of the Preferential Procurement Policy Framework Act, 5 of 2000 (the PPPFA) was enacted in terms of section 217(3) of the Constitution and in terms of section 2(1) thereof the first respondent must apply the principles set out in PPPFA when procuring goods or services.

[36] The PPPFA provides for the following in Section 2(1) (a) thereof:

“An organ of state must have a preferential procurement policy and must implement it within the framework prescribed by the said Act.

A preference point system must be followed for contracts on the basis of 10 points to be allocated for specific goals and 90 points for price.”

[37] The Minister of Finance promulgated the 2001 regulations in terms of the PPPFA, in GN R725 of 10 August 2001. These regulations already contained the relevant provisions. The Minister however promulgated the 2011 regulations in terms of the PPPFA namely, Regulations R502 of 8 June 2011 which came into operation on 7 December 2011.

37.1 Regulation 6(1) of these procurement regulations also provides for a preference points system in accordance to the 90/10 point system.

37.2 Section 172 of the Constitution provides that conduct inconsistent with the Constitution is invalid and the court must declare such conduct invalid to the extent of its inconsistency and may grant consequential relief.

[38] It is of utmost importance to take note of section 2(1)(f) of the PPPFA which provides for the following:

“the contract must be awarded to the tenderer who scores the highest points, unless objective criteria in addition to those contemplated

in paragraph (d) and (e) justify the award to another tenderer.”

This stipulation is also contained in the 2001 regulation namely regulation 6(4). The 2011 regulations in regulation 6(5)

provides for exactly the same.

[39] Section 2 of the PPPFA prescribes that an organ of state must determine its preferential procurement policy and implement it within the framework recorded in that section. It reads as follows:

“(a) a preference point system must be followed:

(i) for contracts with a rand value above a prescribed amount a maximum of 10 points may be allocated for specific goals as contemplated in paragraph (d) provided that the lowest acceptable tender scores 90 points for price.”

The value prescribed is R1 million.

“(c) any other acceptable tenders which are higher in price must score fewer points on a pro rata basis, calculated on their tendered prices in relation to the lowest acceptable tender, in accordance with a prescribed formula.”

See also: Moseme Road Construction CC v King Civil Engineering Contracts (Pty) Ltd, 2010 (4) SA 359 (SCA).

[40] Regulation 7 provides:

“A contract may be awarded to a tenderer that did not score the highest total number of points only in accordance with section 2(1)(f).”

[41] I am of the view that with this information available before me, this Court is in as good position as the original decision maker to take a decision itself. It is quite clear that the decision to award the tender to the second respondent is to be set aside. If this Court refers the matter to the first respondent for reconsideration once more, the end result will be a foregone conclusion. It is common cause that the applicant’s price was almost R30 million less than the second lowest price being the price tendered by the second respondent. On this basis, the applicant will score 90 points and the second respondent only 70,6 points for price. The second respondent’s points for BBBEE scored in terms of the Bid Evaluation Report were 9 (in terms of the regulations 9 points are to be awarded to the holder of a 2B-BBBEE status level of contributor. If applicant’s tender was considered applicant would have scored 8 points for BBBEE. The applicant’s status is 3 and in terms of the regulations it is accordingly entitled to 8 points. The result will be that the applicant will score 98 points and the second respondent only 79.6 points. This will result in the first respondent not having any choice but to award the tender to the applicant.

[42] In Allpay Consolidated v Chief Executive Officer SASSA, 2014 (1) SA 604 (CC) at 614 B the court ruled:

“(23) To the extent that the judgment of the Supreme of (sic) Court of Appeal may be interpreted as suggesting that the public interest in procurement matters requires greater caution in finding that grounds for judicial review exist in a given matter, that misapprehension must be dispelled. So too the notion that even if proven irregularities exist, the inevitability of a certain outcome is a factor that should be considered in determining the validity of administrative action.

(24) This approach to irregularities seems detrimental to important aspects of the procurement process. First, it undermines the role procedural requirements play in ensuring even treatment of all bidders. Second it overlooks that the purpose of a fair process is to ensure the best outcome; the two cannot be severed. On the approach of the Supreme Court of Appeal procedural requirements are not considered on their own merits, but instead trough the lens of the final outcome. This conflates the different and separate questions of unlawfulness and remedy. If the process leading to the bid’s success was compromised, it cannot be known with certainty what course the process might have taken had procedural requirements been properly observed.

(25) Once a ground of review under PAJA has been established there is no room for shying away from it. Section 172(1)(a) of the Constitution requires the decision to be declared unlawful. The consequences of the declaration of unlawfulness must then be dealt with in a just and equitable order under s 172(1)(b).”

[43] In the first respondent’s answering affidavit under case no M50/2014 the following were said:-

“21. This Honourable Court would have noted from the Applicant’s papers and from the brief background sketched above that this tender has a bit of an unfortunate history dating back from the first challenge launched by the second respondent.

22. The delays in the execution of the project are not only prejudicial to the department but have serious consequences for the community of Maphoitsile and Magogong in Taung who have even took to the streets in protest as a result of the delays concomitant with the challenges encountered in this project.

23. As the department, we are very much concerned of the consequences of the impending legal challenge and the unavoidable delay in the implementation of the project on the community.

24. It is therefore my humble submission that this Honourable Court should consider this application having regard to the unfortunate events following the setting aside of the initial award as against the expectations and needs of the communities who have been exercising their patience for almost two years.

25. On the basis of the need to execute and implement this project as soon as possible, the department respectfully urges this Honourable

Court to consider abridging the time period within which the applicant is to launch the review application. The issues are simply

straight forward and the facts are mainly common cause amongst the parties.”

E. CONCLUSION

[44] I am of the view that on the information that is before me, and as the first respondent has already conceded that the issue of the grading was the only thing that disqualified the applicant, it is clear that the applicant tender was in all responsive, that the applicant’s price was about R30 million less than the second lowest tender’s price and lastly, that applicant should have been awarded the tender. It is almost a year now since I granted the first interim interdict concerning the same matter on the 9 May 2013 although to a different applicant at that time (UMSO), who is the second respondent in the current matter. A further delay will cause undue prejudice to the community of Magogong and Maphoitsile as indicated by the first respondent.

F. ORDER

[45] Consequently the following order is made:-

45.1 The first respondent’s decision to award tender no. PWRT 391-10B (1) taken on or before 12 February 2014 is hereby reviewed and set aside;

45.2 The tender referred to in paragraph 45.1 is awarded to the applicant;

45.3 The first and the second respondents are ordered, jointly and severally the one paying the other to be absolved, to pay the costs of the interdict application including costs previously reserved occasioned by postponement(s) of the application if any.

45.4 The second respondent is further ordered to pay the costs of the review application, including costs previously reserved occasioned by postponement(s) of the review application if any .

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A M KGOELE

JUDGE OF THE HIGH COURT

ATTORNEYS:

FOR THE APPLICANT

: Minchin & Kelly Inc.

19 Constantia Street

Riviera Park

MAHIKENG

FOR THE RESPONDENT : Justice Chambers

44 Shippard Street