Telkom SA Limited v Merid Trading (Pty) Ltd and Others (27974/2010,25945/2010) [2011] ZAGPPHC 1 (7 January 2011)

Telkom SA Limited v Merid Trading (Pty) Ltd and Others (27974/2010,25945/2010) [2011] ZAGPPHC 1 (7 January 2011)

The court held that once the validity period for tender proposals expired without an award, the tender process was complete and the applicant could not lawfully negotiate with selected respondents. Any extension of validity after expiry did not comply with constitutional and statutory requirements for fairness, transparency, and competitiveness. No binding contract arose as the award letters were conditional upon signature of a formal agreement, which never occurred. The applicant's delay in bringing review proceedings was unreasonable but should be overlooked in the interests of legality, as no party acted on an unlawful contract. The award and acceptance of the tenders were declared...

Citation
[2011] ZAGPPHC 1
Parties
Applicant: Telkom SA Limited; Respondent: Merid Trading (Pty) Ltd; Respondent: Biz Africa 1944 (Pty) Ltd; Respondent: Plessey/Hezeki Joint Venture Company; Respondent: Fortel Investments CC; Respondent: Bihati Solutions (Pty) Ltd; Respondent: Mthiyane Seyama Projects; Applicant: Bihati Solutions (Pty) Ltd; Respondent: Telkom SA Limited; Respondent: Plessey (Pty) Ltd; Respondent: Hezeki Contracting (Pty) Ltd; Respondent: Merid Trading (Pty) Ltd t/a Vuka Enterprises; Respondent: Mthiyane Construction CC; Respondent: Seyama Solution and Plant Hire (Pty) Ltd; Respondent: Gio Construction and Plant Hire (Pty) Ltd; Respondent: Worldtel (Pty) Ltd; Respondent: Motata Telecommunications (Pty) Ltd; Respondent: Japp Construction (Pty) Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
7 January 2011
Case Number
27974/2010,25945/2010
Procedural Posture
Review Application / Judgment After Hearing of Consolidated Applications
Outcome
Main application granted; related application dismissed.
Judges
B.R. Southwood
Legal Topics
Public Procurement, Promotion of Administrative Justice Act, Constitutional Tender Requirements, Judicial Review Delay, Contractual Validity in Tender, Declaratory Relief
Administrative Law Civil Procedure Commercial and Corporate Public Procurement Promotion of Administrative Justice Act Constitutional Tender Requirements Judicial Review Delay Contractual Validity in Tender +1 more

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Parties

Telkom SA Limited

Applicant

Merid Trading (Pty) Ltd

Respondent

Biz Africa 1944 (Pty) Ltd

Respondent

Plessey/Hezeki Joint Venture Company

Respondent

Fortel Investments CC

Respondent

Bihati Solutions (Pty) Ltd

Respondent

Mthiyane Seyama Projects

Respondent

Bihati Solutions (Pty) Ltd

Applicant

Telkom SA Limited

Respondent

Plessey (Pty) Ltd

Respondent

Hezeki Contracting (Pty) Ltd

Respondent

Merid Trading (Pty) Ltd t/a Vuka Enterprises

Respondent

Mthiyane Construction CC

Respondent

Seyama Solution and Plant Hire (Pty) Ltd

Respondent

Gio Construction and Plant Hire (Pty) Ltd

Respondent

Worldtel (Pty) Ltd

Respondent

Motata Telecommunications (Pty) Ltd

Respondent

Japp Construction (Pty) Ltd

Respondent

Procedural Posture

Review Application / Judgment After Hearing of Consolidated Applications

Legal Issues

  1. 1 What is the legal consequence of a public body failing to accept tender proposals within the stipulated validity period.
  2. 2 Whether the tender process complied with section 217 of the Constitution and PAJA.
  3. 3 Whether the validity period of the proposals was lawfully extended.

Ratio Decidendi

The court held that once the validity period for tender proposals expired without an award, the tender process was complete and the applicant could not lawfully negotiate with selected respondents. Any extension of validity after expiry did not comply with constitutional and statutory requirements for fairness, transparency, and competitiveness. No binding contract arose as the award letters were conditional upon signature of a formal agreement, which never occurred. The applicant's delay in bringing review proceedings was unreasonable but should be overlooked in the interests of legality, as no party acted on an unlawful contract. The award and acceptance of the tenders were declared...

Court Disposition

Main application granted; related application dismissed.

Orders

  • The applicant's decision of 14 November 2008 to accept the proposals and award RFP0101/2007 to the six respondents is reviewed and set aside.
  • It is declared that the acceptance of the proposals and award of the tender to the six respondents is null and void and of no force or effect.