Vodacom (Pty) Ltd and Another v Nelson Mandela Bay Municipality and Others (137/10) [2010] ZAECPEHC 34; 2012 (3) SA 240 (ECP) (17 June 2010)

Vodacom (Pty) Ltd and Another v Nelson Mandela Bay Municipality and Others (137/10) [2010] ZAECPEHC 34; 2012 (3) SA 240 (ECP) (17 June 2010)

The Court found that the tender process was fundamentally defective and unlawful due to the bid evaluation committee permitting non-compliant bidders to correct their tenders after the closing date. The award to MTN was irregular and could not stand. However, the municipality retained the right under its supply chain policy to abort the process and call for fresh tenders when only one compliant bid remained. The mere fact that Vodacom was the only compliant bidder did not entitle it to automatic award of the tender. The Court held that remittal, not substitution, was the appropriate remedy, as the circumstances were not so exceptional as to warrant the Court usurping the municipality's...

Citation
[2010] ZAECPEHC 34
Parties
Applicant: Vodacom (Pty) Ltd; Applicant: Mfuleni Investment CC; Respondent: Nelson Mandela Bay Municipality; Respondent: MTN Service Provider (Pty) Ltd; Respondent: Nashua Mobile (Pty) Ltd; Respondent: 3V ICT Solutions CC
Court
Eastern Cape High Court, Port Elizabeth
Jurisdiction
South Africa
Judgment Date
17 June 2010
Case Number
137/10
Procedural Posture
Urgent Application / Final Determination of Review and Substitution/remittal After Interim Interdict
Outcome
The award of tender 188 of 2009 to MTN is reviewed and set aside. The tender is remitted to the municipality for reconsideration under specified conditions. Costs awarded to Vodacom against the municipality; MTN to pay its own costs.
Judges
Grogan
Legal Topics
Tender Review, Promotion of Administrative Justice Act, Preferential Procurement Policy Framework Act, Remittal Vs Substitution, Municipal Supply Chain Policy, Procedural Fairness
Administrative Law Civil Procedure Commercial and Corporate Tender Review Promotion of Administrative Justice Act Preferential Procurement Policy Framework Act Remittal Vs Substitution Municipal Supply Chain Policy +1 more

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Parties

Vodacom (Pty) Ltd

Applicant

Mfuleni Investment CC

Applicant

Nelson Mandela Bay Municipality

Respondent

MTN Service Provider (Pty) Ltd

Respondent

Nashua Mobile (Pty) Ltd

Respondent

3V ICT Solutions CC

Respondent

Procedural Posture

Urgent Application / Final Determination of Review and Substitution/remittal After Interim Interdict

Legal Issues

  1. 1 Whether the award of tender 188 of 2009 to MTN was unlawful and should be set aside.
  2. 2 Whether the Court should substitute its own decision for that of the municipality or remit the matter for reconsideration.
  3. 3 Whether the municipality's conduct exhibited bias or fraud sufficient to preclude remittal.

Ratio Decidendi

The Court found that the tender process was fundamentally defective and unlawful due to the bid evaluation committee permitting non-compliant bidders to correct their tenders after the closing date. The award to MTN was irregular and could not stand. However, the municipality retained the right under its supply chain policy to abort the process and call for fresh tenders when only one compliant bid remained. The mere fact that Vodacom was the only compliant bidder did not entitle it to automatic award of the tender. The Court held that remittal, not substitution, was the appropriate remedy, as the circumstances were not so exceptional as to warrant the Court usurping the municipality's...

Court Disposition

The award of tender 188 of 2009 to MTN is reviewed and set aside. The tender is remitted to the municipality for reconsideration under specified conditions. Costs awarded to Vodacom against the municipality; MTN to pay its own costs.

Orders

  • The award to the second respondent of tender 188 of 2009 is reviewed and set aside.
  • The tender is remitted to the first respondent for reconsideration on the following conditions: (a) the tender shall be re-advertised in accordance with paragraphs 19, 20, 21, 22 and 27 of the municipality's Supply Chain Management Policy; (b) tenders shall not be restricted to previous bidders; (c) previous tender...