Philips South Africa Commercial (Pty) Ltd v State Information Technology Agency Ltd and Others (22/20305) [2024] ZAGPPHC 1379 (10 December 2024)

begin wrapper begin container begin header begin slogan-floater end slogan-floater - About SAFLII About SAFLII - Databases Databases - Search Search - Terms of Use Terms of Use - RSS Feeds RSS Feeds end header begin main begin center # South Africa: North Gauteng High Court, Pretoria South Africa: North Gauteng High Court, Pretoria You are here: SAFLII >> Databases >> South Africa: North Gauteng High Court, Pretoria >> 2024 >> [2024] ZAGPPHC 1379 | Noteup | LawCite sino index ## Philips South Africa Commercial (Pty) Ltd v State Information Technology Agency Ltd and Others (22/20305) [2024] ZAGPPHC 1379 (10 December 2024) Philips South Africa Commercial (Pty) Ltd v State Information Technology Agency Ltd and Others (22/20305) [2024] ZAGPPHC 1379 (10 December 2024) Download original files PDF format RTF format make_database: source=/home/saflii//raw/ZAGPPHC/Data/2024_1379.html sino date 10 December 2024 REPUBLIC OF SOUTH AFRICA IN THE HIGH COURT OF SOUTH AFRICA GAUTENG DIVISION, PRETORIA Case Number: 22/20305 Reportable:                                YES / NO Circulate to Judges:                                YES / NO Circulate to Magistrates:                   YES / NO Circulate to Regional Magistrates: YES / NO In the matter between: PHILIPS SOUTH AFRICA COMMERCIAL (PTY) LTD Applicant AND STATE INFORMATION TECHNOLOGY AGENCY LTD First Respondent MEMBER OF THE EXECUTIVE COUNCIL FOR HEALTH, GAUTENG Second Respondent SIEMENS (PTY) LTD Third Respondent SIEMENS HEALTHCARE (PTY) LTD Fourth Respondent JUDGMENT MAAKANE AJ INTRODUCTION [1]   The applicant (“Philips”), seeks among others to have a tender known as RFB2186/2020 reviewed and set aside. The tender was awarded to the fourth respondent (“Siemens Health”) by the Gauteng Department of Health (“GDoH”). Philips is an unsuccessful bidder in the said tender. In its initial Notice of Motion issued on 7 April 2022 , Siemens Health was not cited. However, in its subsequent and amended Notice of Motion, Philips sought among others, to join Siemens Health as the fourth respondent. The application to join fourth respondent is not opposed. In fact, it appears to be common cause that Siemens Health is the correct entity that submitted the bid. It is also the entity that was specifically recommended by SITA, and subsequently appointed as preferred bidder by the GDoH. I am therefore satisfied that Siemens Health is the entity to which the tender was awarded and is accordingly joined as the fourth respondent. [2]    Relief sought in the said amended Notice of Motion has been set out as follows: 1. “ Joining Siemens Healthcare (Pty) Ltd as the Fourth Respondent. 2. Declaring that the First Respondent’s alternatively, the Second Respondent’s further alternatively the First and Second Respondents’ decision to award tender RFB 2186/2020 for the Provision of a Fully Manged Enterprise Picture Archiving and Communication System for the Gauteng Department of Health with Maintenance and Support for a Five-Year Period to the Third Respondent alternatively the Fourth Respondent on 31 August 2021 (“Tender Award”) is unlawful and invalid. 3. Reviewing and setting aside the First Respondent’s alternative, the Second Respondent’s further alternatively the First and second Respondents’ award of tender RFB 2186/2020 for the Provision of a Fully Manged Enterprise Picture Archiving and Communication System for the Gauteng Department of Health with Maintenance and Support for Five-Year Period to the third Respondent alternatively the Fourth Respondent on 31 August 2021 . 4. Directing that the First Respondent alternatively, the Second Respondent further alternatively the First and second Respondents readvertise a request for bids for the provision of a Fully Manged Enterprise picture Archiving and Communications System for the Gauteng Department of Health with Maintenance and Support for a Five-Year Period with such directions as the Court deems. 5. Costs. 6. Further and / or alternative relief.” [3]   The application is brought in terms of the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”) The different grounds of review are based on various provisions of that act. [4]   Only the first respondent, (“SITA”) is opposing the application and has filed an answering affidavit as well as heads of argument. Second respondent does not oppose the application, but has however, filed a Notice to Abide, as well as an explanatory affidavit. Third and fourth respondents did not participate in the proceedings. For the sake of convenience, I will refer to the parties by their respective names, and to the second respondent as the GDoH or simply, the department. BACKGROUND [5]   The Gauteng Department of Health (“the GDoH”) comprises of a number of hospitals as well as Health Care centres and clinics. These include nine hospitals, six specialised hospitals, three tertiary hospitals and four central hospitals. Over and above these, the department has under its control about three hundred and seventy-two primary health care facilities, which include thirty-three community health care centres. [6]    During May 2020 , the GDoH sought to and approved a business case for it to acquire services involving provision of fully managed enterprise Picture Archiving and Communication System (“the PAC System”) with maintenance and support for a period of five (5) years (“the bid”). The PAC System sought was to be utilised by all the health facilities mentioned above, to render radiology services to needy patients. The budget for the bid was approximately R200 Million. [7]   It is common cause that the Department then approached SITA, to facilitate the procurement process. During June 2020 , SITA was duly notified by the Department to open the bids. It did so and opened the RFB on 3 July 2020 . The initial closing date for these bids was 24 July 2020 . During the period between 13 July 2020 to 17 July 2020 , prospective bidders excluding Philips requested that the closing date be extended. For this reason, Ms Emma Mmatli (“Ms Mmatli”) SITA’s Senior Procurement Officer forwarded a request to Sita’s Executive Officer: Supply Chain Management for the closing date of the bids to be extended to 31 July 2020 . This request was approved. As at that date, a total of thirteen bids had been submitted. These include the bids of both Philips and Siemens Health. [8]   Following the closing date, the initial tender evaluation process commenced on 12 August 2020 and was finalised on 27 August 2020 . This initial technical process entailed firstly the administrative pre-qualification verification stage and secondly, the technical mandatory requirements. During the period between 19 August 2020 and 27 August 2020 the officials conducted the price and B-BBEE evaluations. [9]   On 23 October 2020 Ms. Mmatli addressed a letter to Siemens Health seeking further information or clarification in relation to their bid. This was done in terms of paragraph 17.7.2(h) of SITA’s SCM policy, read with paragraph 6.4 of the conditions of the bid. The clarification sought from Siemens Health relate to firstly, the date on which the partnership with the OSM was established; and secondly confirmation as to whether or not Siemens Health complied with MIOS requirements. Siemens Health responded by way of a letter dated 26 October 2020. Clarifications were also sought from other bidders. Similarly, on 21 January 2021 , SITA’s Head of Department: SCM addressed a letter to Philips seeking clarification on their bid.  The clarification sought from Philips relates to subcontracting, which it reflected in its bid document as 14% instead of the mandatory 30% as provided for in paragraph 6.3 of the bid conditions which Philips had accepted. Philips responded to this request for clarification by way of a letter dated 22 January 2021 . [10]     On 27 October 2020 SITA’s Head of Department; Strategic Research addressed a letter to all participating bidders at the time, seeking from them consent that the bid validity period be extended from 29 November 2020 to 28 January 2021 . It is also common cause that further and other extensions were sought. All in all, a total of about seven such extensions were sought. [11]     Prior to the BEC submitting its recommendations to the Executive Bid Adjudication Committee (“the EBAC”), SITA appointed an external service provider namely Pinakle P Consulting (“Pinakle”) specifically to conduct an integrity review of the procurement process. Following this appointment, Pinakle in its report, raised certain integrity and compliance issues pertaining to the procurement process. In response, the Supply Chain Management Committee (“the SCM)” referred the matter back to the BEC for reconsideration. The BEC reconsideration started on 21 January 2021 and was concluded on 27 January 2021 . Their Revised Technical Evaluation Report was approved on 1 February 2021. Siemens Health’s bid was the only bid that they found to have complied with the mandatory requirements. [12]     On 13 February2021 , the EBAC took a resolution to recommend to the SITA Board that the tender be awarded to Siemens Health at an amount of R248 324 885-85. I may just add that in the meantime, the Department had approved an additional budget of R48 324 885-85. During its Board meeting SITA resolved to approve the recommendation to the accounting officer that the tender be awarded to Siemens Health at a cost of R248 324 885-85. This award was subject to the condition that SITA’s SCM further negotiate a price reduction with Siemens Health. During the period between 11 February 2021 and 22 February 2021 , SITA and Siemens Health got engaged in negotiating the price of R248 324 885-85 initially set out it its bid. In their letter dated February 2021 , Siemens Health proposed a revised price of R223 712 829-05. In response, and following further negotiations, Siemens Health was requested to once again review and revisit the amount proposed. On 22 February 2021 Siemens Health came up with a further revised price of R198 655 759-13. [13]     On 8 March 2021 SITA’s Executive: SCM addressed a letter to the Accounting Officer of the Department, recommending that the tender be awarded to Siemens Health at a price of R198 655 759-13 (including VAT) Various supporting documents were attached to the letter, for the attention of the Department. Once the recommendation was accepted by the Department SITA had to be informed in writing and would then attend to the publication of the award. [14]     The recommendation was accepted by the Department. On 19 August 2021 , the Accounting Officer, at that time, addressed a Letter of Award to Siemens Health. This was accepted by Siemens Health on 31 August 2021 . On the same day, following the acceptance, SITA approved the Notification of the Award, and thereafter had it published. ISSUES [15]     There are three (3) main issues for determination by this court. The first issue is whether or not any one or more acts or steps taken by the Department and or SITA during the procurement processes referred to and complained of by Philips constitute reviewable irregularities in terms of PAJA.  Secondly, if so whether the decision of the Department to appoint Siemens Health as a preferred bidder ought to be reviewed and set aside. Thirdly, in that event, what would be a just and equitable remedy or order to be made, under those circumstances. GROUNDS OF REVIEW [16]     The grounds of review are based on various provisions of PAJA.  Philips contentions are by way of summary to the following effect: (a)  Section 6 (2) (c) of PAJA Procedural unfairness in that SITA gave and affored an opportunity to Siemens Health to augment or amend its bid, with the result that its bid was no longer non-compliant, yet such an opportunity was not afforded to other bidders. (b) Section 6 (2) (e) (iv) and of PAJA Dereliction of roles and responsibilities in that SITA failed to take its own independent decision, but merely accepted and rubber-stamped a decision taken by a third party, namely Pinakle. (c)Section 6 (2) b and (i) of PAJA Unlawful extensions of the bid validity period in that SITA asked some bidders, but not all of them to extent the bid validity period. Again, the award of the tender was done long after the bid validity period of 120 days had already expired. (d) Section 6 (2) (b) and (d) of PAJA Improper conduct by SITA in that it failed to ensure a lawful process with the result that the tender was awarded to the most expensive bidder. PARTIES’ SUBMISSIONS . Applicant Procedural unfairness: [17]      In his submissions, Counsel for Philips Mr Govender raised firstly, the issue of procedural fairness . He submitted that the process followed by SITA was procedurally unfair in that Siemens Health was given an unfair opportunity to argument its bid. More specifically, this unfair opportunity relates to a letter dated 23 October 2020 addressed to Siemens Health seeking from it to explain or clarify information relating to the date on which its partnership with OSM was established and also whether or not it complied with MIOS requirements. He contended that as at the close of the tender on 31 August 2020 , the bid submitted by Siemens Health did not include a date on which partnership with the Original Software Manufacturer (“the OSM”) was concluded. Again, the bid did not comply with Government Minimum Interoperability Standards (“the MIOS”). The evaluation process that was carried out by the BEC, established by SITA and comprising of officials from the GDoH, was divided into two phases namely, the pre-qualification and the technical mandatory Phase. In the pre-qualification phase the BEC found that all bidders, accepted the special conditions of the bid. He submitted that this finding is incorrect in that Siemens Health did not confirm compliance with MIOS. [18]      Regarding the technical requirements, the BEC concluded that three bidders had complied. These are Siemens Health, Philips and Kunene. In respect of Kunene the BEC found that it did not indicate any sub-contracting. Again, there was no affidavit filed confirming that its system adheres to the National Health Mirative Standards Framework for Interoperability in Health. Same goes for evaluation in respect of the B-BBEE. According to Philips, there was for this reason, a recommendation by the Head of the Department: Supply Chain Management dated 25 September 2020 for the award of the tender to Philips. [19]     However, before such a recommendation could be made, SITA engaged Pinakle to conduct the integrity of the entire procurement process. In its report Pinakle found that the pre-screening report in terms of which a finding was made that all bidders have complied with the mandatory screening requirements was incorrect in that two (2) entities, namely Batho Phahameng Trading CC as well as Abaphumeleli Trading 1193 had not done so. It again found that three (3) further bidders namely Neo Solutions (Pty) Ltd, Ulwembu La Se Kasi Holdings (Pty) Ltd and Batho Phahameng Trading CC should not have been considered for further evaluation, as they had not accepted the RFB special conditions. Pinakle also found, contrary to the BEC’s that Kunene and Philips had not complied with mandatory requirements with the results that only Siemens Health did. [20]     He submitted that this subsequent finding by Pinakle is wrong in that, Pinakle asked SITA to require from Siemens Health, clarity on “ Date partnership was established with OSM. The bidder did not indicate whether they comply or not with MIOS requirements as stated under the special conditions of the contract”. On this basis, so goes the argument, Siemens Health should have been disqualified because its bid did not meet the technical requirements of the bid. However, instead Siemens Health was afforded a further opportunity to correct its bid to make it fully compliant. This opportunity was not afforded or extended to any other bidder. [21]     He referred in this regard to the case of Metro Projects CC and Another v Klerkdrop Municipality and Others 2004 (1) SA 16 (SCA) and specifically paragraph 14 thereof, where the following was said: “ [14] Was the tender process followed in the present case fair? A high-ranking municipal official purported to give the ninth respondent an opportunity of augmenting its tender so that its offer might have a better chance of acceptance by the decision-making body. The augmented offer was at first concealed from and then represented to the mayoral committee as having been the tender offer. It was accepted on that basis. The deception stripped the tender process of an essential element of fairness: the equal evaluation of tenders. Where subterfuge and deceit subvert the essence of a tender process, participation in it is prejudicial to every one of the competing tenderers whether it stood a chance of winning the tender or not. ” [22] SITA’s dereliction of its roles and responsibilities : He submitted that taking into account the role played by Pinakle as set out above, SITA has failed to exercise and take its own independent decision. On the contrary, it merely and simply rubber stamped the decision of Pinakle. In this way therefore the decision to award and or rather recommend the award of the tender to Siemens Health was taken by Pinakle and not SITA. [23] Bid validity extensions : He contended that there was a total seven extensions. This is common cause. The bid was valid for 120 days calculated from the day the tender closed on 31 August 2020 . As a result, the bid validity period ended on 28 November 2020 . As at that date there was a total of thirteen bidders. While the terms of the bid made provision for extensions, each such an extension could only take effect after all bidders have given their written consent. In this instance, so goes the argument some but not all bidders did agree or consent to all such extensions. As I understand him it was a requirement that SITA obtain the consent of all thirteen initial bidders on each and every occasion when an extension was sought. In this case, SITA did not obtain the consent of each such bidder on each occasion it sought an extension. In the second place, the tender was awarded outside the validity period of 120 days, [24]     He referred to the case of Telkom SA Limited v Merid Trading (Pty) Ltd 2011 JRD 0004 (GNP) where the following was said: “ As soon as the validity period of the proposals had expired without the applicant awarding a tender, the tender process was complete – albeit unsuccessfully – and the applicant was no longer free to negotiate with the respondents as if they were simply attempting to enter into a contract. The process was no longer transparent, equitable or competitive. All the tenderers were entitled to expect the applicant to apply its own procedure and either award or not award a tender within the validity period of the proposals. If it failed to award a tender within the validity period of the proposals it received, it had to offer all interested parties a further opportunity to tender. Negotiations with some tenderers to extend the period of validity lacked transparency and was not equitable or competitive. In my view the first and fifth respondent’s reliance only on rules of contract is misplaced.” [25] SITA’s Improper Conduct and its failure to ensure a lawful process : He submitted further that, in respect of pricing the same thing happened. On 11 February 2021 , when all other bidders had been excluded from the tender process, SITA addressed a letter to Siemens Health. The letter sought to inform Siemens Health that a bench marking exercise showed that service providers of similar services, do so at 20% below the pricing. The parties thereafter entered into a process of negotiating the price post the award of the tender. This, he submitted, was unfair because Siemens Health was treated favourably in that it was allowed to revise its price. More specifically Siemens Health was allowed two opportunities to revise its pricing, firstly down from R248 324 885-85 to R223 712 829-05 and later, further down to R198 655 759-13. [26]      He submitted that under the circumstances there was improper conduct and SITA has failed to ensure that the tender process was lawful. That being the case, the tender should be declared unlawful and be reviewed and set aside.  Having done so, a just and equitable remedy is that SITA be directed to start the entire procurement process afresh. FIRST RESPONDENT’S SUBMISSIONS [27]     As regards the first ground of the review namely procedural fairness , Mr Bhana SC submitted that applicant’s contention that SITA’s decision is in terms of section 6 (2) (b) of PAJA not procedurally fair is without merit. This relates to Pinakle’s report to the effect that “ a clarification should be obtained on date the partnership was established with CSM before they can fully meet the technical mandatory requirements.” [28]     He submitted that in this regard applicant’s reliance on Metro Project (Supra) is misplaced, because that case is distinguishable. On the facts of Metro Projects, a bidder was permitted by a municipal official to augment its bid or tender offer in a manner that was deceptive, and which deception was thereafter concealed. This was the factual finding of the SCA. The deception was done with the purpose of ensuring that the bid in question appears more favourable, much to the prejudice of all other bidders. [29]     He further referred specifically to paragraph 17.7.2 of the SCM Policy as well as paragraph 6.4 of the conditions of bid section of the RFB, both of which permit and allow the seeking of additional information and or clarification from a bidder in writing. On this basis therefore, the seeking of clarification was fully permissible and therefore justified. [30]     He also referred to SITA’s answering affidavit and pointed out that even in respect of Philips, a similar clarification was sought. This clarification concerned a contradiction that appeared in its bid, concerning the percentage of sub-contracting. Over and above that, clarifications were also sought from other bidders such as Axim in the course of the procurement process. Each such written request for clarification as well as written responses from respective bidders have all been recorded by Pinakle in their report. All of these therefore, constitute sufficient evidence to dispel any assertion that Siemens Health was treated more favourable than other bidders. [31] SITA’s dereliction of its duties: He submitted that the decision to appoint Siemens Health was taken by the Department and not SITA and or Pinakle as contended by Philips. For this reason, the argument that the decision is reviewable under section 6 (2) (e) (iv) of PAJA is without merit. Similarly, the recommendation to the Department to appoint Siemens Health was made by SITA and not Pinakle. [32]     He referred to Paragraph 13.9 (a) of the SCM Policy and points out that this regulation makes provision for and authorises SITA to appoint an external advisor and or consultant to provide professional advice. He also referred to paragraph 13 (1) (b) which provides for the establishment of a Recommendation Committee whose responsibilities include the verification of compliance with all procurement processes and also in a general sense, the integrity of the entire procurement process. Equally so, paragraph 13.7 (b) provides for an audit process integrity review for bids over R100 Million. In short therefore, Paragraph 13.7 of the SCM Policy, provides for and allows appointment of external service providers and or consultants to assist SITA in the discharge of their role and duties pertaining to procurement processes. SITA did not, therefore simply follow or rubber stamp, the findings of Pinakle. In this regard, he went on to point out the respects in which SITA made amendments and or disagreed with or deviated from Pinakle’s report. [33] Extensions of the bid validity period: He denied Applicant’s assertion that the award was unlawful and or that the tender was awarded in contravention of section 6 (2) (1) of PAJA. More specifically, he submitted that it is not correct that firstly, the award was made notwithstanding the fact that not all bidders had communicated their approval of the extension of the bid validity period. In the second place, that the tender was awarded after the bid validity period had expired. [34]     He argued and referred to paragraph 17.7.2 of the SCM Policy which specifically makes provision for extensions of the bid validity period. In the second place he referred to the Bid Specifications which provide among others to the following effect: “ (f) The validity period of a bid should allow a minimum of 120 days from the closing date of the bid. Validity extension periods must be requested for and agreed to in writing/ electronic by all bidders;” (g) A fair and transparent process shall be followed for the closing, receiving, opening and process of bids;” [35]     The initial closing date set out in the RFB, that is after 120 days from the closing date was 24 July 2020 . This was subsequently extended to 31 July 2020 with the result that the expiry date would have fallen on 29 November 2020. However, SITA was still not in a position to finalise the process by that date. It therefore sought to extend the period further. It was entitled to do so, so goes the submission. [36]     The bid validity period was extended approximately seven (7) times during the period between 29 November 2020 and 31 August 2021 . He submitted that on each occasion, SITA requested the extension before the expiry period. At the time when the initial period of 120 days expired, being on 29 November 2020, there were only four (4) bids that had not finally been disqualified, namely Siemens Health, Philips, Kunene and Axim. All four (4) bidders consented and agreed in writing to the extension of their bid's validity period. He submitted that C lause 17.7.2 of the SMC Policy which provides that “ validity extension periods must be requested from and agreed to in writing electronic by all bidders ”, must be interpreted sensibly to mean and refer to all those bidders whose bids remain responsive, to the exclusion of all those who have finally been disqualified. It would be ridiculous and serve no purpose to expect a bidder who has already been disqualified and out of the race, to extend its non-responsive bid. [37]     He referred to various authorities with regard to the correct approach to be adopted in the interpretation of the clause and relevant case law on the issue of extension of bids. Philips has not been prejudiced by the extensions. The principles of fairness and transparency, therefore, were not breached by SITA in not obtaining consent for extension from bidders who were at that stage, already disqualified and out of the race. [38] SITA’s conduct and its obligation to ensure a lawful process: he submitted that the negotiations between SITA and Siemens Health around pricing post the award of the tender were in terms of SCM policy permissible and therefore justified. He denied the assertion that this in itself gave Siemens Health an unfair advantage to augment or amend its pricing post the award. [39]     Regarding supplementary grounds of review, relating to section 6 (2) (b) and 6 (d) of PAJA, he submitted that there is also, no merit in the contentions and allegations by the applicants. SITA complied with all its obligations in terms of the Act. Regulations as well as the SCM Policy. SITA’s recommendation to the Accounting Officer of the Department was supported by documents which explained each step of the entire procurement process. Over and above that, designated officials of the Department were throughout responsible for the evaluation of the bid. [40]     Finally, he submitted that the applicant has failed to prove that the award has to be reviewed on any of the grounds and therefore that the application stands to be dismissed with costs THE LEGAL POSITION AND ANALYSIS [41]     As a starting point, I find it necessary to first deal with the statutory relationship between SITA on the one hand and the various government departments, such as the GDoH on the other. SITA has been established in terms of the State Information Technology Agency Act 20 of 2002 (“the Act”). The Preamble to the Act provides as follows: “ To establish a company responsible for the provision of information technology services to the public administration and to provide for matters connected therewith.” [42]     Section 6 (a) thereof provide specifically and set out its objects as follows: “ The objects of the Agency are - (a) to improve service delivery to the public through the provision of information technology, information system and related services in a maintained information system security environment to departments and public bodies ;” [43]     The exact powers and duties of SITA in relation to government departments such as the GDoH are set out in section 7 of the Act. Section 7 (3) thereof provides: “ Despite any other law to the contrary, every department must, subject to subsection (4), procure all information technology goods and services through the Agency.” [44]     In terms of section 7 (4) of the Act, depending on whether the service required has been set out in section 7 (1) (b) of the Act, a department must either acquire such a service from SITA in which event a service level agreement is to be concluded in terms of section 20 of the Act, OR procure the service through SITA. The section provides: “ (4) A department that wishes to acquire a service contemplated in- (a) Subsection (1) (a), must- (i) Acquire that service from the Agency in accordance with business and service level agreements concluded in terms of section 20; Or (ii) procure that service through the Agency in terms of subsection (3) if the Agency indicates in writing that it is unable to provide the services itself; [45]     In SAAB Grintek Defence (Pty) Ltd v South African Police Service and Others [2016] 3 ALL SA 669 (SCA) the SCA confirmed the role of SITA in the procurement of IT services and or goods by government departments as follows: “ SITA’s role is that of an expert agency facilitating the acquisition of technology services by government departments, but it does not decide whether to acquire the technology, nor does it decide not to proceed with a tender process. That is the function of the relevant department.” [46]     The applicant’s grounds of review are based on various provisions of PAJA. The preamble to PAJA reads: “ WHEREAS section 33 (1) and (2) of the Constitution provides that everyone has the right to administrative action that is lawful, reasonable and procedurally fair and that everyone whose rights have been adversely affected by administrative action has the right to be given written reasons; AND WHEREAS section 33 (3) of the Constitution requires national legislation to be enacted to give effect to those rights, and to- · Provide for the review of administrative action by a court or, where appropriate, an independent and impartial tribunal; AND WHEREAS item 23 of Schedule 6 to the Constitution provides that the national legislation envisaged in section 33 (3) must be enacted within three years of the date on which the Constitution took effect; and AND IN ORDER TO- · Promote an efficient administration and good governance; and · Create a culture of accountability, openness and transparency in the public administration or in the exercise of a public power or the performance of a public function, by giving effect to the right to just administrative action.” PROCEDURAL FAIRNESS [47]     The first ground of review is that of procedural unfairness. Applicant's contention is that the decision to award the tender was not procedurally fair and therefore reviewable in terms of section 6 (2) (c) of PAJA. The section provides: “ A court or tribunal has the power to judicially review an administrative action if … the action was procedurally unfair.” [48]     Philips contention in this regard is to the following effect: “ By providing Siemens an opportunity to meet the technical mandates of the RFB but not providing the other bidders an opportunity to do so the same, SITA afforded certain procedural benefits to one party but denied them to others. This destroys the fairness of the entire process. Bidders were not competing on an equal footing and Siemens was advantaged over all other bidders.” [49]     The real and important issue here in whether on the totality of the evidence and circumstances surrounding the procurement process, a conclusion can be drawn that Siemens Health was afforded an opportunity to argument its bid and or make it compliant by providing new information under circumstances where such information it initially did not provide. Put differently, did the information sought amount to mere clarification of the information already provided and if so, whether such a step or procedure i.e the seeking of clarification was under the circumstances, permissible. [50]     The information sought in this regard is contained in Pinakle’s report and is to the effect that: “ ...a clarification should be obtained on date the partnership was established with OSM…” And “ [Siemens Health] did not indicate whether they comply or not with MIOS requirements stated under the special condition of the contract, clarification should also be obtained in this regard.” [51]     In answering and considering the issue, regard must be had to the SCM policies, the general terms and conditions of the bid as well as case law. As regards the SCM policy, paragraph 17.7.2 thereof provides as far as necessary that: “ The SCM division through the assigned procurement officials after consultation with the BEC may request additional information for clarification from the bidders for the bid process provided all bidders are given equal treatment and opportunity.” [52]     The paragraph above is to be read together with paragraph 6.4 of the conditions of the RFB, which provides as follows: “ SITA SCM may request written clarification regarding any aspect of this proposal. The bidders must supply the requested information in writing within the specified time frames after the request has been made, otherwise the proposal shall be disqualified.” [53]     As I have pointed out, counsel for the applicant referred me to and heavily relied on the case of Metro Projects (Supra) , more specifically paragraph 14 thereof. It is, however, important to bear in mind that in that case, the SCA found that on the facts, there was deception and dishonesty. More specifically, there was deliberate manipulation by an official of the municipality, done with the sole intention of giving an opportunity to a specific tenderer, to argument its bid so as to improve its chance of acceptance. Regarding the deception on the facts, the SCA specifically said the following: “ [14] Was the tender process followed in the present case fair ? A high-ranking municipal official purported to give the ninth respondent an opportunity of augmenting its tender so that its offer might have a better chance of acceptance by the decision-making body . The augmented offer was at first concealed from and then represented to the mayoral committee as having been the tender offer. It was accepted on that basis. The deception stripped the tender process of an essential element of fairness: the equal evaluation of tenders: Where subterfuge and deceit subvert the essence of a tender process, participation in it is prejudicial to every one of the competing tenderers whether it stood a chance of winning the tender or not.” [54]     I am satisfied that in this case, there is no evidence of deception or misrepresentation or any act or conduct on the part of SITA, which can be interpreted to have the effect of favouritism or any misrepresentation and or malicious intention to benefit Siemens Health, to the prejudice of other bidders. As I have pointed out, both the SCM Policy, that is paragraph 17.7.2 (h) thereof as well as paragraph 6.4 of the conditions of the RFB make provision for and allows SITA to seek clarification in the manner it did. In short therefore the clarification sought was permissible. It is also important to point out that the SCA in Metro Projects (Supra) went further to re-affirm the legal position that particularly in complex tenders, it is permissible to seek and obtain clarification whenever it becomes necessary to do so. In this regard, the SCA put the legal position as follows: “ [13] In the Logbro Properties case, para [8] and [9] at 466H – 467C, Cameron JA referred to the ‘ ever-flexible duty to act fairly’ that rested on a provincial tender committee. Fairness must be decided on the circumstances of each case . It may in given circumstances be fair to ask a tenderer to explain an ambiguity in its tender; it may be fair to allow a tender to correct an obvious mistake; it may, particularly in a complex, tender be fair to ask for clarification or details required for its proper evaluation . Whatever is done may not cause the process to lose the attribute of fairness or, in the local government sphere, the attribute of transparency, competitiveness and cost-effectiveness.” [55]     The clarification sought was not intended to nor did have the effect of giving Siemens Health an opportunity to argument its bid. It was a requirement that “the bidder must be OSM or a registered OSM partner to provide the PACS System.” The clarification sought was actual explanation of this requirement or information which Siemens Health had already provided. The proof required amounted to particularity with regard to compliance, such as bidders' registration proof and or registered OSM partner and or date of such registration or formation of such partnership. In other words, what was required was clarification of the information already provided in the tender document or bid. What was sought, was not new information at all. [56]     It follows therefore that SITA did not allow Siemens Health an opportunity to comply, under circumstances where at the time the clarification was sought it did not. More specifically SITA did not give it an opportunity that is to become an OSM and or registered OSM partner after the submission or close of the bid. In any event, it appears to be common cause that Siemens Health became a registered OSM partner on 26 September 2016 which is a period long before it submitted its bid and therefore also long before the clarification was sought by SITA. Same goes for clarification sought in respect of Minimum Interoperability Standards (“MIOS”). Paragraph 6.2. (14) (d) therefore required that the bidder, for the duration of the contract period shall ensure that the product conforms with MIOS standards and requirements. These were set out in a form of a table and the bidder had to merely indicate in the adjacent or corresponding column whether “ comply or do not comply ”. [57]     Again paragraph 6.3 of the Bid specifications required that a bidder indicates its acceptance of all the special conditions by indicating “ accept all” or “do not accept all”. A clarification was sought in this regard, because Siemens Health accepted all of the special conditions of contract, but on the other it did not confirm under MIOS requirement that it did comply or not. There is no evidence that in so doing Siemens Health was given an opportunity to comply under circumstance, where it did not, initially comply. [58]     In RMR Commodity Enterprise CC t/a Krass Blankets v Chairman of the Bid Adjudication Committee & Others; [2009] 3 ALL SA 41 (SCA) where the following was said: “ [11] RMR's further ground of review relies on the allegation that the Adjudication Committee should not have considered the tender by Africhoice, because it did not comply with the tender conditions. But, as was pointed out in Metro Projects CC v Klerksdorp Local Municipality 2004 (1) SA 16 (SCA) para 15, there are degrees of compliance with any standard and it is notoriously difficult to assess whether less than perfect compliance falls on one side or the other of the validity divide. Whether or not there can in any particular case be said to have been compliance with the specifications and conditions of a tender, must necessarily depend on the facts of that case.” [59]     I am satisfied that on this ground the clarification sought was perfectly permissible and that Siemens Health was not given an opportunity to argument its bid. Therefore, such clarification as I have pointed out is permissible and did not provide an opportunity to Siemens Health to argument its bid. On evidence, it appears also to be common cause that in the case of Philips also, a clarification was sought regarding an apparent contradiction in its bid, regarding its ability or otherwise to meet the mandatory subcontracting requirement of 30%. In its bid, Philips had set out its subcontracting ability at 14% which is well below the mandatory 30%. Philips was therefore given an opportunity and required to clarify this apparent contradiction. This therefore dispels any suggestion of favouritism or different treatment of other bidders. THE LAWFULNESS OR OTHERWISE OF THE TENDER PROCESS: [60]     Philips contend that SITA failed to ensure that the tender process was lawful in that it allowed Siemens Health an unfair opportunity to reconsider its pricing, post the award of the tender to the prejudice of other bidders. The award is therefore reviewable in terms of in terms of sections 6 (2) (b) and (d) of PAJA which reads: “ A court or tribunal has the power to judicially review an administrative action if.. (b)A mandatory and material procedure or condition prescribed by an empowering provision was not complied with;.. (d)The action was materially influenced by an error of law”. [61]     Philips contend that after the tender was awarded to Siemens Health, it was given an unfair opportunity to reconsider its pricing. It is common cause that initially, the tender had a monetary budget of approximately R200 million. At a later stage an additional budget of R48 324 885-85 was approved, bringing the total value of the tender or budget thereof to R248 324 885-85. This was the amount that Siemens Health had initially set out in its bid. On 2 February 2021 and in their written submissions to EBAC, members of the SCM at SITA recommended that the tender be awarded to the Siemens Health at a cost of R248 324 885-85. This was however subject to the condition that SITA will negotiate reduction of the price with Siemens Health. [62]     I have been referred and had regard to SITA’s SCM Policy, particularly paragraph 18 thereof. This paragraph deals with and makes provision for SITA to enter into negotiations with bidders either before or after the award of the tender . The paragraph provides specifically as follows: (a) “ Negotiations with bidders shall be permitted prior to award and post award .. (b) Negotiations sessions shall be held with the duly identified shortlisted bidders after the conducting of the evaluation process. [63]     On this basis therefore, it is my finding that negotiations around pricing between SITA and Siemens Health post the award of the tender were fully permissible and therefore under these circumstances, justified. That being the case, such negotiations cannot amount to reviewable irregularities in terms of PAJA. DICTATION BY PINAKLE [64]     Section 6 (2) (e) (iv) of PAJA provides as follows: “ A court or tribunal has the power to judicially review an administrative action if... the action was taken... because of the unauthorised or unwarranted dictates of another person or body.” [65]     Contention by Philips in this regard, is that initially SITA had found that three (3), bidders namely Siemens Health, Philips and Kunene had complied with the technical requirements of the RFB. However, it later did an about-turn following Pinakle’s findings and report to the contrary. In this way SITA failed to exercise or take its own decision but simply adopted and rubber stamped that of Pinakle. [66]     It is important to point out in the first place that Regulation 13 (1) (b) makes provision for establishment of a Recommendation Committee and also, sets out the roles and responsibilities of such a committee as follows: “ (b ) a Recommendation Committee to- I. Verify compliance of the procurement process with all applicable legislation and generally the integrity of that process; II. If the process is verified as not compliant or its integrity was compromised, refer the recommendation back to the Bid Evaluation Committee with reasons; III. Identify any risks additional (if any) to those identified in the risk report of the BEC and provide its own rating for all the risks (herein referred to as the risk report to the RC); and IV. If the process has been verified as compliant and for its integrity, submit the recommendation of the Bid Evaluation Committee and the risk reports of the BEC and RC to the relevant accounting authority of the designated department or public body;” [67]     Secondly, the SCM Policy makes provision for an audit process integrity review by an external service provider for bids of more than R100 Million. In this regard paragraph 13.7 thereof provides: “ Bids above R100 million (VAT incl.) for awards and agency recommendations , at the discretion of the Executive Internal Audit, may be subjected to an audit process integrity review by an external service provider appointed by Internal Audit before being submitted to the adjudication authority.” [68]     Thirdly SITA’s SCM Policy provides for and permits that services of external advisors or consultants may be sought to provide professional advice. Paragraph 13.9 (a) thereof provides as follows: “ Specialist advisors or consultants may assist in the execution of the SMC functio n. However, no external advisor or consultant may participate in the final decision-making process regarding the adjudication of bids, except giving such professional advice which may assist SITA to make a just and reasonable decision.” [69]     As I have pointed out, prior to the technical evaluation process, SITA sought clarification from Philips, Siemens Health and Axim. This SITA did despite the fact that Pinakle had already found that Philips has failed to meet or satisfy the subcontracting requirements, and therefore should not have been considered any further. In its bid, Philips proposed subcontracting was set at 14% of the contract value instead of the minimum and or mandatory 30%. Philips was given an opportunity to clarify this. This therefore again dispels any suggestion of mere rubber stamping by SITA. [70]     It is also important to emphasise the fact that in its report Pinakle sets out the chronology and processes it followed during the various stages of the evaluation process. It also gave reasons for its ultimate findings and conclusions, based on evidence at its disposal. In other words, therefore, SITA was provided with all the facts, written evidence and indeed reasons on which Pinakle’s findings were based. All of these were made available to the BEC and accompanied the report. This therefore serves as evidence that the decision taken by SITA was based on evidentiary material provided, as well as supporting documents on which the recommendations were based. [71]     SITA was fully entitled and indeed authorised to appoint external service providers and or consultants to assist it in its responsibilities and role it plays in procurement processes and most importantly, to ensure the integrity of its processes. Taking into account all of the above, I cannot find that in this regard SITA merely rubber stamped the decision of Pinakle and therefore abdicated its duties. There is no evidence to support this contention. EXTENSIONS OF THE BID VALIDITY PERIOD [72]     Section 6 (2) (b) and (i) of PAJA provides as follows: “ A court or tribunal has the power to judicially review an administrative action if (b) A mandatory and material procedure or condition prescribed by an empowering provision was not complied with;… (i) The action is otherwise unconstitutional or unlawful.” [73]     Applicant’s contention on this ground in that firstly, the Bid was awarded despite the fact that not all bidders had agreed to and or in writing communicated their approval of or consent to the extension of the bid validity periods. Secondly, the bid was awarded after the validity period has expired. In other words, the bid was awarded outside the 120 days period, calculated from the day the tender was closed. [74]     As a starting point it is important to point out that SITA’s SMC Policy specifically makes provision for the extension of the bid validity period. In this regard, paragraph 17.7.2 thereof provides as follows: “ (f) The validity period of a bid should allow a minimum of 120 days from the closing date of the bid. Validity extension periods must be requested for and agreed to in writing/ electronic by all bidders .” (g) A fair and transparent process shall be followed for the closing, receiving, opening and processing of bids; [75]     Similarly, the Bid specifications in paragraphs 6.2.1 and 6.2.2 empowers SITA, at its discretion to extent the bid validity period if the RFB is not completed within the stipulated period. In this regard, the clause provides as follows: (i) “ Clause 6.2.1 : “SITA has the discretion to extend the validity period should the evaluation of this RFB not be completed within the stipulated validity period; and (ii) Clause 6.2.2 “ Upon receipt of the request to extend the validity of the period of the RFB the bidder must respond within the required time frames and in writing on whether or not it agrees to hold its original RFB response valid under the same terms and conditions for a further period.” [76]      It is common cause that in this case a total of seven extensions of the bid validity period were made and are as follows: 76.1.  29 November 2020 to 28 January 2021; 76.2.   28 January 2021 to 28 February 2021; 76.3.  28 February 2021 to 31 March 2021; 76.4.  31 March 2021 to 30 April 2021; 76.5.  30 April 2021 to 31 May 2021; 76.6.  31 May 2021 to 31 July 2021; and 76.7.  31 July 2021 to 31 August 2021. [77]     The main issue here is the correct interpretation to be adopted in interpreting paragraph 17.7.2 of the SCM Policy which provides that “… Validity extension periods must be requested from and agreed to in writing electronic by all bidders” . In other words, whether the words “... by all bidders...” in relation to extensions, mean all bidders in a literal sense, or simply refer specifically or exclusively to participating bidders only i.e., only those participating bidders who at the stage the extension is sought, have not been disqualified and or are not out of the race. [78]     In his argument, counsel for the applicant referred to the case of Telkom SA Limited v Merid Trading (Pty) Ltd & Others [2011] ZAGPPHC 1 where the following was said: “ The question to be decided is whether the procedure followed by the applicant and the six respondents after 12 April 2008 (when the validity period of the proposals had expired) was in compliance with section 217 of the Constitution. In my view it was not. As soon as the validity period of the proposals had expired without the applicant awarding a tender the tender process was complete – albeit unsuccessfully – and the applicant was no longer free to negotiate with the respondents as if they were simply attempting to enter into a contract. The process was no longer transparent, equitable or competitive. All the tenderers were entitled to expect the applicant to apply its own procedure and either award or not award a tender within the validity period of the proposals. If it failed to award a tender within the validity period of the proposals it received, it had to offer all interested parties a further opportunity to tender. Negotiations with some tenderers to extend the period of validity lacked transparency and was not equitable or competitive. In my view the first and fifth respondent’s reliance only on rules of contract is misplaced.” [79]     I was also referred to the judgment of City of Ekurhuleni Metropolitan Municipality v Takubiza Trading & Projects CC and Others 2023 (1) SA 44 (SCA)) where the court said the following: “ the validity period is indeed one of the fundamental ‘rules of the game’, being the period within which the process should be finalised. To extend the tender validity period , the consent of all the participants to the tender process is required . Unless there is a timeous request and favourable response from all the tenderers prior to the expiry of the tender, the tender comes to an end.” [80]     The very same question and issue was considered by the Supreme Court of Appeal in Aurecon South Africa (Pty) Ltd v Cape Town City 2016 (2) SA 199 SCA. The SCA, held specifically that when a tenderer or bidder has already been disqualified and or is out of the race they are no longer participants in the process. That being the case it is not necessary or required that written consent for the extension of the validity period be sought and or obtained from such a tenderer. The SCA said the following: “ [22] In this regard the complaint was that Aurecon and the other tenderers were not officially requested to extend the validity period of their tenders…” [23] It is unnecessary to require a ‘formal’ request from the tenderer in the present circumstances. Clause 140 merely requires an agreement by the affected tenderer in writing, and a decision by the chairperson before the expiration date, both of which were achieved in this case… And the complaint relating to the other tenderers has no merit whatsoever for the simple reason that they had already been found ineligible at that stage and were out of the picture …” [81]     Similarly, in Wattpower Solutions CC and Another v Transnet SOC Limited and Another [2022] 1 ALL SA 892 (KZD) the following was said: “ [36]The issue is whether it was necessary for Transnet to advise all bidders of the extension, or whether it was obliged to canvass the views of disqualified bidders in a ‘race’ where only two responsive candidates remained, and in respect of whom such consent was asked and received. Put differently, did Transnet have any obligation in respect of non-responsive bidders?” [82]     The court went on to consider and drew a distinction between the line of authorities relied on and referred to in Takubiza (Supra). Finally placing reliance on Aurecon (Supra) the court concluded that there is no need to seek or obtain consent for bid validity extension from a bidder who is already disqualified and no longer in the race. The court said the following: “ In Aurecon South Africa (Pty) Ltd v Cape Town City 2016 (2) SA 199 (SCA) paragraph 23 [also reported at [2016] 1 ALL SA 313 (SCA) Ed], in circumstances where tenderers who were found to be ineligible were not asked to extend their tenders, the court stated that ‘ the complaint relating  to the other tenders has no merit whatsoever for the simple reason that they had already been found ineligible at that stage and were out of the picture.” [83]     I have given consideration to all decisions I have referred to. Having said that, it is my view that the interpretation and approach adopted in both Aurecon and Wattpower Solutions (Supra) is to be preferred and applied in this case. The interests of justice require that when the court is engaged in an interpretative process, “a meaning that frustrates the apparent purpose of the statute or leads to unbusiness like results is not to be preferred. See : Road Traffic Management Corporation v Waymark (Pty) Ltd 2019 (6) BCLR 749 (CC) [84]     Similarly, in Capitec Holdings and Another v Coral Lagoon Investments 194 (Pty) Ltd and others [2021] 3 AII SA 674 (SCA) the SCA said that the process of interpretation is initially an exercise involving the triad: text (language) context and purpose . The court said the following: “ The much-cited passages from Natal Joint Municipal Pension Fund v Endumeni Municipality ( Endumeni) offer guidance as to how to approach the interpretation of the words used in a document. It is the language used, understood in the context in which it is used, and having regard to the purpose of the provision that constitutes the unitary exercise of interpretation. I would only add that the triad of text, context and purpose should not be used in a mechanical fashion. It is the relationship between the words used, the concepts expressed by those words and the place of the contested provision within the scheme of the agreement (or instrument) as a whole that constitutes the enterprise by recourse to which a coherent and salient interpretation is determined. As Endumeni emphasised, citing well-known cases, ‘the inevitable point of departure is the language of the provision itself’ .” [85]     Having said that it is common cause that the 120 days bid validity period expired on 29 November 2020 , and that as at that stage there were only four participants whose bids had not finally been disqualified. These are: I.          Siemens Health II.          Philips III.          Kunene IV.          Axim [86]     It is also common cause that all four (4) participants had agreed to the extensions. Based on authorities to which I have referred, in particular Wattpower and Aurecon, I have no difficulty in finding that there was no need for SITA to seek and obtain any written consent for the extension of the bid validity period from the rest of other bidders who were no longer participants in the tender process. FURTHER GROUNDS OF REVIEW [87]     As I have pointed out, applicant contends that SITA has an obligation in terms of the Act, to ensure that the procurement process is lawful and also to inform and advice the Department if the process is not lawful. If SITA fails to do so, it has failed to comply with its legal obligation with the result that decision to award the tender becomes reviewable. [88]     It is important to bear in mind that the decision to award the tender, was taken by the Department and not SITA. SITA merely facilitates the procurement process. It acts as an agent of the Department and does so in terms of and within the confines of the SITA Act. This obligation includes the duty to ensure verification of compliance as well as the integrity of the procurement process. In carrying out there obligations, SITA is guided by the empowering Act, Regulations thereto as well as the SCM policy. SITA is under obligation to observe all of these in carrying out its mandate. [89]     In this case, evidence is that the recommendation made by SITA to the Accounting officer of the Department, was a product and result of a formal prescribed procurement process. The written recommendation was accompanied and supported by various documents that fully explains how the entire procurement process unfolded and the recommendation arrived at. This was done despite the fact that the Department has designated officials who were responsible for the evaluation of the bid. [90]     I have dealt with the evidence and chronology of events leading and pertaining to the process. There is no doubt that if the Accounting Officer of the Department had any doubt or reservations regarding the recommendation made, the supporting documents and information on which it was based, he or she had all the right to refuse or reject the recommendation and not award the tender. I cannot therefore find that the bid was materially influenced by an error of law. CONCLUSION [91]     Taking into account all of the above, it is my finding that the applicant has failed to prove or establish reviewable irregularities on any one or more or all of the grounds relied on. It is therefore not necessary for me to have regard to the provisions of Section 172 of (1) (a) and or (b) of the Constitution. Under the circumstances, the application must fail. COSTS [92]     It is so that the issue of costs in generally in the discretion of the court. Equally so, costs normally follow the results. I do not find any reason to deviate. ORDER [93]     The application is dismissed with costs, which costs shall include costs consequent upon employment of two (2) counsel. S.S MAAKANE ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA GAUTENG DIVISION – PRETORIA Judgment reserved: 19 February 2024 Judgment handed down: 10 December 2024 APPEARANCES For the Applicant               : Adv A Govender Adv N Nyembe Instructed by                     : Pinesent Mansons South Africa Inc. Johannesburg For the First Resp             : Adv R Bhana SC Adv G Singh Instructed by                     : Ncube Inc. Attorneys Johannesburg sino noindex make_database footer start