Case Law[2024] ZAWCHC 51South Africa
SS Salutions (Pty) Ltd t/a Seal Security v Western Cape Provincial Government and Others (9697/2023) [2024] ZAWCHC 51; [2024] 2 All SA 547 (WCC) (21 February 2024)
Judgment
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# South Africa: Western Cape High Court, Cape Town
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## SS Salutions (Pty) Ltd t/a Seal Security v Western Cape Provincial Government and Others (9697/2023) [2024] ZAWCHC 51; [2024] 2 All SA 547 (WCC) (21 February 2024)
SS Salutions (Pty) Ltd t/a Seal Security v Western Cape Provincial Government and Others (9697/2023) [2024] ZAWCHC 51; [2024] 2 All SA 547 (WCC) (21 February 2024)
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sino date 21 February 2024
THE
REPUBLIC OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No: 9697 / 2023
In
the matter between:
SS
SALUTIONS (PTY) LTD t/a SEAL SECURIT
Applicant
And
WESTERN
CAPE PROVINCIAL GOVERNMENT
First
Respondent
THE
MEC FOR THE DEPARTMENT OF
Second
Respondent
INFRASTRUCTURE
WESTERN
CAPE PROVINCIAL GOVERNMENT
THE
DIRECTOR OF ACQUISITIONS &
Third
Respondent
CONTRACT
MANAGEMENT OF THE
DEPARTMENT
OF INFRASTRUCTURE
WESTERN
CAPE PROVINCIAL GOVERNMENT
THE
CHIEF DIRECTOR OF SUPPLY CHAIN
Fourth
Respondent
MANAGEMENT
OF THE DEPARTMENT OF
INFRASTRUCTURE
WESTERN
CAPE PROVINCIAL GOVERNMENT
THE
MEC FOR PROVINCIAL TREASURY
Fifth
Respondent
WESTERN
CAPE PROVINCIAL GOVERNMENT
THE
DEPARTMENT OF
Sixth
Respondent
INFRASTRUCTURE
WESTERN
CAPE PROVINCIAL GOVERNMENT
THE
BID EVALUATION COMMITTEE OF THE
Seventh
Respondent
DEPARTMENT
OF INFRASTRUCTURE
WESTERN
CAPE PROVINCIAL GOVERNMENT
THE
BID ADJUDICATION COMMITTEE OF THE
Eight
Respondent
DEPARTMENT
OF INFRASTRUCTURE
WESTERN
CAPE PROVINCIAL GOVERNMENT
THE
DEPARTMENT OF POLICE OVERSIGHT AND
Ninth
Respondent
COMMUNITY
SAFETY WESTERN CAPE
PROVINCIAL
GOVERNMENT
ROYAL
SECURITY CC
Tenth
Respondent
RED
ANT SECURITY CONSORTIUM
Eleventh
Respondent
S
ISMAIL t/a ALCATRAZ
Twelfth
Respondent
MASIBAMBANE
SECURITY SERVICES (PTY) LTD
Thirteenth
Respondent
UTHEMBEKILE
SECURITY SERVICES CC
Fourteenth
Respondent
AMA
SECURITY (PTY) LTD
Fifteenth
Respondent
SILVER
SOLUTIONS 1522 CC
Sixteenth
Respondent
DC
SECURITY (PTY) LTD
Seventeenth
Respondent
ENSEMBLE
SECURITY
Eighteenth
Respondent
SECHABA
PROTECTION SERVICES (PTY) LTD
Nineteenth
Respondent
PROSEC
GUARDS CC
Twentieth
Respondent
SECURICAPE
SERVICES (PTY) LTD
Twenty-First
Respondent
TYTE
SECURITY SERVICES CC
Twenty-Second
Respondent
Coram:
Gamble
et
Wille, JJ
Heard:
28, 29 and 30 November 2023
This
judgment was handed down electronically by circulation to the
parties' representatives via email and released to Saflii on
Wednesday, 21 February 2024 at at 10h00.
JUDGMENT
WILLE,
J (Gamble J, concurring by way of a separate judgment):
Introduction
[1]
The problems in this review application are easy to state but
difficult to resolve. This judgment hopefully
offers the
parties definitive responses to these fiercely debated matters.
In this judgment, I have attempted to address
the primary concerns
raised in this application for review. My lack of engagement
with a specific argument or aspect should
not be interpreted as
disregarding its importance or a lack of consideration thereof on my
part. In this context, ‘applicant’
will refer to
the challenging party involved. The term ‘provincial
respondents’ will refer to the first respondent
and other
parties representing other provincial departments. The term
‘incumbent’ will refer to the tenth respondent,
while the
term ‘unsuccessful bidder’ will refer to the
twenty-second respondent.
[2]
Roughly ten months ago, the provincial respondents released a tender
award for a two-year contract for security
services. These
protection services were focused on immovable properties owned by the
provincial respondents. These
protection services were to
include, among other things, providing a control room, security
vehicles, firearm management, armed
response vehicles, security
relocation and eviction services.
[3]
The provincial respondents extended invitations to the parties and
several other security firms to compete
to offer for these security
services. These review processes were initiated by the
applicant and the other unsuccessful bidder
through a
counterapplication. The issue pertains to the decision to
provide a private security contract to the incumbent.
This
judgment concerns the applicant's challenge and the
counterapplication made by the unsuccessful bidder.
Overview
[4]
During the second quarter of this year, the provincial respondents
initiated a new tender for these specific
security services through a
competitive procedure. Fourteen bids were submitted by the
specified deadline, including offers
from the applicant, the
incumbent, and the unsuccessful bidder.
[5]
Following the reception of the bids, they underwent an evaluation
process encompassing an assessment of their
functionality. Out
of these proposals, ten still needed to pass the functionality test.
As a result, the applicant,
the incumbent, the eleventh respondent,
and the unsuccessful bidder remained, as they had completed the
functionality test.
[6]
Subsequently, a risk assessment was conducted, and the remaining four
bidders successfully met its requirements.
Following that, the
pricing was evaluated. The current price offered by the
incumbent was significantly lower than the competition.
The
provincial respondents assessed and made decisions on all of these
bids. Approximately one month later, the security
contract was
granted to the incumbent, which is currently the focus of this
evaluation and the subject of this review application.
Context
[7]
Approximately one year ago, this division issued a ruling regarding a
review process concerning a previous
bidding process involving
essentially the same parties.
[1]
The previous tender was granted to the applicant and the unsuccessful
bidder.
[8]
Another bidder who believed it could have been more successful in the
bidding process became dissatisfied
and commenced review proceedings
to contest the previous tender. The court determined to
re-assess and invalidate the decision
and to grant the contract to
both the applicant and the unsuccessful bidder,
albeit
on an
interim basis.
[9]
The cancellation of the tender was temporarily halted until the
re-run of an expedited process for acquiring
these services in
question was finished. Subsequently,
the
provincial
respondents initiated a fresh tendering process,
ultimately resulting in this current application for review.
[10]
The applicant filed this application for review and an urgent
application for interim relief regarding the award of the
tender to
the incumbent. The applicant sought an interim remedy until the
conclusion of this application for review.
The application for
interim relief was heard around half a year ago.
[11]
The process led to establishing an order through mutual agreement,
which specified the timeframes for submitting the
record, statement
of reasons, supplementary documents, responses, replies, and
affidavits.
[12]
According to the agreed order, the party making the request, the
applicant, the incumbent, and the unsuccessful bidder,
mutually
agreed to offer security services to the provincial respondents while
awaiting the outcome of this review application.
What this
meant in essence that this was an agreed temporary arrangement
pending an entire re-run of the tender process for these
specified
security services.
Review
grounds
[13]
I shall categorize the grounds for evaluation and analysis into two
distinct categories. The initial category pertains
to the
primary justifications for examination that necessitate meticulous
examination. These pertain to the functioning and
operational
evaluation of the incumbent and how they acquired the contract. The
second category pertains to the technical
concerns against granting
the contract to the incumbent, explicitly focusing on arguments about
prioritizing substance above form.
[14]
For now, I will shift my focus to the initial category.
Following the successful resolution of numerous procedural
obstacles,
the bidders with the best scores underwent an evaluation of their
operational risk. This step was necessary to
confirm and
measure the bidder's capacity to deliver the security services as
outlined in the bid document following the requested
scope of work.
[15]
The risk assessment evaluates various factors, including the bidder's
quality, reliability, viability, and technical
proficiency to execute
the contract. The incumbent still needed to pass the initial
evaluation concerning local operational
risk. The provincial
respondents discovered that they had assessed the incumbent at an
incorrect location.
[2]
[16]
The applicant
and the unsuccessful bidder
made
some claims
that evaluating the
incumbent at the incorrect address was considered an afterthought,
indicating a prejudice in favour of the incumbent
bidder. The
accusation was that this action was taken to create the illusion of
credibility for the later evaluation of the
incumbent.
It was claimed that this ‘second evaluation’ was
both procedurally unjust and substantively incorrect according to the
law.
[17]
Due to this process and procedure, it was alleged that the
provincial
respondents preferred the incumbent's position. In
summary, it was contended that the subsequent examination was carried
out
with the hidden intention of prioritizing the incumbent's
interests over those of the other bidders.
[18]
Therefore, the applicant and the unsuccessful bidder claimed that
assessments by the provincial respondents were conducted
with ill
intentions or without reason and violated our constitution and the
law. This was the situation (so they say) since
no other bidder
had been given an additional opportunity to undergo a risk
assessment. This was their argument.
[19]
Consequently, it was contended that the choice to carry out an
additional risk assessment to ascertain the incumbent's
capability to
deliver on-site services was deemed unsuitable. The contention
was that the abilities and qualifications of
the incumbent should
have been evaluated and verified within the local context before the
tender was granted to it. Furthermore,
it was argued that there
were even uncertainties regarding the ability of the incumbent to
deliver the services once the tender
had been granted to it.
[20]
Further, the applicant expressed dissatisfaction with the fact that,
if pricing was of utmost importance,
the other bidders should have
also been given additional chances to enhance their pricing, like the
incumbent, who was provided
with further opportunities to demonstrate
its capability and competence in delivering the services as per both
risk assessments.
[21]
This claim pertains to the need for uniformity and impartiality in
how the provincial respondents handled
the other bidders.
Essentially, it was claimed that the
incumbent
was
favoured
over and above the
other bidders due to the strategy adopted by the provincial
respondents
. Thus, the fundamental
concern in the initial category of this analysis was that the
tender
awarded to the
incumbent
should be
re-evaluated
and
invalidated solely due to these irregularities.
Tender
specifications
[22]
The main features of the tender document were as follows: (a) the
bidder was required to have the necessary
infrastructure and capacity
to provide the services; (b) an operational risk assessment was
required to assess whether the bidder
had the capacity, knowledge,
infrastructure, support and systems relevant to the risks associated
with the provision of the required
security services; (c) the
provincial respondents reserved the right to conduct personal visits
to the premises of all potential
bidders (and those of specified
references) to assess the bidder’s operational capabilities;
(d) the highest scoring bidder
would receive a risk score, which
would be converted into a risk rating that would allow the provincial
respondents to decide on
the expected level of service and risk
tolerance that the they were willing to accept; (e) thereafter, a
minimum qualifying score
of sixty-one percent was required to pass
the risk assessment, with the understanding that any bidder failing
to achieve this minimum
score would not be considered further.
[23]
Subsequently, the operational risk assessment process would be
reiterated with the bidder who obtained the second-highest
score.
The operational risk evaluation would primarily involve evaluating
the control room, security
vehicles,
firearms management, and armed response vehicles. Furthermore,
the evaluation of the operational risk for the headquarters
and
control room tender specified that the service provider must possess
a physical location or facility that serves as a headquarters,
control room, or visible representation in the specific area for
which it was submitting the tender.
[24]
Alternatively, the service provider had to clearly define the method
for managing its security personnel without a physical
office in the
local area. This alternate requirement would be evaluated as a
component of the operational risk assessment.
The service
provider was required to demonstrate its presence by submitting a
municipal bill or a lease agreement. Consequently,
the bidder
must have possessed a ‘registered office/control
room/demonstrable presence’ locally.
Consideration
[25]
The
provincial r
espondents evaluated the
functioning of the incumbent's physical guard control room and
specialized tactical vehicles as having
a moderate to high level
of
risk
. This was because the incumbent did not have armed
guards or response vehicles in the field. The applicant
expressed
dissatisfaction with the evaluation and noted that only two
references were considered for the incumbent instead of the required
number, and an extra risk assessment was carried out. However,
the most recent on-site risk assessment revealed the incumbent's
notable progress in all areas.
[26]
Due to these significant
favourable
changes
reported, there were suspicions about the authenticity of these
assessments. Furthermore, considering the incumbent’s
capacity
, the applicant claimed that
the
risk assessment should be conducted at the site where the
service
provider
would finally deliver the services. The
fairness and reasonableness of these criteria were the main
objections by the applicant
and the unsuccessful bidder.
[27]
The
primary contention
was
that it was inappropriate for the provincial respondents to assess
the incumbent externally at its principal office.
[3]
This was because the objective of the bid was to procure
security services from within the local area. This complaint
alleges that it was unjust for the provincial respondents to assess
the
incumbent
at
their local office and at
its
headquarters
outside the province before the contract was granted to the
incumbent. I have some difficulty with these arguments.
I say
this because assessing the incumbent (externally) in a different
province would seem to me to be logical because this is,
in essence,
an exercise about evaluating the overall operational risk. It
does not matter if part of this evaluation occurred
in a different
province.
[28]
The provincial respondents contended that the tender was openly and
nationally
advertised
.
Consequently, no bidder was disqualified from submitting a proposal
due to the absence of a fully-fledged local company
location. The
objective of the tender procedure was not to limit the submission of
bids exclusively to enterprises operating
within the local area.
Conversely, the objective was to broaden the offer range to enhance
competition among potential bidders,
leading to a more competitive
and cost-efficient procedure. The tender agreement does not
explicitly forbid external evaluations.
I agree with this
interpretation of the facts.
[29]
The applicant and the unsuccessful bidder contended that the
assessment should have taken place at the geographical
location where
the bidder's security assets were situated. As per the tender
documents, a service provider must have a registered
office, control
room, or a verifiable presence inside their bidding area.
[30]
Suppose the service provider had a physical presence in the area.
In that case, it had to explicitly
state the method it would employ
to exercise management control over guards in that region.
There was no fundamental uncertainty
over the criteria for
determining a tangible presence locally within the specified region.
Undoubtedly, the incumbent met
the prerequisites for this tangible
presence.
[31]
The applicant argued that the
published tender
document
mandated the tenderer to have a control center and a
physical presence in the specified location. Given the
circumstances,
they contended that it would not be unfeasible to
anticipate tenderers to possess all accessible resources on-site at
the time
of tender submission. Additionally, they proposed that
implementing such a condition would not unfairly disqualify other
competent bidders.
[32]
This argument should be considered within the framework of a
nationwide bidding process. The replies
from the
provincial
respondents
assert that it was necessary to consider all the
incumbent’s resources regardless of their location in a
different region.
Upon awarding the contract, the incumbent
would only have been obliged to implement the required operational
and administrative
steps. The applicant and the unsuccessful
bidder expressed strenuous concerns over the actual ’assessment’
of
the incumbent's performance. They claimed that the incumbent
needed to meet the requirements for functionality and risk
assessments
locally.
[34]
This accusation needed more evidence and muddled the distinction
between review and appeal matters.
I will analyze these
complaints when I analyze the second group of review grounds raised
by the applicant and the unsuccessful
bidder. To summarize, the
incumbent
contended that the objections
and grievances raised by the applicant and the unsuccessful bidder
were irrelevant and did not compromise
the fairness or integrity of
the tender process.
[35]
By elaborating on and supporting the incumbent, the provincial
respondents asserted that the court should
refrain from using a
mechanical approach and ensure the intended objective of the tender
was accomplished. A method guided
by a ‘clear purpose’
should be used. I concur with this viewpoint as well. This
functionality argument
is closely intertwined with the price argument
I will now turn to.
[36]
The complaint was that the
incumbent s
ubmitted
a bid lower than the prevailing market price to undermine and
outperform rival bids. While neither party openly claimed
it,
the incumbent's low price could have been attributed to a dearth of
substantial infrastructure on site. The
incumbent
asserts that it offered a bid advantageous to the provincial
respondents,
much lower than the
competing bids, contributing to them being awarded the tender.
They contended that their partial local
infrastructure (during the
bidding process) did not automatically lead to a failure of its risk
assessment. Once more, I
agree.
[37]
The incumbent contended that the objective of a procurement process
was to acquire a tender with a minimal
cost, hence facilitating
competition among other potential bidders. From my
understanding of the applicant's position, the
claim is not that the
incumbent’s bid was illegal or a clear violation of any
procurement term simply because the
incumbent
filed a
more competitive
proposal.
[38]
As I understand it, the main issue was that the
incumbent’s
bid needed to be more regular, including the price, because it
would have been impossible for them to provide the essential services
at the given price without being physically present on-site, as
stipulated by the bid conditions. If this was the crux of
the
argument, I do not understand how this issue constituted a legal
basis for review.
[39]
I say this because this irregularity is promoted by the assertion
that the assessment was conducted assuming
that the
incumbent
could not depend on the external control room and that the
mentioned local premises needed to be more sufficient to provide the
necessary resources. Put another way, the
incumbent
should have set up a local operational control center to
provide the necessary services. This was the argument.
[40]
It is essential
to highlight that
the provincial respondents' evaluation of the local control room
regarded the issue of the control room as adequate.
The local
assessment yielded a negative result concerning firearms and armoured
vehicles. Furthermore, the claim that the
control room was a
‘non-functioning control room’ was not the core complaint
by the applicant nor the unsuccessful
bidder.
[41]
Now, I shall briefly discuss the situation of the unsuccessful
bidder. The unsuccessful bidder filed
a counterapplication
concerning the previous motion for an interlocutory injunction.
The unsuccessful bidder requested a
review and reversal of the
decision to grant the contract to the incumbent and asked for the
matter to be remitted to the provincial
respondents for further
consideration. Their principal points reflected the applicant's
primary claims on the purportedly
defective risk assessment.
The unsuccessful bidder did not support the applicant's assertion
that the provincial respondents
neglected to address a claimed
association between the incumbent and the enquiry into the state
capture allegations.
[42]
In general, it is unquestionably true that procuring bodies should
only consider compliant and conforming
tenders. Therefore,
tenders must adhere to every tender component, following the
specifications provided by the purchasing
entity in the tender
paperwork. Failure to achieve these conditions would undermine
the objective of soliciting information
and documents from potential
bidders. When assessing compliance with tender terms, the provincial
respondents must prioritize the
actual content rather than the
appearance or complaints about the content.
[43]
I say this because it will allow the provincial respondents to
differentiate between rectifying mistakes
or omissions and making
significant amendments to bids. It is essential to distinguish
between failure to comply with tender
criteria and procedural
formalities. The provincial respondents must exercise
discretion in addressing non-compliance with
procedural requirements,
prioritizing substance over form, mainly when dealing with public
procurement contracts.
[44]
In the context of an open tender, the provincial respondents could
perform the risk assessment on the incumbent
both locally and
externally. I say this because the services offered in the
tender were essential for safeguarding the assets
of the provincial
government, and any disruption would have adverse consequences for
the citizens. Thus, a proper and thorough
risk analysis cannot
be faulted. Also, these very same facts undoubtedly impacted
the provincial respondents’ stance
concerning the applicant and
the unsuccessful bidder's request for temporary relief.
[45]
The standards governing written document interpretation must also be
applied to tenders. Four potential
bidders advanced to the risk
assessment phase. Three of these bidders satisfied the criteria
for the on-site risk assessment.
One bidder needed to fulfill
the minimum requirement for the on-site evaluation. This
organization was the incumbent in the
competition. As a result,
the incumbent was subjected to an additional risk evaluation in a
separate province. Both
the applicant and the unsuccessful
bidder contend that this was unjust. I hold a different
opinion. I say this primarily
because it is essential to
consider the provincial respondents' arguments concerning the purpose
and nature of assessing the usefulness
of the bid made by the
incumbent. This is precisely what was achieved by the
provincial respondents.
[46]
I will now turn to the second set of challenges identified as the
basis for the review. The incumbent's
proposal was found to be
inadequate for the required functionality evaluation for the
following reasons: (a) the contract manager's
alleged lack of
experience, (b) the contract manager's alleged weak record, and (c)
the alleged improvement in the bidder's functionality
rating, while
all other bidders' ratings remained unchanged, and they received a
lower rating.
[47]
The incumbent's
training methods were
given near-perfect ratings. The contention was that the documentation
supporting the bid (suggesting that
only a small proportion of staff
were trained) should have more accurately reflected the outcome. The
incumbent scored poorly
on this aspect of the functional evaluation,
receiving a score of less than fifty percent. It also allegedly
presented with
a list of security officers whose firearms licenses
had expired.
[48]
As a result, a dispute emerged about interpreting specific firearm
regulations about handgun permits and
competency certifications.
The argument was that the supporting material for the bid indicated
that a mere fraction of the
workers received training and needed to
be more accurate in portraying the outcome. Again, the
incumbent performed poorly
in this aspect of the functioning
assessment, receiving a score below fifty percent. Additionally,
they were presented with
a roster of security officers whose pistol
qualifications had allegedly expired.
[49]
Whatever happens with this argument does not matter because it is
crucial not to be too mechanical when dealing
with these technical
problems. The main goal of the investigation should be to find
out if the requirement's goal has been
met. I will now consider
the technical points of view the applicant and the unsuccessful
bidder advanced.
[50]
The applicant’s initial assessment states that the
administrative officials working for the provincial
respondents
treated the information provided by the state capture enquiry with
great disrespect. They say how the provincial
respondents
handled this information appeared to advance the incumbent's
position. For some reason, this also seems to be
used to
support the idea that the incumbent’s award was so unjust that
any reasonable person could not have approved it.
[51]
The main aim of the bidding process should be to determine whether
the requirement's aim was achieved.
The allegation was that the
incumbent was identified and implicated in widespread state theft in
the state capture report. The
applicant based this attack on an
impartial excerpt from the enquiry report and a transcript of an
interview.
[52]
After carefully reviewing the original and supplemental documents,
including the attached supporting documents
and the affidavits in the
injunction application, I can find no evidence of any wrongdoing by
the incumbent. The incumbent
was not involved in any illegal
activity. In summary, the state capture enquiry did not uncover
any negative findings against
the incumbent or its current member,
which would have prevented the provincial respondents from doing
business with the incumbent.
[53]
The
applicant and
the
unsuccessful bidder both argue that the incumbent’s letters of
good standing with the security industry and their standing
regarding
workforce compliance were compromised and had expired before the
submission of their bid and/or before the granting of
the bid.
[4]
This is, in fact, one of the primary grounds upon which each
case is founded.
[54]
Regarding the security legislation, the incumbent’s
registration certificate was valid at the time
of the bid submission.
The bid invitation document stipulates that should any of the
requisite documents expire before the
award of the contract, updated,
valid documents could be requested from bidders before the award of
the contract. Thus, the
entitlement of the provincial
respondents to request updated documents is not to be unreasonably
curtailed. Moreover, an
amended letter of good standing was
issued and thus valid at the time of the tender award. Thus,
this argument by the applicant
and the unsuccessful bidder is not the
basis for sophisticated reasoning.
[55]
Regarding workplace compliance, this letter of good standing did
expire before the submission of the incumbent’s
proposal. This
scenario is dealt with in the bid document. The incumbent
explains that it was in good standing in all
respects. Still,
it had not yet received its updated letter of good standing due to an
unforeseen delay by the relevant government
department. The
incumbent attached its previous certificate as proof of registration
and authorized the provincial respondents
to verify it. In any
event, the amended updated letter of good standing was subsequently
issued.
[54]
The provincial respondents declared that following receipt of the
tenders, they verified the bidders' bids
to ensure formal compliance
regarding registration certificates and letters of good standing.
They verified the incumbent’s
good standing and that it
was compliant. A copy of the certificate of good standing was
downloaded as part of their procedures,
and the incumbent was
compliant at the time of the contract award. I am thus
stretched to begin to understand the complaints
in this connection.
[55]
The police clearance certificate is the next thing I will consider.
Some would argue that the current
member's police clearance
certificate needs to be updated. However, the bidding
specifications must be more specific on how
long police clearance
certificates must endure and when they expire. They seem
invalid only when the information they were
given is no longer
correct or the certificate must be corrected.
[56]
In this case, the fact that the time deadline had passed did not mean
that the certificate was invalid or
that the award should be thrown
out. The point is that the police clearance certificates
remained valid. In summary,
all these complaints are complaints
of no moment.
[57]
Turning now to our jurisprudence and our intervening legislation
dealing with judicial reviews. Even
before our new constitution
came into effect, there was adequate judicial precedent that an award
could be thrown out as invalid
if it was based on either no evidence
or evidence that was insufficient to make it reasonable. This
also applied to cases
where the decision-maker was required to
consider clear evidence but did not.
[58]
Our constitutional principle of legality demands that people who make
public decisions must use the powers
given to them and do their jobs
in a legal manner that makes sense and is done in good faith.
According to our constitutional
order, the provincial
respondents must follow the rule that they can only do what the law
permits. This is true generally
in all areas of their work. I
must emphasize that the legality principle is at the heart of our new
democratic dispensation.
In addition, our ‘common law’
rules about what is ‘fair and reasonable’ fashion the
ideas of the
rule of law concerning what is legal and what should be
considered illegal.
[59]
In our constitutional dispensation, our government does not have an
unlimited freedom to deal with persons
to get goods and services.
Our government's human agencies cannot buy and sell goods and
services to anyone or on their chosen
terms.
[5]
Instead, they must follow a set of rules. Further, our laws
allow for creating a national treasury and setting rules
to control
all spending levels.
[6]
These
rules include using generally accepted accounting methods,
categorizing expenses, and ensuring that all treasury norms and
standards are identical. Thus, when the government buys goods
and services, it must follow a fair, equal, open, competitive,
and
cost-effective system.
[60]
Against this canvass, the provincial respondents must set up a
procurement policy that gives certain groups
of people preference in
awarding contracts and protects or promotes people who have been
discriminated against. They must
set out a framework within
which the procurement process must take place. When the system
is set up and follows the above
constitutional requirements, the law
must be used to judge the legality of the procurement process. This
must be done while
considering the constitutional principles of
administrative justice and the fundamental values governing public
administration
and procurement.
[61]
When the provincial respondents call for bids to hire private people,
they do not have to hire the best bidder
or anyone at all. This
is the main benefit of using this method to get goods and services.
A tender invitation is just
‘an invitation to treat’
in the eyes of the law. Thus, several laws give every person
who bids on something to
the government a constitutional duty and a
right to have their bid considered during an administrative process
that is legal, reasonable,
and procedurally fair. This must be
done fairly, equitably, transparently, competitively, and
cost-effectively. Following
this process, our constitution
dictates that everyone has the right to administrative action that is
legal and reasonable.
In addition, it prescribes that anyone
whose rights have been violated by administrative action has the
right to be given written
reasons.
[7]
[62]
For these rights to be implemented, national laws were made. These
laws had to include ways for the
courts or other independent and fair
tribunals to review administrative actions. Parts of our
constitution were put into
law through specific targeted
legislation.
[8]
The
first part of this targeted legislation specifies that any
administrative action materially and adversely affecting any person's
rights or legitimate expectations is procedurally unfair. W
hen
the provincial respondents act by way of procurement following the
provisions of our constitution, they are exercising public
power and
performing a public function. Deciding to award a bid is an
administrative action, so the targeted legislation
applies.
[63]
Therefore, the provincial respondents' public power must be used in
line with the rights protected under
our constitution.
[9]
Thus,
the provincial respondents have onerous duties and must weigh up
different public interests, such as the public good from
getting a
lower price.
[10]
The
provincial respondents should do this rather than a court of law. As
a general proposition, a reviewing court must
respect:
‘…
a
decision that requires an equilibrium to be struck between a range of
competing interests or consideration and which is to be
taken by a
person or institution with specific expertise in that area…’
[11]
[64]
The targeted legislation dictates that a court could investigate
administrative action following several
criteria specified in the
targeted legislation. At the end of the day, what is required
is that the administrative action
taken must make sense.
[12]
Similarly, following the targeted legislation, our courts are vested
with the power to investigate the actions taken by the provincial
respondents that otherwise may be unlawful or violate our
constitutional principles. Also, a court can review an
administrative
action if it is illegal or not allowed by the law that
gives the power.
[65]
This means that public figures and people in power should follow the
law. Thus, it is straightforward
for me to see why the
provincial respondents opposed this application, given their
requirement of transparency and the expectation
that they engage with
this review honestly and in terms of the law. This they did so
following the letter of the law.
[66]
I turn now to the most seminal case in our procurement law, which
extensively deals with the primary issue
of materiality.
[13]
It must be so that reviewing courts should not be influenced by the
mere suspicion of wrongdoing or moral turpitude.
Innuendo and
suggestion are also unfair and unjust ways to accuse someone of
wrongdoing or moral turpitude by way of judicial review.
[67]
In addition, it is clear that small changes to a tender process do
not matter, and only significant differences
would be a reason for a
successful review under the targeted legislation. The real
question that needs to be answered is
whether the bid’s
requirement's primary goal has been met. The correct approach
regarding the materiality of compliance
with legal requirements in
administrative law has since been clarified in the seminal case
referenced earlier. Materiality
is determined by assessing the
requirements and the extent of any deviations from the tender.
[68]
Material deviations remain the only grounds for review under the
targeted legislation. It must be emphasized
that the proper
approach is to establish factually whether an irregularity occurred.
The irregularity must be legally evaluated
to determine if it
constitutes a ground of review under the targeted legislation.
The strict mechanical approach to matters
such as this one finds no
application.
[69]
The focus of emphasizing substance over form in a legal argument is
prioritizing a case's essential elements
and underlying principles
rather than getting caught up in technicalities or procedural
requirements. It involves giving
more weight to the argument's
substance, merits, and fairness rather than strictly adhering to
formalities or superficial aspects
of the law. Emphasizing
substance over form aims to achieve a just and equitable outcome. It
recognizes that the purpose
of the law is to serve justice and
protect the rights of individuals rather than becoming overly rigid
and procedural.
[70]
This approach allows for a more comprehensive analysis of a legal
dispute's facts, principles, and consequences,
ultimately leading to
a more fair and equitable resolution.
In
my view, there existed a dearth of material grounds supporting a
review of the grant of the tender to the incumbent. Put
another
way, there were no material grounds or a scintilla of evidence for
setting aside the tender awarded to the incumbent.
[71]
I say this because materiality in a tender award refers to the
significance or importance of certain factors
or criteria in the
decision-making process. It is the consideration of critical
elements that significantly impact the overall
outcome of the tender
evaluation.
[72]
These factors can vary depending on the nature of the procurement
process. When assessing materiality
in a tender award, it is
crucial to determine which aspects of the tender submission are most
critical to the project's success.
The evaluation committee or
decision-makers can prioritize these critical factors by assessing
materiality. This ensures
the decision-making process is fair,
transparent, and aligned with the tender's objectives and
requirements. The provincial
respondents did precisely this.
This notwithstanding, it is essential to emphasize that the
determination of materiality
may differ from one organization to
another or even from one project to another.
[73]
Therefore, it's essential to carefully review the tender
documentation and any specific guidelines provided
to understand how
materiality will be assessed in a particular tender award process.
In this case, the tender documents did
not prevent an external risk
assessment of the incumbent as it was a national tender. The
remaining complaints raised were
not material and were technical
objections that did not touch on the merits of the tender.
Further, the legal reasoning behind
these arguments needed to be
revised as they were highly technical and narrow.
Remedy
[74]
Following our jurisprudence, the correct test for a reasonable and
equitable resolution in matters concerning
judicial review was
formulated as follows:
'
...It
goes without saying that any incorrect use of an administrative
function implicates the Constitution and entitles the aggrieved
person to an equitable remedy. In any scenario, the remedy must be
proportionate to the harm. The solution must be fair to all
harmed
and yet successfully vindicate the right that has been violated. It
must be fair and equitable in light of the facts of
the case, any
constitutional principles and the applicable legislation.
Nevertheless, it is necessary to point out that a breach
of
administrative jurisdiction normally implies public law remedies and
not private law remedies. The goal of a public law remedy
is to
avoid, correct or reverse an abusive administrative action...'
[14]
[75]
This means that a just and equitable
remedy must have the following characteristics, and it must: (a) be
proportionate, (b) be fair
and equitable in the context of the
dispute, and (c) be comprehensive and flexible, prioritizing
substance over form. In
summary, courts must strive to be
pragmatic in exercising their reviewing powers in devising reasonable
and equitable remedies.
[76]
This does not mean that courts have the power to make any kind of
fair and just order to remedy the problem.
A public remedy aims
to prevent, remedy, or undo an improper administrative action,
provide administrative justice to the wronged
person, promote
efficient and effective public administration, and strengthen the
rule of law.
This means that a court is
enjoined to provide a fair and reasonable remedy, considering the
specific circumstances of each case.
This power ensures justice
is achieved and any unfairness or injustice is rectified.
[77]
The court may consider various factors, such as the rights and
interests of the parties involved, the principles
of fairness and
equity, and any relevant legal principles or precedents. Ultimately,
the goal is to provide a remedy appropriate
and proportionate to the
situation.
[78]
It is now appropriate to briefly explore what interim relief has been
given in this instance. The current
status quo
is that the
applicant, the twenty-second respondent, and the incumbent deliver
the services required under the security agreement
when and if
required. Given the public policy and constitutional issues in
this matter, the provisions of the interim injunction
should be
extended to allow these services to be supplied to the provincial
respondents pending the final handing over of all these
security
services to the incumbent.
[79]
This will allow these essential services to be supplied while
safeguarding the fundamental rights of all
parties. The
services will help avoid the loss of life, promote liberty and
security, prevent the impairment of property,
and promote the right
to housing. As the right to housing in certain circumstances is
linked to the right to dignity, this
is likewise guaranteed. This
court is consequently empowered to order a just and equitable remedy
to prevent potential abuses of
these constitutional rights.
[80]
This approach is compatible with the court’s powers under our
new democratic dispensation.
[15]
These powers are extensive and flexible and should be used to address
genuine disagreements between the parties. Thus,
I would be
inclined to give the applicant and the twenty-second respondent an
entire calendar month to engage with the incumbent
in the handover
process, as there may well be workplace-related issues that need to
be addressed. This would allow for a
smooth transition of these
essential services and lend some respect and dignity to the
contracted security personnel currently
employed by the applicant and
the unsuccessful bidder so they will not to be summarily stripped of
their employment on truncated
notice.
Costs
[81]
The subject of the costs of the urgent interim application is also
for determination by this court. Our
jurisprudence dictates
that special cost orders may be awarded in vexatious litigation
cases. Vexatious litigation may be
defined as frivolous,
improper or without adequate substance. I am not persuaded that
the litigation in this case was vexatious
by any parties.
Further, undoubtedly, this is a matter that requires that the
services of senior counsel be retained.
There are no
exceptional circumstances or reasons why costs should not follow the
usual party and party scale result.
Order
[82]
In the circumstances, I propose that the following order be granted:
1.
The applicant’s application and the
twenty-second respondent’s counter application for the judicial
review and setting
aside the award by the first to ninth respondents
of Tender [T002/23] to the tenth respondent are dismissed.
2.
The tenth respondent shall take over and commence
the operations required under the tender contract within
one
calendar month
of the date of this
order.
3.
The applicant and the twenty-second respondent
shall hand over such operations to the tenth respondent and do
everything necessary
to enable the tenth respondent to commence with
the required security services within the stipulated timeframe.
4.
The applicant shall pay the tenth respondent’s
costs of the review application (including the costs of two counsel
where retained).
5.
The twenty-second respondent shall pay the tenth
respondent’s costs of and incidental to the counter application
(including
the costs of two counsel where retained).
6.
The applicant shall pay the tenth respondent’s
costs of the interdict application brought under case number 9698 /
2023.
7.
There shall be no further orders regarding costs.
E.D.
WILLE
(Cape
Town)
GAMBLE, J:
INTRODUCTION
[83]
I concur with the order proposed in the first
judgment for the
reasons set forth hereunder.
THE
MATERIAL FACTS
[84]
Since about 2019, the first to ninth respondents
(collectively
referred to hereinafter as “the Province”) have been
attempting to procure a service provider for certain
security
services required to protect their immovable assets. In particular,
the Province sought to avoid the unlawful occupation
and
vandalisation of its land when under construction for public housing
projects. This necessitated the availability of a specilaised
unit of
security personnel which might be deployed rapidly to nip the problem
of illegal occupation of the land in the bud, or
to remove structures
illegally erected on the Province’s property. The Province set
about this task by advertising a tender
which was initially responded
to by, inter alia, the applicant (Seal), the tenth respondent
(Royal), the eleventh respondent (Red
Ant) and the twenty second
respondent (Tyte).
[85]
That tender (the original tender) was allocated
by the Province to
Seal and Tyte in April 2021. Red Ant was dissatisfied with the
allocation of the original tender and sought
to review the allocation
thereof in this Division under case no. 9370/2021, citing the
Province’s erstwhile Department of
Human Settlements
[16]
,
Seal and Tyte as respondents.
[86]
When the matter came before Binns-Ward J in June
2022, it was common
cause that the Province had bungled the process and that the original
tender fell to be set aside. On 8 August
2022, His Lordship delivered
a considered judgment and, inter alia, granted an order declaring
that the original tender was invalid
and fell to be reviewed. The
court suspended the declaration of invalidity and directed that an
expedited process be commenced
de novo
in order to procure the
same services. That process was to be completed within six months.
The Solomonic intention of the suspension
of the declaration of
invalidity was to permit Seal and Tyte to continue to discharge their
obligations under the original tender,
thus providing the Province
with services it so desperately required.
[87]
The Province then embarked on a fresh exercise
to procure a suitable
service provider. On 21 April 2023 it advertised a revised tender
(the subject of this review) through the
issue of a competitive
bidding document. I shall refer to this as the new tender.
Prospective bidders were invited to bid for a
fixed term contract of
24 months with the closing date being 9 May 2023. Certain of the
relevant details in the bid document in
the new tender will be
referred to later in this judgment.
[88]
At the closing date of the new tender 14 bids
had been submitted
including those of Seal, Tyte and Royal. These bids were classified
by the Province as “responsive bids”
and accordingly
clause 9.4 of the bid document came into operation. That clause
establishes a procedure for the evaluation of responsive
bids in
terms of –
(i) functionality,
(ii) price,
(iii) preference, and
(iv) assessment of risk.
[89]
I shall deal with these individual criteria more
fully below. Suffice
it to say at this juncture that when the responsive bids were
subjected to the functionality test, 10 of them
failed with only
Seal, Tyte, Red Ant and Royal passing muster on this score. The
Province was further satisfied that each of these
4 bidders passed
the price and preference criteria and it then considered risk
assessment. As far as price was concerned, Royal
(at R282m) was
significantly lower than Red Ant (R391m), Seal (R365m) and Tyte
(R350m): the pre-tender estimate by the Province
having been
calculated to be R345m. After considering that all 4 of the
qualifying bidders passed the functionality, preference
and risk
assessment criteria, the Province awarded the tender to Royal on
account of its significantly lower price.
[90]
The evaluation of the bids was conducted by the
Province’s Bid
Evaluation Committee (the seventh respondent) and the adjudication
thereof was conducted by the Province’s
Bid Adjudication
Committee (the eighth respondent). On 31 May 2023 the Province
informed Royal in writing that the bid had been
awarded to it in the
tendered amount referred to above. Royal was further informed that
the 24 month period of the contract
awarded under the new tender
would run from the date of the letter.
STEPS
IN THE CURRENT LITIGATION
[91]
Seal lost little time in responding to its failure
to secure the
contract. On 15 June 2023, it approached this court with a brace of
associated applications. Firstly, it applied
under case no 9698/23
for an urgent interim order stopping the implementation of the tender
in its tracks. I shall refer to this
as “the urgent
application.” At the same time, and under case no 9697/23, it
sought an order urgently reviewing and
setting aside the allocation
of the tender to Royal. That is the review currently before this
Court.
[92]
It bears mention that Royal did not follow the
by now customary
approach by asking for Part A (interim interdictory) and Part B
(final review relief) in a single application.
It could not do so
because it fired off its salvo demanding urgent judicial intervention
even before it had requested (let alone
procured) the Province’s
reasons for its decision. Seal’s approach demonstrates that it
was intent on securing the
tactical advantage it had secured in the
litigation involving the setting aside of the original tender: if it
could stall the implementation
of the new tender, it and Tyte could
remain in the driving seat and continue to perform the services which
they had never acquired
under a validly issued tender.
[93]
On 27 June 2023 the urgent application was heard
by Francis J. His
Lordship granted the interim relief sought and fixed a timetable for
the filing of the papers in the review.
By way of an interim
arrangement, Seal and Tyte remained in the driving seat but had to
take on Royal as a passenger in the interim
execution of the
contract, with delivery of the services being split geographically
across the Province. In agreeing to that interim
arrangement, Seal
and Tyte did not question Royal’s ability to perform its
allocated functions.
[94]
The Province and Royal opposed the review (which
was intended to
secure the entire contract for Seal), while Tyte opposed Seal’s
application and filed a counter application
which would make it the
sole provider of services to the Province. And, of course, costs
orders were sought all round.
[95]
The review application was set down for hearing
on Friday 3 November
2023 in circumstances where it ought to have been manifestly clear to
the parties that argument would not
be concluded in a day. The matter
was thus postponed at the suggestion of the Court and as it turned
out, argument lasted 3 days
– from 28 to 30 November 2023 –
whereafter judgment was reserved with the interim order of Francis J
to remain in place.
[96]
The application by Seal is cast in strident and
sometimes emotive
language with aspersions of corruption and fraud bandied about.
Tyte’s application is more focused. At
the end of it all,
though, matters crystalised and the issues were fairly limited.
THE
APPROACH ON REVIEW
[97]
It is trite that a review such as this is to be
determined under the
provisions of PAJA
[17]
:
the relevant authorities are set out in [98] below. Before detailing
the individual grounds of review eventually settled upon
by Seal and
Tyte, I propose to briefly set out the approach mandated by the
Constitutional Court in reviewing procurement cases
such. The leading
matter is
AllPay
[18]
which
concerned the allocation of a contentious procurement contract for
the payment of social security grants to needy South Africans.
The
matter generated a series of judgments in the apex court and the
Supreme Court of Appeal (SCA), including
AllPay
SCA
[19]
.
[98]
However, before considering the import of
AllPay
, it is
instructive to have regard to what Froneman J said in that case about
the general principles of State procurement in our
law.
“
(c)
Procurement framework legality
[31]
In
Steenkamp
,
[20]
Moseneke
DCJ stated:
“
Section
217 of the Constitution is the source of the powers and function of a
government tender board. It lays down that an
organ of State in
any of the three spheres of government, if authorised by law may
contract for goods and services on behalf of
government.
However, the tendering system it devises must be fair, equitable,
transparent, competitive and cost-effective.
This requirement
must be understood together with the constitutional precepts on
administrative justice in section 33 and the basic
values governing
public administration in section 195(1)…
In
Millennium
Waste
[21]
the
Supreme Court of Appeal (per Jafta JA) elaborated:
“
The
. . . Constitution lays down minimum requirements for a valid tender
process and contracts entered into following an award of
tender to a
successful tenderer (section 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 that the provisions of [PAJA] apply
to the process.”
[32]
The starting point for an evaluation of the proper approach to an
assessment of the
constitutional validity of outcomes under the state
procurement process is thus section 217 of the Constitution:
‘
(1)
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.
(2)
Subsection (1) does not prevent the organs of state or institutions
referred to in
that subsection from implementing a procurement policy
providing for―
(a)
categories of preference in the allocation of contracts; and
(b)
the protection or advancement of persons, or categories of persons,
disadvantaged
by unfair discrimination.
(3)
National legislation must prescribe a framework within which the
policy referred to
in subsection (2) must be implemented.’
[33]
The national legislation prescribing the framework within which
procurement policy
must be implemented is the Preferential
Procurement Policy Framework Act
[22]
(Procurement
Act). The Public Finance Management Act
[23]
is
also relevant.
[34]
An “acceptable tender” under the Procurement Act is any
“tender
which, in all respects, complies with the
specifications and conditions of tender as set out in the tender
document”.
The Preferential Procurement
Regulations
[24]
(Procurement
Regulations) define a tender as “a written offer in a
prescribed or stipulated form in response to an invitation
by an
organ of state for the provision of services, works or goods, through
price quotations, advertised competitive tendering
processes or
proposals”.
[35]
An organ of state must indicate in the invitation to submit a tender:
(a)
if that tender will be evaluated on functionality;
(b)
that the evaluation criteria for measuring functionality
are
objective;
(c)
the evaluation criteria, weight of each criterion,
applicable values
and minimum qualifying score for functionality;
(d)
that no tender will be regarded as an acceptable
tender if it fails
to achieve the minimum qualifying score for functionality as
indicated in the tender invitation; and
(e)
that tenders that have achieved the minimum qualification
score for
functionality must be evaluated further in terms of the applicable
prescribed point systems.
[36]
The object of the Public Finance Management Act is to “secure
transparency,
accountability and sound management of the revenue,
expenditure, assets and liabilities of the institutions” to
which it
applies, SASSA being one of them. Section
51(1)(a)(iii) provides that an accounting authority for a public
entity must ensure
and maintain “an appropriate procurement and
provisioning system which is fair, equitable, transparent,
competitive and cost-effective”.
(All internal references
omitted)
[99]
Froneman J commenced his evaluation of the review
in
AllPay
,
by pointing out that in
AllPay SCA
that court had sought to
distinguish between irregularities in the procurement process that
were described as, on the one hand,
“inconsequential”
and, on the other hand, “immaterial”
.
“
[19]
AllPay argues that the Supreme Court of Appeal’s analysis was
flawed. On the approach of the Supreme Court of Appeal,
an
inconsequential irregularity is an irregularity which, despite its
existence, would not affect the final outcome of the award.
On this
approach, an irregularity is inconsequential when, on a hindsight
assessment of the process, the successful bidder would
likely still
have been successful despite the presence of the irregularity. This
focus on an inconsequential irregularity is a
different enquiry from
that commonly used where the courts look at immaterial
irregularities.” (Internal references omitted)
[100]
The learned Justice stressed that the correct approach
was as
follows.
“
Proper
legal approach
[22] This judgment holds
that:
(a) The suggestion that
“inconsequential irregularities” are of no moment
conflates the test for irregularities and
their import; hence an
assessment of the fairness and lawfulness of the procurement process
must be independent of the outcome
of the tender process.
(b) The materiality of
compliance with legal requirements depends on the extent to which the
purpose of the requirements is attained.
(c) The constitutional
and legislative procurement framework entails supply chain management
prescripts that are legally binding.
(d) The fairness and
lawfulness of the procurement process must be assessed in terms of
the provisions of the Promotion of Administrative
Justice Act18
(PAJA).
(e) Black economic
empowerment generally requires substantive participation in the
management and running of any enterprise.
(f) The remedy stage is
where appropriate consideration must be given to the public interest
in the consequences of setting the
procurement process aside.”
[101]
Froneman J discussed the materiality of an alleged
irregularity in
the procurement process as follows.
“
(b)
Materiality
[28]
Under the Constitution there is no reason to conflate procedure and
merit. The proper approach is to establish, factually,
whether an
irregularity occurred. Then the irregularity must be legally
evaluated to determine whether it amounts to a ground of
review under
PAJA. This legal evaluation must, where appropriate, take into
account the materiality of any deviance from legal
requirements, by
linking the question of compliance to the purpose of the provision,
before concluding that a review ground under
PAJA has been
established.
[29]
Once that is done, the potential practical difficulties that may flow
from declaring the administrative action constitutionally
invalid
must be dealt with under the just and equitable remedies provided for
by the Constitution and PAJA. Indeed, it may often
be inequitable to
require the re-running of the flawed tender process if it can be
confidently predicted that the result will be
the same.
[30]
Assessing the materiality of compliance with legal requirements in
our administrative law is, fortunately, an exercise unencumbered
by
excessive formality. It was not always so. Formal distinctions were
drawn between “mandatory” or “peremptory”
provisions on the one hand and “directory” ones on the
other, the former needing strict compliance on pain of non-validity,
and the latter only substantial compliance or even non-compliance.
That strict mechanical approach has been discarded. Although
a number
of factors need to be considered in this kind of enquiry, the central
element is to link the question of compliance to
the purpose of the
provision. In this Court O’Regan J succinctly put the question
in
ACDP
v Electoral Commission
[25]
as
being ‘whether what the applicant did constituted compliance
with the statutory provisions viewed in the light of their
purpose’.
This is not the same as asking whether compliance with the provisions
will lead to a different result.” (Internal
references omitted)
[102]
The record reflects that the Province advertised and
evaluated the
tender process in accordance with its own supply chain policy and
regulations. It is not contended that the process
was thus unlawful
because the Province operated without the requisite procurement
instruments in place
[26]
.
Rather, and aside from the first ground
infra
raised
by Seal, it is contended that the Province committed a series of
reviewable errors under its own procurement policies which
warrant
the setting aside of the allocation of the tender to Royal.
[103]
Against that tapestry, I proceed to set out the several
grounds of
review relied upon by Seal. All but the first alleged irregularity,
were similarly relied upon by Tyte.
GROUND
1 – STATE CAPTURE
[104]
In its founding affidavit, Seal complains that “
Royal
Security has been
named
by the Zondo Commission
[27]
and
implicated in extensive State capture activities
”
and
castigates the Province for treating its allegations in that regard
with disdain. The Province is accused of “
willfully
”
disregarding
the allegedly adverse comments made in the Zondo Commission Report
(the Report) about Royal when deciding to award
the tender to it.
[105]
In its affidavit, Seal reproduces an excerpt from the
Report in which
there are references to a certain Mr. Roy Moodley and alleges that he
has an interest in various companies, including
Royal. The clear
insinuation is that the Province has appointed a service provider
which is corrupt and involved in allegations
of State capture and
that the conduct of the Province is similarly egregious. These
allegations are persisted with in the replying
affidavit and the
heads of argument filed on behalf of Seal.
[106]
In
AllPay SCA
Nugent JA cautioned against the making of such
allegations in a matter such as this.
“
[3]
It is as well at the outset to clear the atmosphere in which this
case has been conducted so as to have certainty on what is
before us.
[4] Whatever place mere
suspicion of malfeasance or moral turpitude might have in other
discourse it has no place in the courts
– neither in the
evidence nor in the atmosphere in which cases are conducted. It is
unfair if not improper to impute malfeasance
or moral turpitude by
innuendo and suggestion. A litigant who alleges such conduct must do
so openly and forthrightly so as to
allow the person accused a fair
opportunity to respond. It is also prejudicial to the judicial
process if cases are adjudicated
with innuendo and suggestion
hovering in the air without the allegations being clearly
articulated. Confidence in the process is
built on transparency and
that calls for the grounds upon which cases are argued and decided to
be openly ventilated.
[5] The affidavits of
AllPay evoke suspicion of corruption and dishonesty by innuendo and
suggestion but without ever making the
accusation directly and to a
degree that has carried over to the heads of argument filed on its
behalf. To clarify the position
AllPay’s counsel was asked at
the outset of the hearing whether corruption or dishonesty was any
part of its case, and that
was unequivocally disavowed. It confined
its case to what were said to have been fatal irregularities and it
was on that basis
that the appeal proceeded.”
[107]
The Zondo Commission point was not abandoned but counsel
for Seal did
not formally address the Court on it either, preferring to stand by
the submissions in the heads. Nevertheless, it
remains part of Seal’s
attack on the unlawful award of the tender to Royal and must thus be
dealt with briefly.
[108]
In the first place, the extract from the Report annexed
to the
founding affidavit does not say what Seal claims it does. The Report
refers to the alleged misconduct of Mr. Moodley in
relation to his
dealings with, inter alia, the Passenger Rail Association of South
Africa (PRASA). While mention is made in a single
sentence that Mr.
Moodley had “
direct or indirect interests in several
companies that provided services to PRASA, including Royal Security
…”
there is no evidence placed before this Court to indicate the extent
of Mr. Moodley’s association with Royal,
whether corporate or
otherwise. Further, the Report does not suggest that Royal per se was
guilty of any criminal or other improper
conduct
[109]
Secondly, Royal has denied in its answering affidavit
that Mr.
Moodley was a director of Royal at the time of the tender, an
allegation which stands uncontested. Thirdly, it is common
cause that
Royal has not been placed on any list by any organ of State which
would preclude it from tendering to do business with
the State.
[110]
Fourthly, in its replying affidavit, Seal attempts
to dredge up
further dirt on Seal by referring to a transcript of one of the Zondo
Commission’s hearings in which it was
claimed that Royal had
been involved in potential acts of corruption more than 10 years ago.
Leaving aside for the moment the fact
that Seal improperly sought to
introduce new matter in reply without the permission of the Court,
the passage relied upon relates
to the address of one of the Zondo
Commission’s evidence leaders in which he sketched the evidence
which he intended presenting.
The transcript contains no evidence
presented to, nor any findings made by, the Zondo Commission in
relation to Royal.
[111]
These loose and unsubstantiated allegations have no
place in a review
such as this and only serve as a patent attempt to debase the
integrity of the tender proceedings conducted by
the Province. Little
wonder then that Tyte refused to support Seal on this front. There is
no merit in the first ground of review.
GROUND
2 – NON-COMPLIANT LETTERS OF GOOD STANDING
[112]
One of the express requirements of the bid document
was that
interested parties were required to provide documentary proof of
their good standing within the security industry. Firstly,
tenderers
were to file a letter from PSIRA
[28]
confirming
that they were registered with it, that their registration was up to
date and that their dues had been paid. Secondly,
tenderers were
required to establish that their COIDA
[29]
registration
was in order and that their contributions to that fund were current.
Thirdly, there was a series of police clearance
certificates relating
to the authorization to possess firearms which had to be lodged as
part of the bid document.
PSIRA
[113]
Royal’s registration certificate with PSIRA had
been issued on
8 August 2022 and was valid for 12 months. The company was thus
validly registered at the time its bid was lodged
on 9 May 2023. In
addition to proving that it was duly registered, Royal had to show
that its PSIRA levies were up to date. To
do so, it procured a letter
of good standing from PSIRA which was included with the documents
that accompanied its bid. Those bid
documents were signed at Royal’s
head office in KwaZulu-Natal (KZN) on 2 May 2023 and included a PSIRA
letter of good standing
which expired on 8 May 2023. Evidently, the
bid documents were then couriered to Cape Town for submission to the
Province by 9
May 2023. Accordingly, when the bid was opened on 9 May
2023 its PSIRA letter of good standing had lapsed the day before. In
its
answering affidavit, Royal says that PSIRA does not issue updated
letters of good standing before the lapse of the previous document.
It says it was thus unable to apply for a new document before 9 May
2023.
[114]
Relying on the terms of cl 10.2 of the bid document
[30]
,
the Province requested Royal to furnish it with an updated letter of
good standing from PSIRA. Royal complied with this request
on 7 June
2023 and emailed to the Province a copy of a PSIRA letter dated 16
May 2023, which stated that Royal was in good standing
until 14
August 2023.
[115]
Seal complains that by purporting to act under cl 10.2
in these
circumstances, the Province committed a material irregularity because
the document had expired prior to submission of
the bid, not after
submission and before allocation of the tender. Further, Seal argued
that this instance was identical to that
which obtained before
Binns-Ward J in June 2022 and that the tender fell to be set aside on
that basis alone.
[116]
In the first instance, the case is fundamentally different
to that
which was considered Binns-Ward J. In that matter, Seal did not
submit any proof whatsoever that it was in good standing
with PSIRA.
Here, the letter had lapsed the day before the bid was submitted and
it is reasonable to understand the difficulty
Royal had in timeously
procuring an updated letter by 9 May 2023. Most importantly, though,
by the time its tender was evaluated
by the Province, Royal was, as a
matter of fact, in good standing with PSIRA.
[117]
In my considered view, the present situation falls
squarely within
the approach sanctioned in
AllPay
. The purpose of requiring
Royal to submit a letter of good standing was to ensure that it was
in good standing with PSIRA at the
time the tender was issued and
this was factually established. The materiality of Royal’s
compliance has been conclusively
established and in the circumstances
there has been no violation of the rights of either Seal or Tyte to
just and fair administrative
action. The PSIRA argument must thus
fail.
COIDA
[118]
The COIDA point is really a different shade of grey.
Royal’s
bid included a letter of good standing under COIDA which had expired
on 30 April 2023. In its bid document it explained
that it was
currently in good standing with the Department of Labour in all
respects but that it had not yet received the requisite
letter due to
an alleged unforeseen delay on the part of the Department. It
attached its earlier certificate as proof of registration
and
consented to the Province verifying this should the need arise.
[119]
In the process of evaluating the bid the Province took
its own steps
to verify whether Royal was in good standing with the Department of
Labour by downloading a copy of the COIDA letter
of good standing
from the internet. In my considered view, this situation is similarly
addressed by the materiality approach advocated
in
AllPay
.
Royal was hamstrung by bureaucratic issues beyond its control and was
unable to furnish an updated letter through no fault of
its own. But
the point remains – it was COIDA compliant when the tender was
awarded.
[120]
Once again, Seal and Tyte have not established that
their rights to
fair and just administrative action have been materially affected and
the review must fail on the COIDA point too.
Police
Clearances
[121]
Lastly, there was a requirement that Royal’s
director was
required to submit a police clearance certificate. Seal complains in
its supplementary founding affidavit that the
document lodged by Seal
was outdated. The problem that Seal has is that there is no statutory
or regulatory provision that it could
rely on to establish that such
a certificate was time bound and had a limited shelf-life.
[122]
In its heads of argument, Seal seeks to extricate itself
from its
self-created snare by referring to provisions of the Immigration Act
and the regulations promulgated thereunder which
fix a time-period
for the validity of a police clearance certificate issued in relation
to immigration applications. The inapplicability
of the comparison is
self-evident. The Immigration Act and its regulations are specific to
that area of the law and do not create
a binding requirement in
respect of police clearance certificates generally. This ground of
review must similarly fail.
GROUND
3: FUNCTIONALITY
[123]
As para [35] of
AllPay
makes plain, if the invitation to
tender prescribes functionality as a criterion for consideration by
the evaluating authority,
there are a number of considerations that
come into play. In this case, para 9.4 of the bid invitation sets the
parameters for
the evaluation by stating that “
The procedure
for the evaluation of responsive bids is
Functionality
,
Price
and
Preferenc
e
.”
[124]
The invitation proceeds to set out the manner in which,
first,
functionality will be scored. To this end the bidder is to complete a
lengthy questionnaire in tabular form in which all
manner of its
operational abilities is assessed through a self-scoring exercise.
The bidder is informed that it must achieve a
minimum score of 70% on
functionality before it will be entitled to be evaluated on the price
and preference criteria. The price
tendered is then evaluated
according to a prescribed formula, as is the tenderer’s
entitlement to claim points for preference
under the relevant
Preferential Procurement Regulations of 2022. This step involves the
consideration of Black economic empowerment
scoring. The Province’s
evaluation of Royal’s “Risk Assessment” (the last
criterion for consideration)
was a keenly contested aspect of this
case and will be dealt with later in this judgment.
[125]
Before doing so it is necessary to consider Seal’s
attack on
the Province’s assessment of Royal’s functionality score.
As is customary in exercises of this kind, the
losing bidder embarks
on a detailed examination of the scoring exercise in an endeavour to
reduce the winner’s score below
the set minimum - here 70%. It
is a painful and pedantic exercise in nit-picking in which points are
sought to be pared down bit
by bit until the aggregate score is
reduced to below the threshold. In an attempt to avoid prolixity, I
shall endeavour to deal
only with the most important functionality
arguments raised by Seal.
Mr.
Ndhlovu
[126]
Seal alleges, firstly, that an incorrect scoring was
provided by
Royal in respect of the experience of its contracts manager, Mr.
Themba Ndhlovu, who is singled out for allegedly failing
to make the
20 year mark required for his experience to count in full. In the bid
document, Mr. Ndhlovu’s experience is listed
with 4 different
employers in the aggregate of 18 years, the last of which was with a
firm called Isidingo Security Services (Isidingo).
Seal proclaims
that he is short of 2 years and that Royal’s score of 5 points
for this employee should have been marked down
accordingly.
[127]
The Province counters this challenge by pointing out
that according
to his curriculum vitae, Mr. Ndhlovu had last worked for Isidingo in
2018 and that Seal had not taken his employment
over the period 2018
– 2023 into account. It had thus accepted Royal’s answer
that Mr. Ndhlovu had the requisite 20
year period of employment in
respect of the points claimed, on the assumption that he had been
employed in the interim by Royal.
Training
[128]
Then there is the scoring on Royal’s training
practices where
it was scored 9 out of a possible 10 points. Seal complains,
for instance, that there is no supporting documentation
that a
designated training company had been duly accredited; that no
training certificates were attached and that the names of
persons
allegedly trained were repeated on the attendance registers at such
training.
[129]
The Province argues, in my view quite correctly, that
Seal has sought
to demand a level of detail which was not called for. Importantly,
there is no provision in the bid document which
provides that the
failure to render the level of detail contended for by Seal would
lead to disqualification of the tender.
Firearms
[130]
Next there is the scoring for firearms, in particular
handguns and
shotguns, which Seal complains was incorrectly calculated. In
particular, it complains about one mark out of a possible
four being
awarded in respect of shotgun proficiency. In my view, Seal has
misinterpreted the import of paragraph 6.1 of the functionality
assessment.
[131]
That paragraph provides for a sliding scale, which
operates as
follows. Clause 6.1.1.1 provides for a maximum of 24 staff and
shotguns, for which one point will be awarded. In other
words,
anything below this threshold qualifies for one point. The provision
does not stipulate, as Seal seeks to suggest, that
it is only if a
minimum of 24 shotguns are available, one point will be awarded.
Clause 6.1.2 contains a similar sliding scale
in respect of handguns.
[132]
Clauses 6.1.1.2 and 6.1.2.2 of the functionality assessment
state
that for between 25 and 50 staff and shotguns or handguns, as the
case may be, a maximum of two points is available to be
claimed.
Thus, this requirement has a minimum threshold - the bidder must have
25 or more, and fewer than 50, staff and handguns
or shotguns to
obtain the necessary points. And finally, there are clauses 6.1.1.3
and 6.1.2.3 which provide that if there is in
excess of 51 staff and
shotguns or handguns, the bidder is entitled to claim a maximum of
four points.
[133]
Royal put up three valid shotgun competency certificates
and two
valid handgun certificates. In the circumstances the awarding of one
point out of four in respect of these firearms by
the Province cannot
be assailed.
Reaction
teams
[134]
Seal makes a similar complaint regarding the fact that
Royal was
incorrectly awarded three points (out of a possible ten) in respect
of the claim for its reaction team. Once again the
relevant table in
the bid document comprises a sliding scale with a minimum of three
points on offer if the bidder has a minimum
of 24 staff and shotguns
available for its reaction team – there is no mention of
handguns. Thus Royal was allocated the
minimum number of points in
view of the size of its staff component and the Province has not been
shown to have erred in that regard.
Competency
certificates
[135]
Seal’s next quibble relates to competency certificates
issued
to firearm licensees employed by Royal. It says that the competency
certificates issued to a number of Royal’s personnel
had
expired and that the Province erred in allocating points on this
score. The Province and Royal both contend that under the
Firearms
Act
[31]
a
competency certificate is a document that is to be distinguished from
a firearm licence.
[136]
The Province contends further that if s10(2) of the
Firearms Act is
properly interpreted it is apparent that a competency certificate
runs hand-in-hand with a firearm licence: for
so long as firearm
holders’ licences are valid, their competency certificates
remain valid and, when the former lapse after
5 years, so do the
latter. Royal has produced a series of competency certificates that
are prima facie valid and there is no obvious
reason to doubt this.
[137]
In reply to this argument, Seal relies on sections
10, 20 and 27 of
the Firearms Act to contend that a competency certificate used for
business purposes automatically expires after
five years. In my view,
the argument is flawed. Section 10(2) provides that a competency
certificate remains valid for the duration
of the validity of the
licence to which it attaches. Section 27 provides that the period of
validity of a firearm used for business
purposes, not the competency
certificate, is 5 years. Then section 28(1)(a) provides that a
licence issued under that act only
terminates on the expiry of the
relevant period contemplated in section 27, unless it is renewed in
terms of section 24.
[138]
Consequently, the position is that when a firearm licence
is renewed,
the competency certificate to which it relates retains its validity
and does not terminate automatically after any
specified period. It
follows, in my view, that there was no reason for the Province to
conclude that the relevant competency certificates
complained of had
expired and, as mentioned already, the certificates themselves appear
on the face of it to be valid. In the circumstances,
there is no
merit in the claim that Royal’s employees’ competency
certificates are not in order.
[139]
For these reasons, the complaints raised by Seal under
ground 4 do
not support its claim that the allocation of the tender falls to be
reviewed.
GROUND
4: OPERATIONAL RISK ASSESSMENT - “A SECOND BITE AT THE CHERRY”
[140]
This ground of review was the most hotly contested
area in argument.
The background to the argument is that the bid document required a
physical assessment of a tenderer’s
ability to render the
services tendered for after a so-called desk-top assessment had been
made. Broadly speaking, this involved
employees of the Province’s
Department of Police Oversight and Community Safety (DoCS) visiting a
tenderer’s premises
and conducting an inspection to see whether
it measured up to the requirements of the bid document. This is
called an Operational
Risk Assessment (ORA) and its purpose was to
evaluate what risk of failure might eventuate if the tender was
awarded.
The
Bid Document
[141]
For the sake of completeness it is necessary to quote
in extenso
from the bid document regarding the ORA in order to evaluate the
issues in dispute.
“
9.4.4
Risk
Assessment
The highest scoring
bidder, after the evaluation of Functionality, Price and Preference,
will be subjected to an operational risk
assessment to
verify
the actual ability of the bidder to provide the services in
accordance with the scope of the work set out in the bid documents
relevant to the risk for the [Province] in using the highest scoring
bidder to render the services. The risk assessment takes,
inter alia,
into account quality, reliability, viability and durability of a
service and the bidder’s technical capacity
and ability to
execute the contract.
The operational risk
assessment will be performed in terms of an evaluation performed by
the Department of Police Oversight and
Community Safety (DoCS)
according to the criteria set out in the Operational Risk Assessment
attached hereto as
Schedule D4
.
In
accordance with section 5 of the PSIRA regulations, every security
business applying for registration as a security service provider
must, for the purposes of compliance with the provisions of section
23(2)(b) of the Act
[32]
have
the infrastructure as listed under Infrastructure and capacity
necessary to render a security service and as such the operational
risk assessment will assess whether the prospective service
provider’s business has the capacity, knowledge,
infrastructure,
support and systems in place, relevant to the risks
involved to deliver the required security service.
The Department Of
Infrastructure, via DoCS, reserves the right to conduct in person
visits to the premises of any prospective bidders
and those of the
references provided by prospective bidders, to assess the operational
capabilities of bidders applicable to this
bid relevant to the risks
involved.
The highest scoring
bidder will achieve a risk assessment score (by using the Operational
Risk Assessment hereto attached as Scheduled
D4) which is then
converted to a risk rating that will enable the [Province] to make an
informed decision as to the level of expected
service and the risk
tolerance that the [Province] is willing to absorb.
The
operational risk assessment will result in a score that will equate
to a risk rating as depicted in Table 1, below…
[33]
The
minimum qualifying
score is 61%
in order to pass the risk assessment in accordance
with the Purchaser’s acceptable supplier risks tolerance
categories of
moderate and low.
Should the highest
scoring bidder not achieve the minimum score of 61%, the bidder will
not be considered further, and the process
of the operational risk
assessment shall be repeated with the second highest scoring bidder,
and the process may be further repeated,
if necessary, until a bidder
achieves the minimum qualifying score. This is also done in the
interest of time and to avoid the
[Province] spending unnecessary
time and cost on assessment of all bidders which have passed the
minimum functionality threshold.
The successful bidder’s
risk remains valid for a year after which it will be reviewed by
the…DoCS… according
to the criteria set out in the
attached Operational Risk Assessment.
While the operational
risk assessment will be done by means of personal interviews, site
visits and reference checks, the operational
risk assessment is
guided by Regulation 5 of the Private Security Industry Regulation
Act, 2001 (Act No. 56 of 2001).
The operational risk
assessment questionnaire is structured in such a manner that a set of
questions relating to a specific security
service function, may be
applicable to more than one security service category/categories and
service items per category.
The operational risk
assessment will include but is not limited to the evaluation of the
following aspects of delivering a security
service to the [Province]
and Provincial Public Entities.
a) Management profile…
b) Communication…
c) Training…
d) Control Room…
e) Security Vehicles…
f) Firearm Management…
h) (sic) Armed Response
Vehicles…”
The
bid document contains detail of each of these elements of the
operational risk assessment.
[142]
Because of the time limits imposed on the revised process
by the
order of Binns-Ward J, the Province, in contradistinction with its
expressed intention contained in the passage referred
to above,
decided to conduct an ORA of all four of the qualifying bids
simultaneously. It explains that its thinking in this regard
was that
it wanted to avoid an unnecessary delay in the event that the first
risk assessment failed to make the grade and it was
then required to
assess the remaining bidders
seriatim.
The
ORA procedure adopted
[143]
While Seal and Tyte are both based in the Western Cape,
Royal is not:
as stated its head office is in KZN. Believing that the contract was
intended exclusively for local firms, Seal attacked
the manner in
which the Province went about conducting Royal’s ORA by
assessing two aspects thereof (armed guarding and armed
response
vehicles) at its head office.
[144]
In the founding affidavit Seal says that the ORA of
Royal was
conducted twice – on 22 May 2023 in Bellville and on 29 May
2023 in KZN – whereas it and Tyte were only assessed
once. Seal
goes on to assert that Royal had performed “dismally” in
the Bellville assessment and that it was afforded
a second
opportunity to cure the “deficiencies uncovered” during
the first assessment. Hence, Seal and Tyte’s
claim that Royal
was afforded the proverbial second bite at the cherry.
[145]
In its answering affidavit the Province explains what
happened.
“
30.
The first assessment of which Seal complains, which took place on 22
May 2023, was conducted by representatives of the [DoCS]
pursuant to
clause 9.4.4 of the bid document. A full copy of the report of the
assessment is attached… I refer in particular
to paragraphs
3.1 of the report. This shows that, in respect of Royal Security,
item A.2, in respect of armed guarding, and item
A.7, in respect of
armed response vehicles were ‘not assessed’. The reason
for these aspects not being assessed is
provided in the fourth bullet
point under the table, which is to the effect that the relevant
assets were at the Durban head office
of Royal Security. Accordingly,
on the face of it, the assessment was incomplete.
31.
When regard was had
by the [Province’s] officials to the above
mentioned risk assessment, it was realized that it had been conducted
at the incorrect
address: whereas Royal Security had leased premises
in Bellville in order to establish a presence in the Western Cape,
its head
office was in Durban, where its principal resources were
located. I refer in this regard to the bid document of Royal
Security,
from which it was apparent that its head office was in
Durban… For this reason, it was considered that it would be
unfair
to Royal Security not to have it assessed at its head office,
and for this reason it was assessed at its head office in Durban on
29 May 2023.”
[146]
In denying that it acted unfairly towards Seal and
Tyte, the Province
goes on to say that it was concerned that a failure to conduct a
complete ORA of Royal at both premises might
have been unfair to
Royal and exposed it to a review application by the latter. It points
out further that the scoresheet for Royal’s
ORA was not
manipulated as alleged by Seal but rather that some aspects of the
ORA were conducted in Bellville and the others in
KZN.
[147]
The Province’s affidavit also deals with Seal
and Tyte’s
allegations that Royal did not have the capacity, skills or
infrastructure in the Western Cape to render the required
services
under the contract.
“
37.
The bid invitation was an open bid, advertised nationally and
provincially in the Western Cape. No bidder was prohibited from
participating in the bidding process because its principal operations
were not in the Western Cape. The clear purpose of this approach
was
not to confine the submissions of bids to only local, Western Cape
based companies; and to broaden the reach of the advertisement
in
order to enhance competition between bidders, which would result in a
more competitive and cost-effective process. These are
all core
considerations enshrined in section 217 of the Constitution.
38. The bid document did
not provide that an assessment could not be done outside the borders
of the Western Cape. On the contrary,
it was logical and fair that,
if a bidder’s head office and its principal resources were
outside the borders of the Western
Cape, it should be assessed there.
39.
Paragraph 11 of the bid document… states that it is required
that a service provider ‘either have a registered
office
[34]
/control
room or provable presence within the area they are tendering, all the
service provider must indicate in its response to
the bid the
mechanism the service provider will use for the management control of
the guards in that area in the absence of a physical
presence in the
area.’
40. Royal Security
complied with this requirement: it furnished as part of its bid a
lease agreement in respect of its premises
in Bellville.
41. I wish to add the
following in respect of this issue: it could never be expected of a
bidder, in the particular circumstances,
to have all of its resources
ready and available in the Western Cape at the time of bidding. This
would simply be impractical,
and would serve to exclude worthy
bidders. Rather, the approach was that regard should be had to the
resources of the particular
bidder, even if these were situated
outside the borders of the Western Cape. Obviously, this would
require operational and management
steps to be taken by a successful
bidder, in this case Royal Security, once the tender was awarded. If,
for example, it failed
to perform in any of its duties, this would be
taken up with it on an operational level where penalties would be
applied where
appropriate.
42. Finally, on this
topic, I should point out that after the award of the tender, and
pursuant to an order by Justice Francis in
respect of the interim
relief claimed by Seal and Tyte, all these entities were permitted to
render the particular services, upon
the request of the Province.
Royal performed certain services for the Province, particularly at
the Mossel Bay site referred to
in the course of the application for
interim relief; and no issue has arisen with respect to the services
provided by it.”
[148]
As a consequence of having conducted the Royal ORA
both locally and
in KZN, the Province was satisfied that Royal attained the highest
score and that its bid should be accepted.
[149]
Having considered the Province’s reply on this
aspect of the
case (which is the version which must be tested in the
circumstances), I do not agree with Seal’s somewhat
brash
argument that it was reasonable to conclude “
that the
Province followed Royal across the country like a puppy until it
could say, and tick a box, that Royal has what the tender invitation
had in mind
.” On the contrary, I consider that the Province
conducted the enquiry properly and I am satisfied that neither Seal
nor Tyte
was treated unfairly in the ORA process.
[150]
In addition, Seal and Tyte have not explained how the
“second
bite” argument resulted in any material irregularity as
contemplated in
AllPay
. In the passages in the bid document
cited above, the Province did not limit its ORA’s to a single
interview on a particular
date or at a specified place. Rather it
intended to do so “
by means of personal interviews, site
visits and reference checks…”
thus affording itself
the requisite degree of flexibility that a tender process such as
this demanded.
[151]
At the end of it all, the approach adopted by the Province
was in
accordance with the touchstone of public procurement – the
promotion of competition and cost-effective tendering.
Importantly,
the exercise resulted in a significant saving for the public purse –
around R83m when compared to Seal’s
price. In my view, then,
there is no merit in the attack advanced under ground 4 on the
reviewability of ORA process.
GROUND
5 – PRICE TOO LOW
[152]
That then leads to the last ground of review. Seal
raises the rather
curious point in its papers that the price put up by Royal was
“
economically unsustainable
” and “
out of
kilter with market related pricing”.
The suggestion is
perplexing because the primary purpose behind competitive bidding is
ultimately to procure a good price: there
is nothing either unlawful
or unconstitutional about one bidder undercutting another.
[153]
Be that as it may, Seal has not demonstrated in its
papers how
Royal’s lower bid was either unlawful or how it constituted a
reviewable error. And, at the end of the day the
point was not
pursued in either Seal’s heads or oral argument, discretion
thus prevailing over valour.
CONCLUSION
[154]
I agree with the first judgment that that the applications
are
without merit. The correct order in such circumstances is to dismiss
the applications and it is consequently not necessary
to consider a
just and equitable order under s 172(1)(b) of the Constitution. The
parties were all in agreement that in the event
of the reviews
failing, they should be afforded a meaningful period of time to
facilitate the handover of the service throughout
the Province to
Royal. The period of 1 month contemplated in the order made in the
first judgment is more than adequate to address
the practicalities of
the situation.
COSTS
[155]
Counsel for Seal and Tyte argued that, in the event
of the reviews
succeeding, costs should follow the result. But in their world, what
is good for the goose is not necessarily good
for the gander, and an
argument was advanced along the lines of
Biowatch
[35]
that
the losers should not be out of pocket for exercising their
constitutionally protected rights. The argument loses sight of
the
fact that Seal and Tyte were vindicating contractual rights in the
public law domain which were only of pecuniary interest
to them. And,
it has to be born in mind too that for the better part of the
contemplated duration of the first tender, they have
reaped the
financial benefits of a contract which was never lawfully awarded to
them.
[156]
Counsel for the Province submitted, correctly in my
view, that Seal’s
allegations relating to the Zondo Commission necessitated the
Province entering the fray to clear its name,
whereas often the
Province would abide in a matter such as this. For this reason,
counsel asked that Seal be ordered to bear the
costs of the
Province’s opposition. I consider that this is fair in the
circumstances, due regard being had to the baselessness
of the
allegations. A costs order will serve to confirm the Court’s
deprecation of Seal’s conduct on this score.
[157]
Lastly, there are the costs of the urgent application
which were
reserved by Francis J. The parties were in agreement that these costs
should follow the result in the review and so
it must be ordered that
the costs of that application are to be costs in the cause.
Accordingly
it is directed that there be an order in the terms proposed in the
first judgment
.
GAMBLE,
J
Appearances
For
the Applicant
Adv
HF Jacobs SC et Adv F Lamprecht
Instructed
by
DMV
Inc
For
the 1-9 Respondent
Adv J
Newdigate SC et Adv A Nacerodien
Instructed
by
State
Attorney
For
10
th
Respondent
Adv J
Heunis SC et PS Van Zyl
Instructed
by
Ravindra
Maniklall & Co inc
For
22
nd
Respondent
Adv P
Tredoux
Instructed
by
DGF
Attorneys
[1]
Red
Ant Security Relocation and Eviction Services (Pty) Ltd v The
Department of Human Settlements (Western Cape) and Two Others
(unreported
judgment of Western Cape High Court delivered on 8 August 2022).
[2]
The
incumbent was initially assessed in the Western Cape and thereafter
in Kwa-Zulu Natal at its Head Office.
[3]
In
Kwa-Zulu Natal.
[4]
The
Private Security Regulation Industry (the PSIRA letter of good
standing) and with the Department of Labour in respect of the
Compensation for Occupational Injuries and Diseases Act, 1993 (the
COIDA letter of good standing)
[5]
Section
217 of the Constitution of the Republic of South Africa, 1996.
[6]
Section
216 (1) of the Constitution of the Republic of South Africa, 1996.
[7]
Section
33 (1) and Section 33 (2) of the Constitution of the Republic of
South Africa, 1996.
[8]
The
Promotion of Administrative Justice Act, 3 of 2000
.
[9]
Section
33
and Section 217 of the Constitution of the Republic of South
Africa, 1996.
[10]
Logbro
Properties CC v Beddison NO
2003
(2) SA 460 (SCA).
[11]
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Tourism and Others
[2004] ZACC 15
;
2004
(4) SA 490
CC.
[12]
Section
6
(2) (h) of The
Promotion of Administrative Justice Act, 3 of 2000
.
[13]
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security Agency,
and others
2014
(1) SA 604 (CC).
[14]
Steenkamp
N.O. v Provincial Tender Board, Eastern Cape
2007
(3) SA 121
(CC).
[15]
Section
172 of the Constitution of the Republic of South Africa, 1996.
[16]
Subsequently that
department merged with the Province’s erstwhile Department of
Transport and Public Works to form the Department
of Infrastructure
– the sixth respondent herein.
[17]
Promotion of
Administrative Justice Act, 3 of 2000
[18]
AllPay
Consolidated Investment Holdings (Pty) Ltd and others v Chief
Executive Officer, South African Social Security Agency and
others
2014
(1) SA 604 (CC)
[19]
See 2013 (4) SA 557
(SCA).
[20]
2007
(3) SA 121
(CC)
[21]
2008 (2) SA 481 (SCA)
[22]
Act 5 of 2000
[23]
Act 1 of 1999
[24]
R502 of 2011
[25]
[2006] ZACC 1
;
2006
(3) SA 305
(CC) at
[25]
[26]
Municipal Manager:
Quakeni Local Municipality and another v FV General Trading CC
2010 (1) SA 356
(SCA) at
[13]
[27]
This is a reference to
The Judicial Commission of Inquiry into Allegations of State
Capture, Corruption and Fraud in the Public
Sector including Organs
of State established in 2018 under the chairmanship of then Deputy
Chief Justice Zondo and eponymously
known as “The Zondo
Commission”. The same phrase will be used here.
[28]
Private Security
Industry Regulatory Authority
[29]
Compensation
for Occupational Injuries and Diseases Act, 1993
[30]
“
To note
:
Should any of the below documents expire prior to the award of the
Contract, updated, valid documents will be requested from
bidders
prior to the award of the Contract.”
[31]
60 of 2000
[32]
Apparently a reference
to the Private Security Regulation Act, 56 of 2001
[33]
The table classifies a
score of 0-40% as “Extreme”, 41-60% as “High”,
61-80% as “Moderate”
and 81-100% as “Low”.
[34]
“
Registered
office” is defined in the bid document as “the official
address of a security company”.
[35]
Biowatch
v Registrar of Genetic Resources and others
2009
(6) SA 232
(CC)
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