Case Law[2025] ZASCA 180South Africa
Tekoa Consulting Engineers (Pty) Ltd v Alfred Nzo District Municipality and Others (1094/2023) [2025] ZASCA 180 (28 November 2025)
Supreme Court of Appeal of South Africa
28 November 2025
Headnotes
Summary: Municipal law – tender – mootness – no practical effect – discrete legal issue of public importance – Review – standing – lateness – vagueness of tender.
Judgment
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## Tekoa Consulting Engineers (Pty) Ltd v Alfred Nzo District Municipality and Others (1094/2023) [2025] ZASCA 180 (28 November 2025)
Tekoa Consulting Engineers (Pty) Ltd v Alfred Nzo District Municipality and Others (1094/2023) [2025] ZASCA 180 (28 November 2025)
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sino date 28 November 2025
THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Reportable
Case no: 1094/2023
In the matter between:
TEKOA CONSULTING ENGINEERS (PTY)
LTD APPELLANT
and
ALFRED NZO DISTRICT
MUNICIPALITY FIRST
RESPONDENT
THE ACTING MUNICIPAL MANAGER:
ALFRED NZO DISTRICT
MUNICIPALITY
SECOND RESPONDENT
ZIINZAME CONSULTING ENGINEERS /
CYCLE
PROJECTS / UBUNTU BAM
JV THIRD
RESPONDENT
EMLANJENI JV
FOURTH
RESPONDENT
OLON CONSULTING ENGINEERS JV
IPM PLANT
HIRE FIFTH
RESPONDENT
BM INFRASTRUCTURE JV
MAGNACORP SIXTH
RESPONDENT
Neutral citation: Tekoa Consulting
Engineers (Pty) Ltd v Alfred Nzo District Municipality and Others
(1094/2023)
[2025] ZASCA 180
(28 November 2025)
Coram:
HUGHES, UNTERHALTER, BAARTMAN and COPPIN JJA and
TOLMAY AJA
Heard: 23 May 2025
Delivered:
28 November 2025
Summary:
Municipal law – tender – mootness – no practical
effect –
discrete legal issue of public importance –
Review – standing – lateness – vagueness of tender.
ORDER
On appeal from: Eastern Cape Division
of the High Court, Makhanda (Makaula ADJP, Norman J, and
Cengani-Mbakaza AJ sitting as the
full court):
1
Condonation is granted, and the appeal is reinstated.
2
The appeal is upheld. The first respondent is to pay the costs,
including
the costs consequent to the employment of two counsel.
3
The order of the full court is set aside and replaced with the
following
order:
‘
The appeal
is dismissed with costs, including the costs of two counsel where so
employed.’
JUDGMENT
Hughes JA (Unterhalter, Baartman and
Coppin JJA and Tolmay AJA concurring):
[1]
This is an appeal from the judgment of the full court of the Eastern
Cape Division
of the High Court, Makhanda (the full court), issued on
20 June 2023. On 5 October 2023, this Court granted the appellant,
Tekoa
Consulting Engineers (Pty) Ltd (Tekoa), special leave to
appeal. In this Court, Tekoa failed to prosecute the appeal within
the
prescribed time and subsequently sought condonation and
reinstatement. These were granted, along with an order directing
Tekoa
to pay the costs.
Background
[2]
The appeal relates to the invitation to tender issued by the first
respondent, Alfred
Nzo District Municipality (the Municipality),
under reference number ANDM/IDMS-WSA/148/04/05/20. The tender was
issued to establish
a panel of service providers, including
consulting engineers and contractors, for the planning, design, and
construction of projects
funded by WSIG. This refers to a panel
responsible for planning, designing, and constructing Waste Services
Infrastructure Grant
projects within the Municipality over a
three-year period. This would be executed using a turnkey approach.
The project’s
duration was from 1 July 2020 to 30 June 2023.
The purpose of the tender was to support the implementation of an
intervention programme
by Water Services Authorities (WSAs) to
address water service backlogs and provide interim relief in hotspot
areas within the WSA’s
jurisdiction.
[3]
The tender in this case pertains to a turnkey project. A turnkey
contract usually
refers to a construction agreement where a
contractor is hired to plan, design, and build a project or
infrastructure, undertaking
any other necessary development to make
it fully functional or ‘ready to use’ by a set deadline
and at an agreed price.
Turnkey contracts usually involve a joint
venture, bringing together different areas of expertise. The tender
document anticipated
this cooperation by defining what constitutes a
joint venture or consortium: ‘Joint venture or Consortium means
an association
of persons for the purpose of combining their
expertise, property, capital, efforts, skill and knowledge in an
activity for the
execution of a contract’.
[4]
The services required from successful bidders included preparing
technical reports,
business plans, and designs; constructing and
supervising projects; and preparing close-out and compliance reports.
Tekoa is a
consulting engineering firm. Tekoa submitted its bid by
the stipulated closing date. However, the Municipality’s Bid
Evaluation
Committee (BEC) disqualified Tekoa’s bid because it
failed to provide proof of registration with the Construction
Industry
Development Board (CIDB) and the required grading, as
specified in the tender documents. The BEC subsequently recommended
the appointment
of the third to sixth respondents, to whom the tender
was ultimately awarded.
[5]
Tekoa brought an application in the Eastern Cape Division of the High
Court (the high
court) to review and set aside both the
disqualification of its bid and the award of the tender to the third
to sixth respondents.
The high court (per Laing J) granted an order
declaring that the tender process conducted by the Municipality was
unlawful. It
further reviewed and set aside the Municipality’s
decision to disqualify Tekoa’s bid and to award the tender to
the
third to sixth respondents. The Municipality was granted leave to
appeal to the full court. On 20 June 2023, the full court upheld
their appeal, set aside the high court’s order, and replaced it
with an order dismissing Tekoa’s review, with costs.
[6]
This Court granted Tekoa special leave to appeal the full court’s
order. In
this Court, the Municipality sought and was granted leave
to file a further affidavit. The primary purpose of the affidavit was
to inform this Court that, due to the passage of time, the situation
regarding the case had changed. Any decision made by this
Court would
now have no practical effect, as there is no live dispute between the
parties. This is because the work related to
this tender was
completed by 30 September 2023.
[7]
The relief sought by Tekoa in its review application is set out in
its amended notice
of motion as follows:
‘
(a)
An order reviewing and setting aside the Municipality’s Bid
Adjudication Committee decision
rejecting Tekoa’s bid and
remitting the tender to the Municipality for a new decision. (b)
Consequential
relief sought as a result of the review, including the
appointment of Tekoa as a service provider and the allocation of work
related
to the tender.’
Notably, none of these is currently
feasible to implement.
[8]
The full court concluded that ‘the court a quo [the high
court], erred in its
finding that the tender was not clear about the
CIDB registration being a requirement’. Consequently, Tekoa’s
bid could
not be regarded as non-responsive, despite not being
registered with the CIDB. Additionally, the full court determined
that Tekoa
did not submit an acceptable tender. To support this
conclusion, the full court cited the following: Tekoa did not attach
its CIDB
certificate to its tender; Tekoa ‘was not able to
demonstrate both in its bid and in the review application that its
tender
was an “acceptable tender”’; it
misunderstood the tender requirements; and it would not be able to
conduct the
construction work in line with the tender. Therefore, the
full court found that the high court erred in reviewing and
overturning
the municipality’s decision.
Submissions
[9]
Tekoa conceded that ‘if the work has been completed, [it]
acknowledge[s] that
a decision by this Court would not have a
practical effect on this particular [t]ender’. However, it
argues that mootness
remains a contentious issue and further contends
that the interests of justice require this Court to consider the
merits of the
appeal under s 16(2) of the Superior Courts Act 10 of
2013 (Superior Courts Act). In advancing this assertion, it relies on
the
dicta of this Court in Kruger v Joint Trustee of the Insolvent
Estate of Paulos Bhekinkosi Zulu. Tekoa asserts that in this
case, a discrete legal issue remains that requires this Court’s
pronouncement, so that certainty is attained.
[10] In
its effort to emphasise that the full court’s decision has a
significant impact far
beyond the confines of this case, Tekoa argued
that this appeal, which concerns procurement issues, also involves
the principle
of legality. It contends that s 217 of the Constitution
is implicated because tenders are subject to the principles of
fairness,
equity, transparency, competitiveness, and
cost-effectiveness.
[11]
Tekoa contended further that the tender does not satisfy the
requirements of the Preferential
Procurement Policy Framework Act 5
of 2000 (PPPFA), as it lacks provisions for assessing pricing. Tekoa
also argued that it breaches
the provisions of ss 4(f), 5(3)(c), and
5(4)(b) of the Construction Industry Development Board Act 38 of 2000
(CIDB Act), and the
Construction Industry Development Regulations,
specifically Regulation 24. Tekoa contended that the full court’s
decision
ignores the CIDB's standards for uniformity in engineering
and construction contracts. Further, the full court has endorsed a
tender
with vague requirements, thereby rendering the tender process
procedurally unfair. This, according to Tekoa, could result in
qualified
participants being disqualified in the future due to a
misinterpretation of the relevant legal framework.
[12]
Before this Court, the Municipality argued that no subsisting
contractual relationship exists
between it and the third to sixth
respondents due to the passage of time. Any declaration of
unlawfulness issued by this Court
will have no practical effect and
will not comply with
s 17(1)(b)
of the
Superior Courts Act.
Accordingly
, any order made by this Court will lack practical effect,
and the appeal should be dismissed.
[13] The
Municipality contends further that there is no distinct legal issue
of public interest that
will affect future matters for this Court to
exercise its discretion under
s 16(2)(a)
of the
Superior Courts Act,
as
it would not be in the interests of justice to do so. The
Municipality relies on Agribee Beef Fund (Pty) Ltd and Another v
Eastern
Cape Development Agency and Another and Western
Cape Provincial Government and Others v D C Security (Pty) Ltd.
It submitted that the latter was a case similar to the present one,
and that this Court rejected an argument akin to Tekoa's, declining
to exercise its discretion. The Municipality argued that the full
court’s findings were solely based on the facts. No separate
legal issue of public importance that could influence future tenders
has been identified, which would justify the exercise of this
Court’s
discretion under
s 16(2)(a)
of the
Superior Courts Act.
Interests
of justice and mootness
[14] I
begin by restating s 217(1) of the Constitution, which is clear and
unambiguous in respect
of contracts for goods or services by a state
organ:
‘
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 that is fair, equitable, transparent,
competitive, and cost-effective.’ This section establishes the
constitutional framework relating to government tenders.
Additionally,
the statutory framework governing municipal
procurement, such as the PPPFA, the Municipal Finance Management Act
56 of 2003, and
the
Public Finance Management Act 1 of 1999
, among
others, outlines the requirements of application to an organ of state
when procuring goods and services. An organ of state
must exercise
its procurement powers within the limits of the law and as required
by
s 217(1).
[15] I
reiterate that the work for this tender was completed by 30 September
2023. Essential to these
proceedings is the concession made by Tekoa
in its heads of argument that, ‘if the work has been completed,
we acknowledge
that a decision by this Court would not have [a]
practical effect on this particular Tender’. With this
concession, Tekoa
nevertheless seeks declaratory orders of
unlawfulness. To which the Municipality submits that this cannot be
granted without an
order in terms of s 172(1)(b) of the Constitution,
which ought ‘to take into account the material realities on the
ground’.
That being said, the factual reality is that
work has been completed with respect to the tender in question.
[16] In
these circumstances, it is essential to remember that the fundamental
principle is that if
there is no live issue remaining between the
parties, the court generally does not entertain the appeal and does
not provide advisory
opinions on abstract legal questions. It is well
established that, in the interest of justice, a court has the
discretion to hear
a matter even if it is moot, especially when a
specific legal issue of public interest necessitates adjudication.
Innes CJ
originated this principle above in Geldenhuys Neethling v
Beuthin: ‘. . .Courts of Law exist for the settlement of
concrete
controversies and actual infringements of rights, not to
pronounce upon abstract questions, or to advise upon differing
contentions,
however important’. This underscores the
principle that judicial authority is generally confined to resolving
real
disputes rather than hypothetical or academic questions.
[17]
Mootness is not a bar to deciding an appeal if it is in the interest
of justice to hear the appeal
notwithstanding its mootness. In such
instances, a court is at liberty to exercise its discretion under
s
16(2)(a)
of the
Superior Courts Act. In
addition to exercising the
court’s discretion in terms of
s 16(2)(a)
in the interest of
justice, the Constitutional Court has indicated that several other
considerations come into play. These include,
but are not limited to:
whether the court's order will have a practical impact on either the
parties or others; the nature and
extent of that impact; the
significance and complexity of the issue; the thoroughness of the
arguments presented by the parties;
and whether, in exercising its
discretion, the court's decision would benefit the public at large
and promote legal certainty.
[18] The
current matter warrants consideration despite its mootness, and I
proceed below to address
some of the factors mentioned above.
Determining this moot appeal is necessary, amongst others, because it
relates to the need
for organs of state, including municipalities, to
comply with the prescripts and obligations imposed by s 217 of the
Constitution
when dealing with public procurement policies and
procedures. Tenders should be clear and unambiguous so as not to
offend public
policy and the principle of legality. Pertinently, this
is not the first nor the last time that municipalities and
prospective
public bidders will encounter tenders of this nature,
especially considering the scarcity of water in our country. To
reiterate
the purpose of the tender and highlight its importance to
the public, the municipalities, and our procurement laws: The tender
process was intended to support the implementation of an intervention
programme by WSAs to address water service backlogs and provide
interim relief in hotspot areas within the WSAs’ jurisdiction.
[19] An
important consideration is that the project was of a turnkey nature,
which meant that the
development involved, for an agreed sum, the
contractor's obligation to deliver a fully operational facility by a
specified date.
The contractor is therefore at risk if the deadline
is not met or if there are any defects in the design or
construction.
The Municipality argued that, as the contract was
‘turnkey’, they could ‘conclude one contract with
an entity,
with the latter providing both professional services and
construction works.’ They maintained that this approach avoids
delays
caused by the procurement process for the consultant and
subsequent contractors, especially since the project relies on a
grant
and needs a quick turnaround.
[20]
Tekoa clarified that the nature of the contract is where ‘one
service provider assumes
total responsibility for all aspects of the
project and delivers the full end product/services required by the
contract’.
It was further noted that consideration would
be given to either a consulting entity or a construction entity. This
did not assist
tenderers, as it meant that, as a consultant, one
could not enter into a joint venture with a contractor, nor could a
contractor
enter into a joint venture with a consultant. This is
evident from the Municipality’s opposing affidavit, which
refers to
the tender document that allows for the separate evaluation
of either a consultant or a contractor as an applicant tenderer, and
is contrary to the prescripts of the CIDB. The Municipality’s
tender document and evidence misconstrued what a turnkey contract
encompassed. As such, the evaluation process for the consultant and
the contractor, viewed as separate entities, compromised the
tender
evaluation process.
[21] The
full court misunderstood the concept of a turnkey contract, as it
concluded that it ‘involve[d]
appointing a contractor through a
public tender for all work related to the completion of a project. .
.that included the planning
of the approved land, the township
establishment process and the design and the installation of internal
reticulation services
up to the construction of houses.’
This incorrect conclusion formed the basis of the full court's
decision, and therefore,
and requires us to exercise our discretion.
[22]
Following up on the above, the source of funding for the
Municipality's turnkey projects was
a grant, specifically the Water
Services Infrastructure Grant (WSIG).The WSA's intervention programme
was designed to provide water
services as prescribed by the Water
Services Act. Because of water scarcity, these grants are a
valuable aid for municipalities
to meet their constitutional
obligation to expand access to reliable, safe drinking water and
sanitation services. (Outcomes
Statement). Therefore, it is
reasonable to conclude that the use and interpretation of these
tenders will continue, and there may
be misinterpretations. This
underscores the need for exercising our discretion.
[23] The
full court concluded that because Tekoa had conceded it did not
possess a CIDB certificate,
it could not assert any rights, as it did
not qualify. Furthermore, as a professional service provider and not
qualified to undertake
construction work, it was not a contractor.
This was another misconception, which is also linked to the
misunderstanding of what
a turnkey contract entails. Consequently, we
are enjoined to exercise our discretion to prevent Tekoa from being
prejudiced.
Discussion
[24] I
commence with the issue of standing. Tekoa was disqualified due to a
vague tender document.
As aptly stated by the Constitutional Court in
Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer
of the South African Social Security Agency and
Others:
‘
Vagueness
and uncertainty are grounds for review under section 6(2)(i) of
PAJA. Certainty in legislation and administrative
action has
been linked to the rule of law. . .In Affordable Medicines, this
Court explained the doctrine in the following terms:
“
[L]aws must
be written in a clear and accessible manner. What is required
is reasonable certainty and not perfect lucidity.
The doctrine
of vagueness does not require absolute certainty of laws. The
law must indicate with reasonable certainty to
those who are bound by
it what is required of them so that they may regulate their conduct
accordingly.”’ (Footnotes
omitted).
[25] In
light of the above, Tekoa clearly had standing, having demonstrated
its connection to the
harm caused by the vague tender document; it
could therefore pursue the review proceedings in the high court.
Thus, the full court
wrongly concluded that Tekoa had no right to
assert its claim.
[26]
Lastly, there is the issue of the alleged lateness of Tekoa’s
review application, because
it was (allegedly) brought beyond the
180-day period referred to in s 7(1) of PAJA. The full court
concluded that the high court
erred in finding that Tekoa initiated
the review proceedings within the required 180 days. Consequently,
the full court held that,
in the absence of Tekoa seeking an
extension in terms of s 9(1)(b) of PAJA of the 180-day review period,
the review was indeed
out of time and should not have been
entertained. Additionally, the full court held that Tekoa had no
agreement with the Municipality
regarding an extension of time to
file and determined that, since Tekoa filed its review application
before receiving the reasons
it had requested, ‘the clock
started ticking [for Tekoa] from 16 October 2020.’
[27]
Before this Court, Tekoa contended that the above conclusion of the
full court was incorrect.
It maintained that there was no evidence
before the full court showing that it became aware of the reasons for
its rejection by
the Municipality before the order of 8 June 2021.
Tekoa contended that in terms of s 7(1), there was no delay in
launching its
review application on 5 May 2021. Notably, the
Municipality did not address the delay in launching the review in
this Court.
[28] It
is apt to restate what s 7(1) of PAJA requires:
‘
7 Procedure
for judicial review
(1) Any proceedings for judicial
review in terms of section 6(1) must be instituted without
unreasonable delay and not later than
180 days after the date-
(a) subject to subsection (2)(c), on
which any proceedings instituted in terms of internal remedies as
contemplated in subsection
(2)(a) have been concluded; or
(b) where no such remedies exist, on
which the person concerned was informed of the administrative action,
became aware of the action
and the reasons for it or might reasonably
have been expected to have become aware of the action and the
reasons…’
[29] It
is established that Tekoa became aware that its bid was unsuccessful
on 16 October 2020, and
on the same day, ‘registered [its]
formal objection’ and requested reasons for the rejection of
its bid and its non-appointment
in terms of
s 62
of the
Local
Government: Municipal Systems Act 32 of 2000
.
Section 62
gives an
unsuccessful bidder the right to appeal against the rejection of its
bid and its non-appointment. In this notice of 16
October 2020, Tekoa
sought the Municipality's acceptance of its notification under
s 62.
[30] To
provide a brief overview of the timeline before the review was
initiated. By 8 March 2021,
Tekoa had not received a response from
the Municipality and officially requested a reply to its October 2020
enquiry. Despite these
two requests, no response was received from
the Municipality. On 29 March 2021, Tekoa, through its attorney, sent
further correspondence
to the Municipality. In this letter, Tekoa
indicated that it intended to explore additional options, such as a
review, and required
certain ‘information pertaining to the
adjudication and evaluation of the tender’. The information was
requested to
be provided by the close of business on 8 April 2021,
and Tekoa noted that if there was no compliance it would embark on
court
action. On 14 April 2021, the Municipality responded to Tekoa’s
attorneys, stating that their request ‘is vague[st]
and does
not comply with [the] Promotion of Access to Information Act’.
[31] On
5 May 2021, Tekoa launched an application in the high court,
compelling the Municipality to
provide it with reasons. Part B
covered the review application and the declarations sought by Tekoa.
This culminated in Tekoa obtaining,
by agreement, a court order on 8
June 2021 regarding specific orders in Part A.
[32] The
full court records in its judgment that the review application was
‘delivered on 25
August 2021 with an amended notice of motion’.
In my view, the review Part B of the application could only be sought
or pursued
after Tekoa had obtained the reasons from the
Municipality. Bearing in mind that the notice of motion, which
included Part A, ie
the declarations, as discussed above was issued
and filed on 5 May 2021, and that the order, by agreement, was
granted on 8 June
2021. In fact, the full court recorded that the
record sought from the Municipality was supplied on 17 June 2021.
Furthermore,
as stated above, Part B, amended, together with a
condonation application which the high court incidentally granted was
filed in
court on 25 August 2021. In my view, the earliest the clock
could have started ticking was on 17 June 2021. The full court
clearly
erred in its determination of that issue. On my finding there
was no unreasonable delay in launching the review application.
[33]
Tekoa’s bid was deemed non-responsive by the Municipality
because it lacked a certificate
of registration from the CIDB. This
decision became the central issue in the dispute and the main reason
for the respondents’
disqualification of Tekoa. Its legality is
crucial to the broader questions in this case, particularly regarding
whether the tender
process adhered to the principles of fairness,
transparency, and legality as mandated by relevant procurement laws.
Moreover, it
is uncertain whether Tekoa could seek a review of the
tender process due to its failure to comply with the CIDB
registration requirement,
which it did not possess. Linked to the
issue of standing is whether there was compliance with s 7(1) of PAJA
in initiating the
review proceedings within a reasonable timeframe,
and no later than 180 days as required. Therefore, it was necessary
to determine
this moot appeal, as it relates to the obligation of
organs of state, including municipalities, to comply with the
obligations
imposed by s 217 of the Constitution when dealing with
public procurement policies and procedures, ensuring tenders are
unambiguous
to avoid offending public policy and the principle of
legality, which I discuss below.
[34] I
believe a single decisive issue concerning these tender documents
triggers this Court’s
discretion to entertain and rule on this
appeal, as it involves a distinct legal matter of public importance
that could influence
future tenders. In such instances, this Court
has generally exercised its discretion in favour of considering the
issues on appeal,
even though their consideration may have no
practical effect.
[35] As
alluded to earlier, the tender contract required a turnkey approach.
The key issue was whether
the turnkey contract was unambiguous in its
structure. Tekoa argues that the tender documents in this case were
unclear and did
not comply with the CIDB requirement that procurement
documents for engineering and construction contracts should generally
be
presented clearly and unambiguously. It also argued that the
appeal involves not only principles of legality but also ‘issues
that are fundamental to the procurement of goods and services by
organs of state’.
[36] The
full court dismissed Tekoa’s argument that the tender was
unclear regarding the CIDB
and resolved that it should have been
aware of the requirement. It bears mention at this stage the relevant
requirements and scope
of work as set out in the tender document:
‘
Scope of
Work
1.1 Water Services Infrastructure
Grant is an interim to intermediate water supply intervention
programme that is implemented by
Water Services Authorities (WSAs) to
address water services backlogs as well as to provide interim relief
to hot spot areas within
the WSA’s area of jurisdiction. The
scope of works includes:
Preparation of Technical Reports and
Business Plan;
Source verification (including
drilling and testing of boreholes);
Preparation of designs;
Construction of projects;
Construction supervision of projects;
Preparation of close out reports;
Preparation of compliance reports in
line with funder requirements.’
[37] The
full court, having considered the above as part of the record before
it, concluded that although
the contract was on a turnkey basis,
Tekoa, a consultancy firm of engineers, would not have been able to
demonstrate all the required
competencies for such a contract,
because it was not involved in construction and as such was not
registered with the CIDB in terms
of s 18 of the CIDB Act.
Section 18 of the CIDB Act requires a contractor to be registered
with the CIDB to undertake or
complete construction work for public
sector contracts awarded through competitive tender or quotation.
Failure to comply can result
in sanctions such as fines or removal
from the register. This is particularly relevant given that the scope
of work entailed construction.
[38] As
we are aware, Tekoa’s bid was disqualified because it failed to
submit proof of registration
with the CIDB. Notably, the requirement
for the compulsory submission of a CIDB registration certificate is
not reflected in the
tender document. The items on the checklist are
the following:
‘
1. Authority
to sign a bid;
2.Tax Clearance Certificate;
3.Declaration of Interest;
4.Preference Points Claim Form;
5.Declaration of Past Supply Chain
Practice;
6.Certificate of Independent Bid
Determination;
7.Certificate of Payment of Municipal
Accounts;
8.Experience of Tenderer;
9.Scope of Works/Terms of Reference;
10.Functionality Test;
11.Assessment Forms;
12.Form of offer;
13.Central Supplier Database.’
[39] The
items do not include proof of registration with the CIDB. However,
elsewhere in the tender
document it is stated that the company’s
profile should include proof of registration with professional
bodies, ‘if
applicable’. One example of such a body was
the CIDB. The relevant portion reads as follows:
‘
COMPANY
PROFILE
Bidders are required to submit a
company profile that records evidence of previous work to
substantiate their ability to undertake
specific tasks.
The company profile must include the
following:
. . .
Proof of registration with
professional bodies (e.g. CIDB, LGSETA) – if applicable.’
Furthermore, although the checklist
included with the tender invitation, under the section 'documents to
be submitted', clearly
specifies the mandatory documents that ought
to be submitted, and that a failure to submit them would disqualify a
bidder's tender,
it does not include the CIDB certificate.
[40] The
Municipality argues that it is a matter of interpretation and that
Tekoa has misunderstood
the tender document. According to the
Municipality, the tender requirements clearly stated that
registration with the CIDB was
mandatory. Furthermore, the
municipality argues that Tekoa was aware that the services required
the involvement of consulting engineers
and constructors, for the
construction of works, which could only be performed by those holding
a CIDB certificate issued under
the CIDB Act.
[41] The
Municipality maintained that it is not the role of the courts to
determine what constitutes
a valid tender, but rather the
Municipality's decision. Tekoa conceded this, but emphasised that the
requirements ought to be clearly
set out and unambiguous. I agree
with Tekoa: failing to do so in a public tender process would not
eliminate uncertainty and could
result in an unfair assessment.
[42] The
tender document outlined explicitly what was required. It states as
follows: ‘Proposals
are hereby invited from suitably qualified
and experienced professional service providers to be included in the
panel of consortium
services providers (Professional and Consulting
entity and contractors) for the planning, design and construction of
WSIG funded
projects in the Alfred Nzo Municipality for a period of
three (3) years.’ It is only in the minute of the BEC, where
the
required grading is stated. The minute states: ‘Proposals
for the panel of service providers (Professional and Consulting
Entity and Contractors) for the planning, design, and construction of
WISG (using a turnkey strategy) … CIDB Grading: a
minimum of
5CEPE or 6CE or higher’.
[43]
However, given what has been said above about a turnkey contract, I
view the tender as neither
clear nor unambiguous. In reaching this
conclusion, that the tender was vague, I take cognisance of the fact
that the BEC had to
insert the following to award the tender: ‘[t]he
committee decided to disqualify Bidders that have not entered into
joint
venture agreement as it impose[s] high risk to the employer and
does not reflect trace of agreement between the consultant and the
contractor, even though this was not specified in the TORs’.
(Emphasis added.)
[44]
Further, the tender made no provision for a specific design licence
as would be required for
water projects. Consequently, and
arbitrarily, the BEC ‘decided to allocate maximum points for
any design licence proof attached
that relates to civil works
(PROKON, ALLCAD, CIVIL DESIGN, AUTO DESK, AUTO PADDS, EPANET and
AUTOCAD)’. Even though this
was not requested or specified in
the tender document, Bidders who did not attach a tax invoice listing
a design package for any
of those mentioned by the BEC were to be
penalised.
[45] In
my view, it was not unreasonable for Tekoa, as it did in this
instance, to conclude that,
given how the Tender document was
structured, the absence of a mandatory requirement for CIDB, and the
placement of ‘NB.!!
All Bidders must be registered with CIDB
with a minimum of 5CEPE or 6CE OR higher’ under the
construction section implying
that it does not apply to consulting
engineers like Tekoa, but to construction companies left questions
unanswered. From the Tender
document, one is led to ask: is the CIDB
required ‘if applicable’, or must it be submitted by all
bidders in the construction
industry, or, as the Municipality wishes
this Court to conclude, should it have been inferred from the tender
document?
[46]
What I also find notable, as discussed in detail above, is the BEC
meeting on 5 August 2020.
The concerns were clearly evident from the
minutes of that meeting. It is important to note that this BEC
outlined the CIDB grading
requirements. Furthermore, they emphasised
that bidders were either contractors or consultants, not both, and
aimed to disqualify
those not part of a joint venture. However, this
was not a requirement of the tender. Additionally, the need to hold a
specific
design licence was mentioned, but the BEC omitted that
requirement from the tender document.
[47] In
summary, the disqualification of Tekoa for failing to submit a CIDB
certificate, as outlined
above in relation to a vague tender
document, warranted this Court's consideration, as the method of
disqualification will impact
other parties in future tenders of this
kind. An additional consideration is that the full court has upheld
the Municipalities'
conduct in the disqualification decision.
Remedy
[48]
What remains for consideration is the question of appropriate relief
or remedy.
It is well established that the order
of the full court is the subject of appeal, and therefore, if the
appeal is successful, the
order made by Laing J would remain in
place. However, since the Municipality had already entered into
contracts with the successful
tenderers and the work had already been
completed, enforcing parts of the order could lead to ‘catastrophic
consequences’
for innocent tenderers who were successful and
for the public. In my opinion, after considering the competing
interests, it is
evident that the entire order of the high court
cannot be upheld and should be modified to prevent these
consequences.
[49]
Significantly, in this case, the high court did not refuse to grant
the sought declaratory orders,
given that it is the court of first
instance. Furthermore, Tekoa, the party seeking the declaratory
relief, has an interest in
the grant of the declarations sought, as
implementing an intervention programme by WSAs to address water
backlog issues and provide
interim relief in hotspot areas within the
WSAs’ jurisdiction is a project that would clearly take place
in the future within
that municipal area. Hence, the presence of a
discrete legal issue that required adjudication by this Court despite
mootness.
[50] In
respect of costs, Tekoa has been substantially successful in the full
court and this Court.
Therefore, costs are to follow the result.
[51]
Consequently, I make the following order:
1
Condonation is granted, and the appeal is reinstated.
2
The appeal is upheld. The first respondent is to pay the costs,
including
the costs consequent to the employment of two counsel.
3
The order of the full court is set aside and replaced with the
following
order:
‘
The appeal
is dismissed with costs, including the costs of two counsel where so
employed.’
___________________
W HUGHES
JUDGE OF APPEAL
Appearances
For the Appellant:
S Khumalo SC with N Stein and X Nyangiwe
Instructed by: Moletsane PN
Attorneys Inc, East London
Webbers Attorneys, Bloemfontein
For the first and second
Respondents: S Maliwa with L
Mhambi
Instructed by: V Funani
Attorneys, Mthatha
Maduba Attorneys, Bloemfontein.
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