In a recent case, the courts clarified the conditions for claiming irregularities in a tender process that would constitute grounds for review of an award under the Promotion of Administrative Justice Act (PAJA)
On 26 May 2023, Judge Noko ruled in the matter between Sky Metro Equipment (Pty) Ltd (the applicant), The Wholesale and Retail Sector Education and Training Authority (the first respondent) and Altron TMT (Pty) Ltd t/a Altron Document Solutions (the second respondent).
Facts of the case and relief sought
In this matter, the first respondent invited tenders for the supply, installation, support and leasing of multi-functional printers for five years. Both the applicant and the second respondent were among those that submitted tenders. The tender was awarded to the second respondent.
There were two parts to the application: for an order directing the first respondent to provide the bid documents of the second respondent; and for an order to review and set aside the award granted in favour of the second respondent. The applicant argued for setting aside the award on the grounds that the second respondent's bid did not comply with the tender specifications and the integrity of the bid evaluation was vitiated by irregularities and was not in compliance with the Preferential Procurement Policy Framework Act 5 of 2000 (PPPFA).
The first respondent complied with the first part of the application by replying to the Rule 53 application and delivering records related to the tender which included the second respondent's bid documents. This article will discuss only the second part of the application.
Issues in dispute and findings of law
There were five issues in dispute, which are set out below.
Second respondent's entitlement to address the court
The first issue in dispute related to whether the second respondent was entitled to address the court, despite having failed to file an answering affidavit. The court referred to Rule 6(5)(d)(ii) of the Uniform Rules of Court, which requires the respondent opposing the application to deliver the answering affidavit within 15 days of service of notice of intention to oppose. The court noted that, if the second respondent intended to raise questions of law only, it was required to serve an answering affidavit, but had not done so. The court said it had the discretion to allow arguments, provided the other parties were not prejudiced. As the second respondent's counsel did not request a postponement to file answering papers, the court concluded that the second respondent was not entitled to address the court. The heads of argument and summary were therefore struck out, with costs.
Legal costs awarded to the applicant for the application brought in terms of PAIA
The second issue in dispute was whether the applicant was entitled to legal costs for having been compelled to bring an application in terms of the Promotion of Access to Information Act 2 of 2000 (PAIA) for information which could have been provided by the first respondent prior to the launching of the review application. The applicant also applied for condonation for any non-compliance with the requirements of PAIA. The court decided against granting legal costs and condonation of the non-compliance with the provisions of PAIA, for the reasons set out below.
The court referred to section 217 of the Constitution. It said the response by the first respondent stating that the applicant was able to launch the legal proceedings was unhelpful and unreasonable and went against the rights enshrined in the Constitution on, inter alia, fair and transparent procurement of goods and services in the public sector. Secondly, when dealing with the first respondent's response, the court found that the reasons provided by the applicant were insufficient. On a proper reading of section 11(3) of PAIA, the reasons for the request appeared to be irrelevant.
The court said that if a request for information was made in terms of PAIA and refused, the public body must direct the requester to a body with whom an appeal should be lodged, if it wishes to do so, to avoid frustrating bidders and minimize the burden on the court.
The court referred to the judgment of Paul v MEC for Health, Eastern Cape Provincial Government and Others; Mbobo v MEC for Health, Eastern Cape Provincial Government and Others; Ncumani v MEC for Health, Eastern Cape Province and Others in which the full bench stated that, firstly compliance with the procedural requirements of PAIA was mandatory. Secondly, PAIA prescribes its own specific form of notice of motion for section 78 court applications, in terms of Rule 2 and 3. This should, inter alia, stipulate whether there was compliance with section 74, which requires internal remedies to have been exhausted. Thirdly, there was a tendency to confuse PAIA applications with Promotion of Administrative Justice Act (PAJA) applications. Finally, it had to be clear from the application whether the information was availed in terms of section 25 or whether refusal to provide such information arose in terms of section 27 of PAIA.
The court said that to promote access to justice, flexibility in complying with procedural formalities may be granted as long as the provisions of PAIA were substantially met. However, non-compliance with PAIA and the rules was fatal to the application. As the applicant failed to comply with the provisions of PAIA and exhaust internal remedies, the prayer for legal costs was dismissed.
Whether the decision by the first respondent to dismiss the applicant's request for information was reviewable and could be set aside
The court said this issue was closely linked to the discussion on PAIA. The applicant had requested the information in terms of PAIA, but failed to exhaust internal remedies, which disqualified it from obtaining relief. This issue was dismissed.
Irregularities upon which application for the review and setting aside of the award is predicated
The fourth issue in dispute was twofold: whether the tender required bidders to price for 21 of 52 printers only and whether the bid solution required 100% page coverage. If these requirements had to be priced, the second respondent failed to do so. The court relied on the Constitutional Court case of Allpay and held that a party must be able to prove factually that there was an irregularity. Then a determination would have to be made whether that irregularity implicated any of the grounds of review under PAJA.
The first leg of the irregularity argument was dismissed because the applicant admitted that the request for tender by the first respondent stated that 21 printers required a centralised printing solution and 31 printers were standalone. In addition, the applicant failed to tender evidence to prove that the solution for 21 printers was inconsistent with the tender specifications. The court held there was no cogent basis for the applicant to have priced for a centralised printing solution for all 52 printers.
The court also dismissed the second leg of the irregularity argument. It said that since the applicant failed to satisfy the requirements of the first leg set out in the Allpay case, it did not consider the second leg of the Allpay case.
There were other reasons for dismissing the application.
Firstly, the applicant failed to satisfy the requirements of the second leg of the enquiry, which requires that an inquiry be made to determine which legal ground set out in section 6 of PAJA was relied upon. The applicant was required to engage with the legal evaluation of the irregularity by stating a specific ground upon which it relied, rather than merely listing the seven grounds (as set out in the PAJA) in its supplementary affidavit, without clearly linking the listed grounds with any alleged irregularity.
Secondly, the court found that the applicant failed to provide evidence demonstrating the materiality of the alleged irregularity as set out in Allpay. The applicant should have given evidence to demonstrate that if it had tendered for the centralised print solution for 21 printers and for 5%-page coverage, its bid would have been the lowest.
Thirdly, the court held that the applicant failed to present evidence to show that it should have been awarded the tender, or that the bid should be remitted to the first respondent's committees for reconsideration. Fourthly, the applicant failed to present cogent arguments and/or evidence that the first respondent was biased against the applicant or favoured the second respondent.
Finally, the court held that the contention that the specifications were not clear and were unfair to all bidders was not supported by evidence. No other bidders had claimed that there was a lack of clarity in the specifications which negatively affected them.
In conclusion, the court held that the relief sought by the applicant in both Part A and Part B was unsustainable and was therefore dismissed. This judgment concisely applied the test set out in the Allpay case to determine how irregularities are determined and when these irregularities must be evaluated to determine whether they amount to a ground of review contemplated under PAJA.