By Zimri Attorneys
2021-06-24
Zimri Attorneys acted on behalf of a successful applicant in the case of Rail Refurb CC v South
African Road Agency SOC Limited & 2 Others (24377/2020). The
application involved the unlawful award of two road maintenance contracts in
circumstances where our client’s bids were collectively more than R20 million
lower than the bids accepted by SANRAL. The review application was heard by
Judge Tolmay of the Gauteng Division of the High Court, Pretoria on 10 February
2021 and the judgment was handed down on 18 June 2021 in favour of our client. The link to the judgement appears below:
The application brought by our client on 5 June
2020 sought an order reviewing and setting aside the award of two tender
contracts by SANRAL on the basis that they were unlawfully awarded to the
successful bidders. This application was opposed by SANRAL and one of the
successful bidders.
The court found that there were three main
issues in the matter. The first issue was whether our client was denied a
hearing on the rebalancing of its pricing rates and whether the contract award
was procedurally unfair for this reason. The second was whether SANRAL’s
refusal to re-evaluate our client’s bids was irrational. The third was whether,
in event that the awards be set aside, the Court should award the tenders to our
client or whether the decisions should be referred back to SANRAL for
consideration.
Our client made submissions in the tender
process for two road maintenance contracts. Our client’s bids made it to the
pricing and preference stage of the bid evaluation but were rejected by SANRAL
at that stage. SANRAL’s reason for doing so was that our client’s rates were
“unresponsive”. It was common cause that during the course of the evaluation of
the tenders, our client was promised a meeting by SANRAL’s Procurement Manager
to discuss our client’s rates but they unilaterally abandoned the meeting
without informing our client. While waiting for the meeting to take place, SANRAL
instead awarded the contracts to other bidders.
It is trite that SANRAL’s decisions had to be
objectively rational, reasonable and fair. SANRAL was required to comply with
the mandatory tender requirement that it had to obtain clarity on ambiguity in
a tender bid. SANRAL failed to do this. SANRAL’s failure to comply with conditions applicable to the tender process meant that their decisions were procedurally unfair.
In addition, SANRAL
applied an inconsistent approach in its different regions and towards different
tenderers. SANRAL failed to have regard to the entire package of our client’s
rates and instead had regard to individual rates. This was despite SANRAL
conceding that it needs to have regard to a package of rates. The court found
that SANRAL’s approach in respect of our client’s rates was procedurally
irrational and unfair and is therefore reviewable in terms of the Promotion of
Administrative Justice Act (PAJA).
Further, SANRAL relied
on a predetermined benchmark in its evaluation process which was not disclosed
to our client. The court stated that: “it is trite that a tender is required to
speak for itself”. Regulation 11(2) of the Preferential Procurement Regulations
2017 states that “if an organ of state intends to apply objective criteria
in terms of section 2(1)(f) of the Act, the organ of state must stipulate the
objective criteria in the tender documents”. Having regard to this section
and National Treasury Circular of 10 May 2005, the Court found that SANRAL’s
decisions were reviewable in terms of section 6 (2)(e)(i) of PAJA and the
principle of legality.
Thus, a legally sound
process was clearly not followed, resulting in decisions that were irregular
and invalid. SANRAL’s decisions were therefore declared invalid and accordingly
set aside.
As regards substitution, the court found that
the Court was not in as a good as a position as SANRAL to make an appropriate
decision. The decisions were therefore remitted back to SANRAL for
reconsideration.