Can a Court award a tender where only two bidders have submitted tenders?
29-11-2021
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Taranis
Source
Recently the South Gauteng High Court, through a judgment in a tender dispute, confirmed that where only two bidders have submitted tenders, and a dispute arises from it, the Court has the power to set aside an award, which was done so, unlawfully.
In the matter between Gijima Holdings versus The State Information Technology Agency (SITA), it transpired that the latter issued a tender with a requirement to “provide preventative and corrective maintenance of the PBX systems and ad-hoc services”, for the SAPS, on a national basis.
The tender further stipulated a mandatory requirement, that the, “The bidder must be an OEM, or duly authorised representative of the OEM or a registered OEM partner to maintain or support the following brands of PBX systems: 1. Siemens; 2. Ericsson/Mitel; and 3. NEC/Philips systems”.
Only two bidders responded i.e., Gijima Holdings, which has been rendering the required services to the SAPS for the last 14 years and a competing supplier, In2IT, which did not comply with the mandatory requirement of the tender but were subsequently awarded the contract, to render the required services.
Gijima Holdings applied to Court to have the tender reviewed and set aside and was successful in its application, since it was the only bidder, that complied with the “mandatory requirement” and the Court had no hesitation to order that the former be appointed as the successful tenderer.
According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, tendering agency, “The Court was correct in “taking over the role of the adjudication committee”, since there were only two bids on the table, and it would have caused a further delay in the relief sought by Gijima Holdings; if it had to order a full review of the process and to have sent it back to the SITA to restart the tender process.”
“Also, the maintenance and ad hoc support services required by the SAPS was mission-critical since most of these PBX systems were reaching the end of their life cycle and a situation could not be allowed, where the public would not even be able to call the 10111 number during an emergency”, says Davids.
“On the other hand, if more than just the two bidders were on the adjudication short-list of a specific tender, and it was awarded unlawfully, one would suspect that the Court would have ordered a review of the process, whereas, in this case, it was only two competing bidders, and the tender could only have been awarded to the one, which was fully compliant to the mandatory requirement”.
“The Court also dealt with a few other key principles pertaining to the tendering ecosystem, covering aspects like, waiving of general and special conditions, and considering direct negotiations with a sole-supplier”.
Davids says, “This is a very interesting judgment, in that it highlights quite a number of considerations, which could have been followed by the SITA to create a 'Cost-effective', tender process as demanded by Section 217 of the Constitution”.
For more information on the structure of the judgement and how bidders could use the pertinent issues raised in it, as grounds to contest unlawfully awarded tenders, kindly visit our website: http://www.taranis.co.za/ for more details.
Contact: Gerrit Davids. Lead Advisor | TaranisCo Advisory CC Mobile. +27 (0) 82 496 1657 E-mail: gerrit@taranisco.co.za
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