Court rules that B-BBEE certificates must be valid at the time of tendering

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28-08-2023
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Taranis
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In a recent judgment in the Free State High Court, Bloemfontein, it was ruled that where the conditions of tender stipulate that a bidder must submit a “Valid B-BBEE Certificate” at the closing of tender, it is in no position to submit it afterwards and expects to claim points under the “Specific Goals” of the Preferential Procurement Policy Framework Act (PPPFA).

In this particular matter, the tender clearly stipulated that only “Only SANAS accredited B-BBEE certificates and the sworn B-BBEE Affidavit Exempted Micro Enterprise, which was signed by the Commissioner of Oaths, also is accepted.  Bidders who do not have B-BBEE certificates would not be disqualified but would not qualify for B-BBEE points.”

The complainant submitted a responsive tender albeit the B-BBEE Certificate expired, “Approximately 9 days before closing date. All the other tenderers’ certificates only expired in 2021”, with the result that on the closing date, it no longer had a “Valid B-BBEE Certificate”.

It then requested its verification agency for a letter confirming that a certificate would be issued in due course, which subsequently was submitted on 9 October 2020, a few weeks after the tender closed.

The Applicant argued that it was now entitled to the “Points” allowed for under Section 2 of the PPPFA as well as under the ambit of the PPPFA Regulations, of which at that stage, the bid adjudication had already been completed.

It then turned to the Court for relief, arguing that if the Bid Adjudication Committee had included its full complement of 10 points for having a B-BBEE Level One Contributor Status, it would have scored more points than any other bidder, for that matter.

The Court turned to an earlier case for guidance and used its judgment as the basis for its own ruling and stated that the bidder in this matter, “Had itself  to blame for not having a valid certificate at the date of closing of the tender or during evaluation.”

The Court also remarked that despite the fact that the winning bidder’s price is R12m more than that of the Applicant, the discrepancy is created by the applicable point system since it creates an anomaly, that needs further consideration in public procurement legislation.

According to Gerrit Davids, lead advisor at TaranisCo Advisory, tendering agency, one has to concur with the Court’s ruling on the issue of the government having to pay more for goods and services when costs are not carefully considered, coupled with the demand of Section 217, which clearly stipulates that the system must always place competitiveness and cost-efficiency as the primary values when calling for tenders.

Davids says, “The Court in this matter, while supporting the points system as prescribed by the PPPFA, it was at odds with the outcome, where a bidder with a higher price, who had a responsive bid, will now be awarded a contract, against those who were cheaper but could not be considered because of the enabling legislation.”

Contact: Gerrit Davids. Lead Advisor | TaranisCo Advisory CC  

Mobile. +27 (0) 82 496 1657 E-mail:  gerrit@taranisco.co.za