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Legal Talk

Legal Talk

Author: Fawzia Khan
Date: 2013-05-30
The awarding of government tenders formed the subject matter of a case, which came before the Durban High Court a few weeks ago. In this particular case, Company "A" tendered for certain work to be done for the Umhlathuze Municipality.

The tenders were to be evaluated on a 90/10 point scoring system in terms of the Preferential Procurement Policy Framework Act, 2000. [The Preferential Procurement Policy Framework Act as well as The Preferential Procurement Regulations governs all government tenders processes].

Company "A" was the lowest qualifying bidder and should therefore have been awarded the tender. However the Municipality awarded the tender to Company "B", who was the second highest bidder. Company "A" lodged an objection with the Municipality and later launched an interdict application against the Umhlathuze Municipality to stop Company "B" from working on the construction site until its objection to the tender award was finalized.

It argued that awarding the tender to Company B was unlawful as it was in conflict with the 90/10 points system. The Court heard that Company "B" was told by the Municipality that it would only get the award if it [Company "B"] agreed to do the job for the same price as what Company "A" (which was the lowest qualifying bidder) had originally tendered for.

The Municipality said that Company "A" had already been the recipient of two major tenders in the past totaling approximately R49.5 million rand and it wanted to allow other service providers an opportunity to provide such services.

One of the problems the Court faced was that Company "B" was already on site and had installed some materials on site. The other problem was that there was a strong possibility that the residents of the affected community could react adversely to the removal of the tender from Company "B".

The Court held that these problems were however created by the Municipality's conduct. After hearing all the evidence before it, the Court found that there was sufficient evidence to grant the interdict and allowed Company "A" the right, within certain defined time periods, to institute a review application against the evaluation and adjudication tender process.

The Municipality was interdicted from giving effect to its tender award of the contract to Company "B" and Company "B" was interdicted from commencing or carrying on any work on site.

Know your rights! Email fawzia@thelawdesk.co.za or call 031-5025670 for any legal assistance.