This case discusses the tender process and the rights of a state-owned enterprise when making a selection from applicants to award the said tender where those considerations used to award the said tender do fall outside those points as initially set out.
The matter was placed before the court for redress regarding the alleged bias and irregularities in the evaluation of the bidders in awarding the tender in dispute.
The Applicants in the matter:
Sought to challenge the finding of Transnet, following the tender that they had previously applied for, being awarded to another bidder.
It is prudent to point out that Transnet acted in accordance with the provisions of the Preferential Procurement Policy Framework Act 5 Of 2000 (“PPPFA”).
This, in that section 2(1)(f) of the act “provides that the contract must be awarded to the tenderer who scores the highest points, unless an objective criterion in addition to those contemplated in paragraphs (d) and (e) justify the award to another tenderer”
In the abovementioned case, WattPower Solutions CC and Another party initiated legal proceedings against Transnet SOC Ltd and another entity. The dispute stemmed from a tender process conducted by Transnet SOC Ltd, a state-owned entity.
This case dealt with the solicitation of services for the fire protection systems at one of the premises run by the First Respondent.
The tender process, employed by the state-owned entity, is referred to as a desktop exercise in that two initial factors are considered.
Firstly, the price / cost for services and the BBBEE credentials. Each bidder is assessed on a score out of 100 which is then broken up into 90 for price and 10 for preference.
Following the first four stages and the relevant evaluations, the Applicants in the matter, contended that they had scored the highest and, as a result should have been awarded the tender.
The First Respondent in the matter awarded the tender to the next ranked bidder, citing that after applying the technical due diligence assessment as being a key consideration when doing so, they contended that certain actions taken by Transnet SOC Ltd, during the tender evaluation and award process, were unjust and prejudicial to their interests.
The primary legal issues before the court revolved around procedural fairness and due diligence in the tender process.
The key legal questions addressed included whether or not
Transnet SOC Ltd had followed prescribed procedures, whether or not
the evaluation criteria were applied consistently and fairly, and whether or not
there was any evidence of bias or favouritism in the awarding of the tender.
If Transnet is found guilty of bias, then it will cause questions to be asked.
One question would be if such an action could be permitted in the face of considerations such as the functionality threshold and the objective criteria where the state-owned entity selects a bidder who scores lower that the selected bidder.
Upon careful examination of the evidence and legal arguments presented by both parties, the court found merit in the Plaintiffs’ claims regarding procedural irregularities and lack of transparency.
The court determined that the tender process conducted by Transnet SOC Ltd failed to meet the standards of procedural fairness and due process required for such procurement activities.
It further noted discrepancies in the evaluation criteria, lack of transparency in the decision-making process, and indications of bias in favour of certain bidders.
In its judgment, the court set aside the award made by Transnet SOC Ltd and ordered a fresh tender process to be conducted. The court emphasised the importance of adhering to prescribed procedures, maintaining transparency, and ensuring fair competition in public procurement activities.
It underscored the duty of public entities to uphold the principles of procedural fairness and due process to safeguard the rights of all participants in tender processes.
After a thorough examination of the evidence presented by both parties, the court evaluated the tender process conducted by Transnet SOC Ltd. It scrutinised the procedures followed, the criteria used for evaluation, and the decision-making process leading to the award of the tender.
The court found instances where procedural fairness and due process were compromised, including discrepancies in the evaluation criteria, lack of transparency in the decision-making, and potential bias in the award process.
The court emphasised the importance of procedural fairness and due process in tender processes, especially when involving public entities like Transnet SOC Ltd. It underscored the need for transparency, objectivity, and impartiality throughout the entire tender process to ensure fair competition and uphold the integrity of public procurement.
The judgment highlighted the obligation of public entities to adhere strictly to prescribed procedures and standards to safeguard the rights of all participants in the tender process.
Considering the findings regarding the deficiencies in the tender process, the court issued an order setting aside the award made by Transnet SOC Ltd. It directed Transnet SOC Ltd to conduct a fresh tender process, ensuring compliance with all relevant laws, regulations, and principles of procedural fairness and due process.
The court also granted relief to the Plaintiffs, providing them with an opportunity to participate in the new tender process on equal footing with other bidders.
This case serves as a precedent emphasising the significance of procedural fairness and due process in tender procedures, particularly concerning public entities. It highlights the judiciary’s role in safeguarding the integrity of procurement processes and ensuring equitable treatment for all participants.
The judgment reaffirms the principle that fairness, transparency, and impartiality are essential elements of a valid and lawful tender process, which must be upheld to maintain public trust and confidence in government procurement activities.
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