Baatshuma (Pty) Ltd v Tubatse Local Municipality and Others

• Jurisdiction: South Africa
• Judge: MI Mangena AJ
• Judgment Date: 18 March 2022
• Court: Limpopo Division, Polokwane
• Hearing Date: 18 March 2022
• Docket Number: 3007/2021

Mangena AJ:

[1]

Fetakgomo Tubatse Local Municipality ("the municipality") is an organ of State as defined in Section 239 of the Constitution Act 108 of 1996. It is enjoined to comply with Section 217 of the Constitution in the procurement of goods and services and ensure that the process is fair, competitive and transparent.

[2]

On or about 28 August 2020, the municipality issued a tender inviting interested bidders to apply for appointment as service providers to implement revenue enhancement projects for a period of 36 (thirty-six) months. The closing date for the submission of the bid documents was 28 September 2020 at 12h00.

[3]

Bidders' attention was drawn to a "very important notice on disqualification" which stated that "a bid not complying with the peremptory requirements stated hereunder will be regarded as not being an "Acceptable bid" and as such will be rejected!! The requirements listed were as follows:-

•

"Compliant tax status (the Municipality will verify tax compliance during evaluation and adjudication stage).

•

Joint venture agreement, signed by both parties stipulating the percentage of shareholding agreement.

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• The bidders must submit both manual and electronic tender document in the form of CD or USB for consideration.

• Submission of municipal rates and taxes or municipal service invoice issued to the bidder and all directors, by any other Municipality or municipal entity. The rates and taxes charges must not be in arrears for more than 3 (three) months for the company and directors. If you are renting, attach valid signed lease agreement.

• Fully signed and completed MBD forms.

• Certified ID copies of all directors/members/shareholders of the company/business (for all companies in case of a joint venture).

• All pages signed or initialled.

• Authority of signatory, signed by all the parties (a letter showing who is authorised to sign the documents).

• Price amendment without signature will amount to disqualification.

• Provide central supplier database (CSD) number".

[4]

The municipality received bids from several companies and in due course evaluated them for compliance with the administrative requirements and functionality. Baatshuma (Pty) Ltd, was eliminated for non-compliance with peremptory requirements on the basis that not all pages were signed and initialed. The tender was awarded to the second respondent, Revenue Enhancement Agency (Pty) Ltd with Registration Number 2018/633/38/07 on 15 December 2020.

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[5]

Dissatisfied with the outcome of the evaluation and adjudication process, applicant instituted these review proceedings on 03 May 2021 for an order amongst others, declaring the award of the tender by the first respondent (municipality) to the second respondent invalid, declare the contracts concluded between the municipality and the second respondent pursuant to the award of the tender void ab initio; condonation for the late filing of the review and the extension of the 90 days period referred to in Section 5(1) of PAJA in so far as it may be necessary and costs of suits. The municipality was further required to file the record in terms of Rule 53 of the Uniform Rules of Court.

[6]

The municipality has filed the record and is opposing the application, largely on the basis that the Applicant has misrepresented facts and allegedly committed fraud regarding its BEE certificate. It is contended that the Applicant is unsuited to institute these proceedings because "his hands are not clean". On this basis, it was argued that it has no standing to approach this court and have the tender reviewed and set aside.

[7]

The contention by the municipality is untenable. The right of a party to institute court proceedings has got nothing to do with BEE or tax compliant status more especially in public procurement matters. Tax and BEE status are relevant for adjudication purposes and allocation of points and remain subject of dispute until determined by a court of law. Where a party is alleged to have submitted a fraudulent tax clearance or a fraudulent BEE certificate as in this case, such a party retains the constitutionally entrenched right to approach the court for a

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relief arising out of an exercise of a public power. The right to challenge the allegation on misrepresentation is antecedent to the right to approach the Court. It goes without saying that the mere fact that a party is alleged to have committed fraud cannot be a reason to deprive him or her of the legal standing to...