Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and Others

• Jurisdiction: South Africa
• Judge: Howie P, Nugent JA, Jafta JA, Maya JA and Mhlantla AJA
• Judgment Date: 29 November 2007
• Citation: 2008 (2) SA 481 (SCA)
• Docket Number: 31/2007
• Hearing Date: 02 November 2007
• Counsel: JG Wasserman SC (with PT Rood) for the appellant. JW Louw SC (with A Ncongwane) for the first and second respondents. P Stais (with L Bedeker) for the third respondent.
• Court: Supreme Court of Appeal

Jafta JA:

[1] This is an appeal against a decision of Prinsloo J (sitting in the Pretoria High Court) in which he dismissed the appellant's application for an order reviewing and setting aside the decision to award a tender to C a consortium called Thermopower Technology Processors/Buhle Waste/ Afrimedicals JV (the consortium). The tender was for the provision of services relating to the removal, treatment and disposal of healthcare waste material from hospitals in the province of Limpopo (formerly called Northern Province). The appeal is with leave of this court. D

[2] This case is about the fairness of the process followed by the Dep artment of Health and Social Development which culminated in the award of the impugned tender, underlying the agreement for procurement of services by the department in question. Such process is governed by legislation which can be traced back to the interim Constitution. [1] It E required, among other things, that provincial legislation establishing independent and impartial tender boards in each province, be passed. [2]

[3] The legislature in Limpopo passed the Northern Transvaal Tender Board Act [3] (the Act) in terms of which the impugned decision was taken. This Act establishes a provincial tender board which is granted the sole power 'to procure supplies and services for the province' (s 4). [4] However, F

Jafta JA

the board is empowered to delegate 'any of its powers to any of its A committees, any person (including any member of the board), any body of persons or the holder of any post designated by the Board' (s 5). The Act also empowers the Member of the Executive Council for Finance and Expenditure (the MEC) to make regulations governing the tender process (s 9). On 14 February 1997 the MEC published such B regulations. Regulation 2 provides that procurement of goods and services shall be done only through the board. [5]

[4] The final Constitution lays down minimum requirements for a valid tender process and contracts entered into following an award of tender to a successful tenderer (s 217). [6] The section requires that the tender C process, preceding the conclusion of contracts for the supply of goods and services, must be 'fair, equitable, transparent, competitive and cost-effective'. Finally, as the decision to award a tender constitutes administrative action, it follows that the provisions of the Promotion of Administrative Justice Act [7] (PAJA) apply to the process. This is D the legislative background against which the present matter must be considered.

[5] The facts in this matter are largely not in dispute. An invitation to tender was issued by the Department of Health and Social Development - the second respondent - following an audit query by the Auditor-General. The query related to the department's failure properly to E dispose of medical waste in compliance with a range of statutes relevant to that process. Having acquired the necessary funds, the department advertised an invitation to interested parties to tender for the removal, treatment and disposal of medical waste. The deadline for lodging tenders was 11:00 on 24 February 2005. This invitation contained F documents setting out, among others, the list of hospitals from which the medical waste would be collected, specifications and conditions applicable to the tender process.

Jafta JA

[6] A Fourteen companies responded to the invitation and timeously delivered their tenders at the appointed address. The appellant was one of them, as was the consortium. According to Mr Mpho Mofokeng - the chairman of the departmental tender committee - the tenders received were subjected to evaluation criteria which were 'divided into two phases, namely administrative compliance and technical compliance'. B Seven tenders were disqualified at the first phase for failing to comply with the administrative requirements. These included the appellant's tender which was disqualified for failing to sign a form titled 'declaration of interest'.

[7] Six of the remaining tenders were disqualified at the second phase for C failing to comply with technical requirements. The consortium's tender was the only one remaining after disqualifications at the second phase. All these disqualifications occurred in an ad hoc technical evaluation committee constituted by two technical advisors who were also members of the tender committee chaired by Mofokeng. At the conclusion of the D second phase the technical committee recommended to the tender committee that the consortium be awarded the tender. After deliberation the tender committee approved the recommendation but also resolved that business premises of the 14 companies that had tendered be inspected, even though 13 of them were no longer in the running owing E to disqualifications.

[8] During the period 8 to 10 March 2005 members of the tender committee conducted inspections at business premises of 11 of the 14 companies that had tendered. The appellant's business facilities were inspected and so were facilities of the consortium. At the appellant's F premises the inspection revealed that the equipment used in treating medical waste did not possess the current technology and consequently it failed to render such waste completely unrecognisable, as required by tender specifications. The washing facility was not automatised and the appellant's employees were exposed to accidents and disease because they were not supplied with the necessary protective clothing. This, in G the view of the committee, violated the Occupational Health and Safety Act 85 of 1993 and the regulations made under it.

[9] Following the inspections, the tender committee held a meeting on 10 March 2005 at 18:10. In the committee's view the consortium was the only tenderer that complied fully with relevant legislation and had H submitted a clear proposal. It was resolved that the technical committee must prepare a report, the contents of which I refer to more fully below. The tender committee's recommendation that the consortium be awarded the tender was communicated by Mofokeng to Dr Hlamalani Manzini - the head of the department - to whom the power to award I tenders was delegated. On the same date she awarded the tender to the consortium on specified conditions. [8]

Jafta JA

[10] The report of the technical evaluation committee reveals (contrary A to the tender committee's view) that the consortium did not comply with technical requirements regarding the treatment of anatomical waste and sharps. Sharps are defined (in the report) as objects such as hypodermic needles, scalpel blades and other surgical accessories capable of cutting or penetrating human skin. The report raises concerns regarding its B proposals and its ability to handle both anatomical waste and sharps, including their treatment. Regarding transportation of waste material, the report shows that it also failed to comply with legal requirements. This necessitated a meeting between the tender committee and the consortium on 23 March 2005 where an explanation for defects in its C tender was furnished. But at that stage the tender had already been awarded.

[11] On 7 April 2005 the appellant addressed a letter to Dr Manzini asking which tenderer was successful. She replied by a letter dated 25 April 2005, informing it that its tender was disqualified for failing to D sign the declaration of interest and that the consortium had won the tender. The declaration referred to was duly completed and initialled on each of the two pages. It is necessary to set it out in full. In its completed form it reads:

Declaration of interest

1. Any legal person, including persons employed by the principal, or E persons having a kinship with persons employed by the principal, including a blood relationship, may make an offer or offers in terms of this invitation to tender. In view of possible allegations of favouritism, should the resulting tender, or part thereof, be awarded to persons employed by the principal, or to persons connected with F or related to them, it is required that the tenderer or his/her authorised representative declare his/her position in relation to the evaluating/adjudicating authority and/or take an oath declaring his/her interest, where -

.

the tenderer is employed by the principal; and/or

.

the legal person on whose behalf the tendering document is G signed, has a relationship with persons/a person who are/is involved in the evaluation and/or adjudication of the tender(s), or where it is known that such a relationship exists between the person or persons for or on whose behalf the declarant acts and persons who are involved with the evaluation and/or adjudication of the tender. H

2. In order to give effect to the above, the following questionnaire must be completed and submitted with the tender.

2.1

Are you or any person connected with the tenderer, employed by the principal? No

2.1.2

If so, state particulars. N/A

2.2

Do you, or any person connected with the tenderer, have any I relationship (family, friend, other) with a person employed by

Jafta JA

A the principal and who may be involved with the evaluation and/ or adjudication of this tender? No

2.2.1

If so, state particulars. N/A

2.3

Are you, or any person connected with the tender, aware of any relationship (family, friend, other) between the tenderer and any person employed by the principal who may be involved with the evaluation and/or adjudication of this tender? No B

2.3.1

If so state particulars. N/A

Declaration:

I, the undersigned (name) R Gouws certify that the information furnished in paras 2.1 to 2.3.1 above is correct. I accept that the principal may act against me in terms of para 23 of the general C conditions of contract should this declaration prove to be false.

................. 23.2.05

Signature Date

Regional...