RHI Joint Venture v The Minister of Roads and Public Works, Eastern Cape and Others
| Jurisdiction | South Africa |
| Judge | Ebrahim J |
| Judgment Date | 18 March 2003 |
| Docket Number | 769/02 |
| Court | Ciskei High Court |
| Hearing Date | 20 February 2003 |
| Citation | 2003 JDR 0143 (CkH) |
Ebrahim J:
Introduction
This is an application to review and set aside the decision taken by the fourth respondent on 7 November 2002 to award a tender to the third respondent. The applicant also seeks an order awarding the tender to the applicant. The first, third and fourth respondents oppose the application.
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On 11 December 2002, in consequence of these proceedings having been brought as a matter of urgency, the respondents gave an undertaking, pending the hearing of this matter on 20 February 20031 not to take any further steps towards implementation of the contract arising from the awarding of the tender. This undertaking forms part of the terms of the order issued by consent by the Court on the same date.
The factual history
The tender, which is the focal point of these proceedings, requires the existing 43 kilometres of gravel road, starting at the N2 at Mooiplaas and ending at Kei Mouth, to be upgraded to a bituminous surfaced road. The tender also specifies that two bridges are to be constructed.
The tender documents were made available to tenderers from 26 July 2002 and the closing date for the submission of tenders was 22 August 2002. The Tender Rules, which formed part of the invitation to tender, specified that all tenders were subject to the provisions of the Provincial Tender Board Act 2 of 1994 (EC) ('the PTB Act') and the regulations promulgated thereunder. Further, the Tender Rules were to be read with the 'Specifications for the Implementation of Targeted Procurement, Targeting of Affirmable Business Enterprises and Targeting of Local Resources'.
The basis upon which tenders were to be adjudicated was detailed in the Tender Rules (Annexure 'D'). These rules, which informed tenderers of
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'the 'applicable documentation', the 'contractual goals' and the points system to be utilised in the adjudication process, read as follows:
'26 ADJUDICATION OF TENDERS
Applicable documentation
These Tender Rules are to be read together with the Specifications for the Implementation of Targeted Procurement, TP1 (APP1) : Targeting of Affirmable Business Enterprises and (TP4 [APP41) : Targeting of Local Resources, included in the Annexure to Section 8.
Variations to the specifications TP1 (APP1) AND TP4 (APP4) are set out in Part D of the Project Specifications.
Definitions and Interpretations
Defined terms, which have capital letters, have the meanings given to them in the General Conditions of Contract or the Specification.
Contractual Goals
The minimum Contract Participation Goal, Local Resources Goal and Labour Percentage are set out In PART A: GENERAL of the Project Specifications.
Tenderers may, in support of an Affirmative Procurement Policy, increase their Contract Participation Local Resources Goal above the minimum. Should the tendered CPG however be less than the set minimum, the tender will not be regarded as responsive and will be rejected at the Employer's discretion.
Tenderers will qualify for tender adjudication points if their tendered Contract Participation and Local Resources Goals exceed the minimum set by the Employer. No further tender adjudication points will be awarded if the maximum set by the Employer is exceeded.
Adjudication of Tenders on a Points System
Examination of Tenders and Determination of Responsiveness
Prior to the detailed evaluation of tenders, the Employer will determine whether each tender:
•
meets the requirements of the Tender Rules; has been properly signed;
•
is responsive to the requirements of the contract documents;
•
provides any clarification and/or substantiation that the Employer may require;
•
compiles with the tender submission requirements in all other respects; and
•
meets the minimum contract participation goals as specified in this document – should a tenderer fail to meet these, such a tender will be considered non-responsive and will not be considered for adjudication.
A responsive tender is one which conforms to all the terms, conditions and specifications of the Contract without material deviation or qualification. A material deviation or qualification is one which, in the employers opinion:
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•
could detrimentally affect the scope, quality or performance of the Works:
•
changes the Employer's or the Contractor's risks and responsibilities under the Contract; or
•
would affect the competitive position of other tenderers presenting responsive tenders, if it were to be rectified.
If the tender does not meet the requirements or is not responsive, it will be rejected by the Employer, and may not subsequently be made acceptable to the Employer by correction or withdrawal of the non-conforming deviation or reservation.
Adjudication using a points system
Responsive tenders shall be adjudicated by the Employer using a system which awards points on the basis of:
•
The tendered price (Np)
•
The tendered Contract Participation Goal (Ng).
•
The tendered Local Resources Goal (Nr)
The Employer will normally award the Contract to the tenderer obtaining the highest number of points, but will not bind itself to do so.
Points awarded for Price (Np)
A maximum of 90 points is allocated to Price on the following basis:
|
Np |
= |
90(1-(PPM)) |
|
|
|
Pm |
|
Where Np |
= |
the number of tender adjudication points awarded for price |
|
Pm |
= |
the price of the lowest responsive tender adjusted to a common base, if applicable |
|
P |
= |
the price of the responsive tender under consideration adjusted to a common base, if applicable |
25.4.3.1
Points Awarded for the Tendered Contract Participation GoaI (Ng)
A maximum of 7.0 points may be awarded for the extent to which the tendered Contract Participation Goal exceeds the specified minimum. The basis of award is:
|
Ng |
= |
7.0 (D-D8) |
|
|
|
X-De |
|
Where Ng |
= |
the number of tender adjudication points awarded |
|
D |
= |
the tendered Contract Participation Goal percentage |
|
Ds |
= |
the specified minimum Contract Participation, Goal percentage, stated in the Project Specifications |
|
X |
= |
the maximum Contract Participation Goal percentage, stated in the Project Specification above which no further adjudication points are awarded |
25.4.3.2
Points Awarded for the Contract Local Resources Goal (Nr)
A maximum of 3.0 points may be awarded for the extent to which the tendered Contract Local Resources Goal exceeds the specified minimum. The basis of award is:
|
Nr |
= |
3.0 (DI-DS) |
|
Where Nr |
= |
the number of tender adjudication points awarded |
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|
Dl |
= |
the tendered Contract Local Resource Participation Goal percentage |
|
Ds |
= |
the specified minimum Contract Local Resource Goal percentage, stated in the above Project Specification above which no further adjudication points are awarded |
|
X |
= |
the maximum Contract Participation Goal percentage stated in the Project Specification above which no further adjudication points are awarded |
25.4.3.3
Total Tender Adjudication Points
The total number of tender adjudication points awarded (N), is the sum of:
N = Np + Ng + Nr (not to exceed 100)'
It is common cause that, in addition to the PTB Act, the legislative scheme which governs the tender process and the award of the tender is the Preferential Procurement Policy Framework Act 5 of 2000 ('the PPPF Act') and the Constitution of the Republic of South Africa Act 108 of 1996 ('the Constitution').
Section 217 of the Constitution, from which the PPPF Act originates, states:
217. Procurement
When an organ of state in the national, provincial or local sphere of government, or any other institution in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.
Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from implementing a procurement policy providing for,
categories of preference in the allocation of contracts; and the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination.
National legislation must prescribe a framework within which the policy referred to in subsection (2) must be implemented.'
The applicant and the third respondent were amongst five tenderers who
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tendered for the contract. All the tenders were initially evaluated by the Standing Tender Committee, a sub-committee of the Provincial Tender Board of the Eastern Cape. As a result of these evaluations two of the five tenderers were determined to be 'non-responsive' and rejected as provided for in Tender Rule 25.4.1.
The Standing Tender Committee's Report (Annexure 'O') states that tenders were 'evaluated in accordance with the requirements of the Department of Roads and Public Works Targeted Procurement Policy', utilising the prescribed points system. The points system and the results produced through the application thereof has been summarised as follows:
Evaluation points Awarded to Tenders
Points Awarded for Price (Np)
A maximum of 90 points out of a possible 100 points is allocated to price. In accordance with the given formula the price of the lowest responsive tender would obtain 90 points while the balance of the Tenderers, depending on price, would progressively earn less points.
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