Sgananda Consulting (Pty) Ltd v Mnambithi Fet College

• Jurisdiction: South Africa
• Judge: Lopes J
• Judgment Date: 20 May 2014
• Docket Number: 4329/14
• Court: KwaZulu-Natal High Court, Pietermaritzburg
• Hearing Date: 05 May 2014
• Citation: 2014 JDR 1028 (KZP)

Lopes J

[1]

This is an application to set aside the award of a tender for the provision of accommodation and meals for students attending the Mnambithi FET College ('the college'), the first respondent in this application. The applicant is Sgananda Consulting (Pty) Ltd ('Sgananda'). It was an unsuccessful bidder.

[2]

The college is a college for further education operating as a public institution under the Department of Higher Education and Training. It is funded by public funds received from the National Treasury, and student accommodation is paid for from the National Student Financial Aid Scheme. The college offers various courses at its Estcourt campus. It works on strict budgetary controls and applies the provisions of the Public Finance Management Act, 1999.

2014 JDR 1028 p3

Lopes J

[3]

The history of this application may be summarised as follows :

(a)

once it had established the number of students which it would be required to accommodate during the 2014 academic year, the college published an invitation to tender for the provision of accommodation and for meals for the students, on the 7th January 2014. The tender invitation was compiled by the college's Specification Committee and the advert invited tenders for the accommodation of 300 students and two hostel supervisors. The closing date for tenders was recorded as being 12 noon on the 17th January 2014;

(b)

the entire process was conducted with some urgency and on shortened time limits because the college was only able to determine the number of students who would have to be accommodated once they have received applications to undertake courses for the 2014 academic year;

(c)

the college's Bid Evaluation Committee ('the BEC') opened all the sealed tenders on the 21st January 2014. Five tenders were received, as follows:

(i)

Sgananda's tender to accommodate 180 students at premises located 15 kilometres from the centre of Estcourt at premises referred to as 'Isaac's Well';

(ii)

the seventh respondent Amahle Amahlubi Trading Enterprises ('Amahle') CC who tendered to accommodate 200 students at the hostel facilities situated at the Estcourt High School, a government high school in Estcourt;

(iii)

the ninth respondent Branken Investments CC ('Branken') tendered to provide accommodation at the Sunrise Hotel in Estcourt for 150 students;

2014 JDR 1028 p4

Lopes J

(iv)

Branken had also tendered for the accommodation of students at Isaac's Well;

(v)

the tenth respondent, Val-U-Lodge tendered to accommodate students at its premises in Estcourt;

(d)

after the BEC had opened and examined the tenders, the chairperson arranged for inspections to be carried out by its members of the various premises. These inspections took place on the 23rd January 2014;

(e)

on the 24th January 2014 the chairperson of the BEC telephoned the representative of Sgananda, Mr Sibusiso David Shezi ('Mr Shezi'), in order to obtain clarification of the pricing structure tendered. This was because in the Sgananda tender the tender price had been reflected as follows:

'Cost per learner : R15 500 (including meals)

Rate per room : R2 573 (per month).'

The clarification which was sought by the chairperson of the BEC was whether or not the rate of R15 500 was a reference to the tender price per student per month, or per student per year. According to the chairperson of the BEC and others who were listening to the conversation which was being conducted on a loudspeaker phone, the reply from Mr Shezi was that the tender price was R15 500 per student per month;

(f)

the BEC then made a recommendation to the college's Bid Adjudication Committee ('the BAC') and after a meeting of the BAC on the 4th February 2014, the BAC awarded tenders to Amahle (200 students) and Branken (150 students) on the 6th February 2014;

2014 JDR 1028 p5

Lopes J

(g)

on the 6th February 2014 the unsuccessful tenderers were notified, and in the letter addressed to Sgananda it was recorded that the closing date for appeals was the 13th February 2014;

(h)

appointment letters were sent to the successful tenderers on the 14th February 2012;

(i)

on the 7th February 2014 Sgananda notified the college of its intention to appeal against the award of the tender and requested reasons for the BAC not awarding the tender to Sgananda;

(j)

as no formal tender appeal committee existed, the college then appointed the third respondent, retired Judge P C Combrinck, sitting alone, as the appeal authority. It is common cause between the parties that no objection was raised to the appointment of Judge Combrinck as the appeal authority, and his powers were those of a common law appeal – i.e. he was required to consider the matter afresh on the papers which served before the BAC;

(k)

pursuant to an order of court which was obtained by Sgananda, the appeal authority was directed to dispose of the matter by not later than the 11th March 2014 and to provide reasons by the 12th March 2014;

(l)

on the 9th March 2014 the appeal authority made a decision dismissing the appeal by Sgananda.

[4]

Sgananda then brought this application seeking to set aside the decision of the appeal authority and the BAC. The basis on which the appeal authority's decision is criticised is that the matter was approached incorrectly on the basis that the powers of the appeal authority were limited when that was not in fact the case. It is also alleged that the appeal authority incorrectly interpreted the facts.

2014 JDR 1028 p6

Lopes J

[5]

Mr Gajoo SC who appeared for Sgananda together with Mr Patel also submitted that the BEC should have rejected the tenders of Amahle and Branken. He submitted that the appeal authority misdirected itself by regarding its powers as being limited by s 20 of the Preferential Procurement Policy Framework Act, 2000. The decision of the appeal authority indeed based its findings on an examination of the powers bestowed upon a bid appeals tribunal appointed in terms of that Act, to interfere with the decision of a bid adjudication committee. It is not necessary for me to set out those powers. Suffice it to say that the appeal authority found that the BAC had not been guilty of any of the provisions set out in s 20 of the Act.

[6]

The appeal authority also recorded that Sgananda had inadvertently tendered a rate which equated to R516,67 per day when the correct rate should have been R42,06 or R43,05 per student per day. The appeal authority took the view that a mistake on the part of a person submitting a tender (in giving the wrong information) cannot amount to an irregularity on the part of the receiver of the...