Thebe Ya Bophelo Healthcare Administrators (Pty) Ltd and Others v National Bargaining Council for the Road Freight Industry and Another

• Jurisdiction: South Africa
• Judge: Willis J
• Judgment Date: 25 February 2009
• Citation: 2009 (3) SA 187 (W)
• Docket Number: 39919/2008
• Hearing Date: 18 February 2009
• Counsel: BE Leech for the applicants. PM Kennedy SC (with H Barnes) for the first respondent. No appearance for the second respondent.
• Court: Witwatersrand Local Division

Willis J:

B [1] This case is concerned with a public tenderer's lament. The applicants wish to set aside the award by the first respondent to the second respondent of the contract to manage the first respondent's 'HIV-Aids Wellness Programme'. The applicants believe the contract should have been awarded to them. This HIV-Aids Wellness Programme provides C Aids education, HIV-Aids testing and, more recently, antiretroviral treatment to employees in the road freight industry. The contract commenced operation on 1 December 2008.

[2] This court has to determine the application for relief in part B of the notice of motion, in which the applicants seek an order, the relevant D portions of which read as follows:

1.

Reviewing and setting aside the decision of the first respondent, which was communicated to the applicants during or about June 2008, not to appoint a service provider to provide an HIV-Aids wellness programme to the employees of the road freight industry, pursuant to a tender process initiated by the first respondent E during June alternatively July 2007.

2.

Reviewing and setting aside the decision of the first respondent, taken during or about May 2008, to exclude the applicants from any further tender process for the appointment of a service provider to provide an HIV-Aids wellness programme to the employees of the road freight industry.

3.

F Reviewing and setting aside the decision of the first respondent to appoint the second respondent as a service provider to provide an HIV-Aids wellness programme to the employees of the road freight industry.

4.

Directing the first respondent, together with such other respondents who may oppose the application, to pay the applicant's costs G of suit.

[3] Part A of the notice of motion concerned an application for an interim interdict which was brought as matter of urgency and which was dismissed by my brother Jajbhay J on 9 December 2008. It seems that Jajbhay J dismissed that application because the balance of convenience H did not, in his view, favour the applicants. He reserved the question of costs.

[4] The second respondent has indicated that it will abide the decision of the court.

I [5] I shall take the unusual step of considering certain aspects of the law before dealing with the facts. The reason is that, at the commencement of the hearing, there was some debate as to which statute/s applied to this determination. Although the applicants contend that the decisions of the first respondent referred to in the relief sought by them in part B of the notice of motion (see para [2] above) offended against the provisions of J s 6(2)(c), (e)(iii), (iv) and (vi), (f)(ii) and (h) of the Promotion of

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Administrative Justice Act 3 of 2000), the thrust of their complaint was A that these decisions fell foul of (i) the 'rationality' provisions; and (ii) the requirement of procedural unfairness referred to in s 6(2)(f)(ii) and 6(2)(c) of the Act, respectively. This Act is widely, if somewhat esoterically and inelegantly, referred to by lawyers as PAJA. Counsel for both sides did so throughout the hearing. For the sake of consistency, B I shall do the same. Mr Kennedy accepted, 'for purposes of argument in this court', that administrative law and, in particular PAJA, is applicable to this case. He did so without finally conceding the point. If I understood him correctly, he wished to reserve his rights to argue this rather interesting aspect in another forum, should the matter go further. It seems clear that a bargaining council is not an 'organ of State' as C provided for in s 1 of PAJA. The more interesting question, upon which Mr Kennedy seemed to wish to keep his powder dry, is whether a bargaining council, when it decides to award a tender, is, in terms of s 1 of PAJA, 'exercising a public power or performing a public function in terms of empowering legislation'. Mr Kennedy does not accept, D however, that either s 217 of the Constitution or the Preferential Procurement Policy Framework Act 5 of 2000 (the Procurement Act) is applicable to this case. In this regard, he referred to s 217(1) of the Constitution which provides as follows:

When an organ of State in the national, provincial or local sphere of E government, or any other institution identified 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.

He submitted that, in order to fall within the purview of s 217 of the Constitution, the bargaining council must be either 'an organ of State in F the national, provincial or local sphere of government' or 'any other institution identified in national legislation'. He went on to submit that, even if, within the ambit of this case, the bargaining council is an organ of State, as defined in s 239 of the Constitution, it is plainly not one 'in the national, provincial or local sphere of government'. A bargaining G council cannot, therefore, be brought within the purview of s 217 of the Constitution. Furthermore, it is clear, he submitted, that the phrase 'any other institution identified in national legislation' does not refer to any institution named in any legislation for any purpose. Rather, the phrase refers to those institutions that are specifically identified in legislation as H institutions to which s 217(1) applies. [1] Thus, included within this category are those institutions governed by the Procurement Act and the regulations thereto, as well as those institutions governed by the Public Finance Management Act 1 of 1999 (PFMA). The Procurement Act is binding on organs of State as provided for in the Constitution only if they have been recognised by the Minister of Finance by notice in the I Government Gazette as an institution to which the Procurement Act

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A applies. The first respondent has not been so recognised and, accordingly, is not governed by the PFMA or the Procurement Act which regulates particular aspects of procurement, such as, inter alia, the manner in which tender proposals are to be evaluated. In summary, on these aspects Mr Kennedy submitted that:

(i)

B the first respondent is not bound by s 217 of the Constitution; and

(ii)

the first respondent is not required by law to follow a particular type of procurement process, whether a 'tender' process or otherwise.

However interesting these points may be, counsel for both sides agreed C that this case was to be decided on the basis that PAJA applies subject to the qualification that the Constitution infuses all aspects of law in our country.

[6] The facts upon which the applicants rely are largely undisputed. The first respondent is a bargaining council duly established and registered as D such under the provisions of the Labour Relations Act 66 of 1995, as amended (the LRA). It derives its funding from deductions of moneys from employers and employees in terms of the LRA. Some years ago, the first respondent established a project known as 'Trucking against Aids' to manage the prevalence and impact of HIV-Aids in the road freight industry. The project was the result of a collective agreement concluded E under the auspices of the first respondent in terms of which a 'Wellness Fund' was established. The project encompassed, inter alia, an Aids awareness and education programme and an HIV-Aids testing programme. During 2007 the parties to the first respondent decided to expand the project to include the provision of anti-retroviral treatment. F This expanded project has been known as 'the Wellness Programme'. During 2007 the parties to the first respondent decided to 'appoint an external service provider to attend to the roll-out of the anti-retroviral treatment and the general management of the Wellness Programme'. In July 2007 the first respondent decided on the process by which the G external service provider would be appointed. This was to be the same process as had previously been followed to appoint a service provider for the 'Trucking against Aids' project. As then, the process was to be conducted by the Wellness Committee (known as 'the Committee'), a subcommittee of the Council established to deal with the Wellness Programme ('the Committee'). To this end, the first respondent soon H thereafter called for tenderers to submit proposals for the provisions of an HIV-Aids wellness programme to employees employed in the road freight industry ('the first tender process'). The first tender process was initiated by way of a written request for proposals, which written request for proposals was subsequently revised and issued again. There was an I advertisement calling for tenders. The requests for proposals, or RFPs, indicated that the programme would initially run for a period of less than two years, ending on 28 February 2009. The RFPs were not qualified in the sense that the first respondent did not reserve, either in the RFPs or the advertisement, the right not to award the tender at all and did not reserve the right to award the tender to a tenderer other than the lowest J bidder. The applicants - acting in the form of a joint venture consortium

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and a partnership - submitted tender proposals. There were other A tenderers, although it is apparent from the record that the partnership, comprising the first and second applicants, and the consortium, headed by the third applicant, Right to Care Ltd (RTC), were for quite some time highly favoured, if not the preferred bidders. In June 2008 the first respondent notified the applicants that: B

Tender For Wellness Programme Service Provider

This is to advise that the Council of the NBCRFI has decided not to appoint a service provider in response to its previous tender call in this regard. That tender process has accordingly been officially...