- The R178.7 million Taylor Bequest Hospital tender award has been declared unlawful.
- The court found the department wrongly withheld a decisive local-content preference point and unlawfully accepted late tax compliance from the successful bidder.
- The department must decide whether the project will proceed, and if it does, the contract must be awarded to the applicant.
The R178.7 million tender awarded for staff accommodation at Taylor Bequest Hospital in Mount Fletcher has been declared unlawful after the Eastern Cape High Court found multiple procurement irregularities in the evaluation process.
Sinclair Gersahn Troskie Construction CC challenged the Department of Public Works and Infrastructure’s decision to award the 2023 contract to a joint venture comprising SNZN Construction CC and Imbumba Developments CC.
One point changed the result
The applicant submitted the lowest responsive bid at R176.17 million, while the successful joint venture bid R178.66 million.
Although the applicant received the maximum 90 points for price, it was denied a single preference point for local content because one self-scoring box on its SBD 6.1 form was left blank.
Acting Judge M Tsele found that the omission was merely formal because the bidder had completed the required local-content declarations and supporting schedules elsewhere in its submission. The judgment notes that the Bid Adjudication Committee itself recorded that it understood the applicant to be substantively compliant, yet still refused to award the point because the self-score box had not been completed.
The court held that awarding the point would have made the applicant the highest-scoring tenderer.
Tax compliance also tainted the award
The judgment found a second independent flaw in the procurement process after one member of the successful joint venture failed to regularise its tax status within the seven days prescribed by the tender.
While SNZN Construction became tax compliant within the deadline, Imbumba Developments only did so after requesting an extension. Tsele held that the department had no authority to grant that indulgence, writing that allowing one tenderer to set its own deadline effectively rewrote the tender conditions in its favour and gave it an advantage unavailable to other bidders.
The court concluded that the unequal treatment of bidders breached the constitutional requirement that public procurement be fair, equitable, transparent and competitive.
What happens next
The court reviewed and set aside the 18 September 2023 tender award and declared any contract concluded pursuant to it invalid.
Rather than compelling construction to proceed, the court remitted the decision on whether the project should continue to the Department of Public Works and Infrastructure. If the department decides to proceed with the project, it must award the contract to Sinclair Gersahn Troskie Construction CC.
The department was also ordered to pay the applicant’s legal costs, including the costs of two counsel.
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