The High Court recently examined how to ensure a fair process and outcome for bidders in a tender. In the review application of Silver Lake Trading 305 (Pty) Ltd t/a Opulentia Financial Services v Bloemwater (now Vaal Central Water) and Sankofa Insurance,¹ the tender resulted in the appointment of Sankofa. Silver Lake questioned the appointment of Sankofa at a contract price lower than its bid submission. Relying on S8(1)(c)(ii)(a) of the Promotion of Administrative Justice Act 3 of 2000, Silver Lake sought an order substituting Bloemwater’s decision, making it the successful bidder.

The court addressed the review ground concerning the lack of authority for Bloemwater to correct any arithmetical errors in the submitted bids. It confirmed that Bloemwater did not reserve the right to correct bid errors, and there were no such errors in the bids. Recalculating Sankofa’s bid without a discrepancy and giving the bidder the opportunity to accept the recalculation constituted an unlawful exercise of power, rendering the bidding process unfair.

Silver Lake failed to establish a proper case for a substitution order. As Bloemwater amended Sankofa’s tender with the recalculation, it obligated Sankofa to accept the tender. Therefore, the just and equitable order required remittal to Bloemwater, not substitution. Bloemwater’s decision declaring Sankofa’s bid acceptable was reviewed and set aside.

The judgement shows it’s critical that bidders take the time to ensure their RFP terms accurately reflect the process the bidder intends to follow and allows the bidder to take certain steps.

For expert legal advice on government contracting and public procurement in South Africa, contact LnP Beyond Legal.

¹  Silver Lake Trading 305 (Pty) Ltd t/a Opulentia Financial Services v Bloemwater (now Vaal Central Water) and Another (4689/2023) [2024] ZAFSHC 79 (20 March 2024).