An October 2014 supreme court of appeal decision has confirmed two well established principles of public procurement and administrative law review:
- There is limited scope for not awarding a tender to a bidder that has scored the highest number of points; and
- A court is not likely to substitute its decision for a decision made by an organ of state and will usually refer the matter back to the administrator for re-consideration.
In IDC v Trencon Construction the court was asked to adjudicate on these issues, after the IDC had awarded a contract for the external upgrade of its head office to a bidder that did not score the highest number of points in the bidding process.
There is limited scope for not awarding a tender to a bidder that has scored the highest number of points.
The IDC had concluded that the bidder which scored the highest number of points had not submitted a bid with a fixed price and that it should be disqualified on this basis. During the appeal proceedings, it was conceded that this was incorrect. The Preferential Procurement Policy Framework Act provides that a contract must be awarded to the tenderer who scores the highest points “unless objective criteria … justify the award to another tenderer”. There were no such objective reasons. This also meant that it was not necessary to consider the finding by the high court that the winning bidder who had submitted a bid 14 minutes after the cut-off time had to be disqualified from the bid.
The court stressed that it would not grant the extraordinary remedy of substituting its own decision for the decision that the IDC accepted was incorrectly made. Not only did IDC have the expertise to make the right decision but a new decision would accommodate supervening circumstances such as price increases that had occurred over the two year period since the original tenders were submitted. The correct relief was therefore to refer the matter back to the IDC for reconsideration.