Monday, 08 March 2021

Courts warn the state against invalid tender extensions

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In the most recent case dealing with the aspect of the extension of bids, the Court once again ruled, that an organ of state could not award a tender, where the “validity period” was “unlawfully extended”. 

The Court also pointed out, that in all major precedents, where it had to deal with similar circumstances, it was found that the state acted “unlawfully” when awarding contracts, where the “validity period” has expired and irregularly been extended. 

It was explicitly ruled in one of these judgements that, “As soon as the validity period of the proposals had expired without the applicant (the state) awarding a tender, the tender process was complete - albeit unsuccessfully - and the applicant was no longer free to negotiate with the respondents as if they were simply attempting to enter into a contract.” 

Further, in the latter case, the tender document never stipulated a “validity period” and the Court was still of the view that, the purpose of the “validity period” is to keep bidders legally bound to their offers and for them not to, “Modify or withdraw their bids for a specific period. It is also used to fix the prices “quoted” in the bid.”

For that reason, the Court was very clear in its understanding that, “If it is anticipated that the award of the tender or the signing of the contract will not take place prior to the expiry of the bid validly period, the period can be extended.  In such a case a request must be directed prior to the expiry date to all bidders who have not yet been disqualified for their consent to the extension.”

“The period is generally expressed as a number of days calculated form the closing date for bids.”

The Court reminded the state that, “The validity period therefore does not relate to either the period or process of adjudication, but to the period up to the actual decision. Bids must be “kept alive” until a decision can be taken as to which bid is actually the successful one.”

According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, tendering agency, bidders have now been given the affirmation by the Courts that, they don’t have to agree to an extension of any bid, in cases where the “validity period”, has expired.“

However, bidders are further advised to engage the Accounting Officer of the relevant organ of state and advised them of the fact that it is unlawful to request an extension outside of the original “validity period”, says Davids.

Davids said, “These unlawful applications are hardly questioned by bidders, since there is an assumption, that whatever the state is doing, would be correct. Therefore it becomes imperative for both bidders and state officials, to continuously upskill their knowledge and understanding of these rules.”

Gerrit Davids, Lead Advisor, TaranisCo Advisory (Tendering Agency)

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Kindly let us know if you have any further queries.

Thank you and warm regards

Gerrit DavidsLead Consultant

TaranisCo Advisory CC

Web Site: http://www.taranis.co.za
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