15 March 2021

Court rules that all tenders must be opened in public

Submitted by Gerrit Davids

In a recent judgment in the Eastern Cape High Court, the court ruled that it would be procedurally unfair and unconstitutional of an organ of state, not to open tenders in public or to the publish the results on its website, as required by its own Policy.

In this case, the municipality stated that it could not open the bid in dispute, in public, due to the hard lockdown and that it was, at that stage, declared as a “Hotspot”, per se.

However, according to Court, the excuse forwarded by the municipality would not be a valid one, since “Section 217(1) of the Constitution obliges an organ of state, like the municipality, to contract for goods or services in accordance with a system which is fair, equitable, transparent, competitive and cost-effective”, with the focus on transparency being a determining factor, to give a true interpretation for the requirement to “open bids in public.”

Further, Regulation 23 of the Municipal Supply Chain Management Regulations (MFMA), clearly stipulates that bids must be “opened only in public”, at the same time or soon after it has closed.

Also, that any member of the public has the right to request that the names of all bidders be read out and where practical, as well as their bid prices. It also clearly instructs the Accounting Officer to record all bids and make the register available for public scrutiny and to publish both the register and the results on the website of the municipality.

The Court was of the view that the reason given by the municipality, that it could not open the bids because of hard lockdown and that it was a “Hotspot”, was not a valid excuse for not complying with the prescripts of Regulation 23 of the MFMA Regulations.

For that reason, the Court ruled that since the public and all connected bidders were not afforded their right to view the register or the results, as per its own Policy, the municipality failed in its Constitutional mandate to create a transparent, competitive and cost-effective tender process and that the awarded contract, be set aside and the process to be declared null and void. 

According to Gerrit Davids, Lead Advisor at TaranisCo Advisory, tendering agency, “It is my considered view and experience, that most bidders are not even aware of their Constitutional right to insist, that they are allowed to follow the officials, who collect bids from the tender box, and to enquire as to when and where these tenders will be opened.”

Davids says, “Similarly, officials make no effort to advise bidders and the public that they have a right to attend the opening of bids as well as accessing the results of a tender”.

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

TaranisCo Advisory CC
Web Site: http://www.taranis.co.za
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