In the light of the Telkom and Joubert Galpin Searle cases, the answer would sound as simple as saying that all the bidders that submitted their bids should be sent notices requesting them to extend their bid validity.

However, this question came up again for consideration in the recently unreported judgement of Phillips South Africa where the court pronounced as follows:

“Based on authorities to which I have referred, in particular Wattpower and Aurecon, I have no difficulty in finding that there was no need for SITA to seek and obtain any written consent for the extension of the bid validity period from the rest of other bidders who were no longer participants in the tender process⁶ .

In reaching this conclusion, the court relied on amongst others, the Supreme Court of Appeal judgment of Aurecon South Africa (Pty) Ltd v Cape Town City⁷  where the following was held:

“It is unnecessary to require a ‘formal’ request from the tenderer in the present circumstances. Clause 140 merely requires an agreement by the affected tenderer in writing, and a decision by the chairperson before the expiration date, both of which were achieved in this case… And the complaint relating to the other tenderers has no merit whatsoever for the simple reason that they had already been found ineligible at that stage and were out of the picture.”

Whilst acknowledging that the SCA in Aurecon is the one that laid the basis for the proposition espoused in Phillips South Africa , this article argues that this position:

• leads to serious practical difficulties in bid evaluation/adjudication; and
• negates some of the established legal interpretations of what constitute an administrative action for the purposes of the Promotion of Administrative Justice Act⁸ 

Practical Difficulties in the bid evaluation/adjudication

When bidders submit their bids, organs of state in the normal cause, only communicate the outcome of their final position to the bidders once the Bid Adjudication Committee (“ the BAC”) or relevant delegated authority has approved the recommendations of the Bid Evaluation Committee  and/or the BAC.

Unless and up until the organ of state has rejected or communicated the unresponsiveness of particular bids, it is argued that all bids submitted as at the closing date, all stand on the same footing and are entitled to the same communication on the further conduct of the bid disposal process.

The following example bears testimony to the correctness of this approach:

The BEC in its evaluation regards Bidder A as having failed a particular qualifying criterion be it mandatory stage or functionality stage. In so doing it  progresses Bidders B and C to the next stage i.e evaluation for price and preference. During  the price evaluation stage, it then becomes apparent that the bid validity needs to be extended.

Following the Aurecon and Phillips South Africa  approach, the BEC only requests Bidder B and C to extend their bid validity as Bidder A is considered to have been already disqualified. Because Bidder A was never asked to extend its bid validity, its offer lapses.

The BEC recommends the appointment of Bidder C to the BAC but upon adjudication of the matter, the BAC holds the view that Bidder A was not properly disqualified and refers the matter back to the BEC for reconsideration.

In line with the authority in Telkom and Joubert Galpin Searle it will be legally impossible for the BEC to  re-evaluate Bidder A’s bid because at that stage  there is simply no offer by Bidder A to evaluate and at this late stage, the BEC cannot even ask Bidder A to extend its bid validity period.

If one had to follow the rational of the Aurecon and  Phillips South Africa judgement, the unintended consequences are that the BAC must either:

• begrudgingly accept an unmeritorious Bidder C that has been recommended by the BEC simply because Bidder A’s  offer has lapsed and cannot be further considered; or
• re-start the procurement process for fear of a potential litigation by Bidder A, who eventually would become aware that it was unfairly disqualified.

Any of the above options that might be chosen by the BAC will have  an effect of compromising the fairness and cost effectiveness of the  procurement process.

The Legal  Difficulties Presented by PAJA

Other than the practical considerations as outlined above, there is a more difficult legal conundrum that arises as a result of the  Aurecon and Phillips South Africa judgements. Can it truly be said that an organ of state has taken a decision as defined in PAJA if :

• the disqualification was simply a recommendation of the BEC; without
• the BAC and/or the appropriate delegated authority having finally adjudicated on the matter; and
• the organ of state concerned has not communicated the decision to the affected bidders who have been so disqualified.

If regard is had to the judicial authorities on what constitutes a “decision” which is an administrative action for the purposes of PAJA, it can hardly be said that the recommendation of the BEC to disqualify bidders for continued or further evaluation in the bid process is a decision as contemplated in PAJA.  The Supreme Court of Appeal in Marine Hout Bay (Pty) Ltd v Minister of Public Works⁹  held that:

“At the core of the definition of administrative action is the idea of action (a decision) of an administrative nature taken by a public body or functionary.”

Taking a cue from this authority, some of the elements that are an indication of what would constitute a decision are that:

“A conclusion must have been reached by the authority, pursuant to the evaluative process, as to how his or her statutory or public power should be exercised in the circumstances; and

There must have been an exercise of the statutory or public power based on the conclusion so reached.”¹⁰ 

The recommendations by the BEC do not fit the above definitional requirements as they do not as yet constitute the official decisions of an organ of state.

At this early stage of the process, an organ of state has not yet formally communicated its disqualification position to the bidder because the whole procurement process has not been concluded.

Furthermore, the uncommunicated deliberations of the BEC and/or BEC do not even meet the element of “direct external legal effect” which is one of the essential components of an administrative action as contemplated in PAJA¹¹ .  For something to have a direct effect, as De Ville argues, requires finality in the determination of rights which would exclude preliminary steps in a multi-staged decision. He further points out that external effect excludes internal administrative acts.¹² 

It is for this reason that the Phillips South Africa and Aurecon approaches fail to take into account the fact that BEC and/or BAC recommendations lack the qualities of being an administrative action and also that these recommendations lack finality until the appropriate authority has accepted the recommendations and taken a final decision.

A more pragmatic and legally sound approach that will avoid all of the above conundrums, would be that all bidders must be requested to extend their bid validity until such time as the organ of state has:

• finally disposed of the tender process; or
• at the very least has officially communicated its decision to disqualify some of the bidders from the evaluation process.

If the bidders are not even aware that they have been disqualified, they can hardly be regarded as being “out of the picture” or “no longer participants in the tender process” as alluded to in Phillips South Africa.