This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its December 2014 decision in Nelson Mandela Bay Metropolitan Municipality v. MTN Service Provider Ltd, South Africa’s Eastern Cape High Court set aside a contract award decision after finding fundamental flaws in the government’s evaluation process. The dispute dealt with a municipal tender call for mobile voice and data services. The government struck an ad hoc “pre-evaluation” committee to screen the submitted proposals before forwarding the remaining proposals to the Bid Evaluation Committee. This process was challenged by one of the bidders. In reviewing the process, the Court determined that the “pre-evaluation” screening committee was improperly constituted and was not authorized by the municipality’s Supply Chain Management Policy (SCMP):
No provision was made in the SCMP for a pre-evaluation committee. This committee was not appointed by the City Manager, as required by the SCMP and, in the words of Hani, [the] committee was, ‘in truth, an ad hoc meeting of the individuals concerned which had no formal or legal status and which had no powers whatsoever’.
The Court concluded that the use of this unauthorized process was fatal to the legal defensibility of the tendering process and struck down the resulting contract award:
As the pre-evaluation committee had no lawful existence, provision for it not having been made in the SCMP, it had no lawful authority in terms of the SCMP – the empowering provision – or any other law, for that matter, to disqualify bids. In the result, the award of the tender must be reviewed and set aside on this basis.
As this case illustrates, government bodies should ensure that their bid evaluation and award procedures strictly adhere to applicable rules since procedural irregularities can be fatal to the defensibility of an evaluation process and to the validity of any resulting contract award.
