In its November 2014 decision in Mogale City Municipality v. Fidelity Security Services, South Africa’s Supreme Court of Appeal upheld a lower court decision that struck down the award of a security services contract due to the improper rejection of a competing bidder. The rejected bidder was disqualified after it was discovered that one of its directors was listed on the registry of contractors and individuals prohibited from doing business with the government. The bidder was unaware of the listing at the time of bid submission and failed to declare the listing as required by the tendering rules. The court determined that the rejection was “patently wrong” since a “bar on awarding a tender does not mean that a possible obstacle to the award of the tender cannot be removed before the decision on the tender is made.” In fact, the bidder had offered to remove the listed director but was not provided with an opportunity to do so. The court ultimately determined that the process was fundamentally flawed due to the procedural error and upheld the lower court decision to strike down the resulting contract award.
