Member of the Executive Council for Health, Western Cape v Tullis Laundry Solutions and Another (A216/2022) [2025] ZAWCHC 24 (21 January 2025) (2025)

INTHE HIGH COURT OF SOUTH AFRICA

WESTERNCAPE DIVISION, CAPE TOWN

APPEALCASE NO: A216/2022

COURTA QUO CASE NO: 5106/2021

Inthe application between

Dateof hearing: 8 November 2024

Dateof judgment: Judgment delivered electronically on 21 January 2025

JUDGMENT

Summary-The appeal involves a dispute between the Member of theExecutive Council (MEC) for Health, Western Cape, and Tullis LaundrySolutions,with Amlazi Equipment Services (Pty) Ltd as the secondrespondent regarding the supply, installation, and maintenance oflaundryequipment. The Court a quo per Nuku, J found that theMEC's evaluation process lacked objective criteria to justifyawarding the tender to a bidder otherthan the highest scoring one.

Theappeal was dismissed for the following key reasons:

1.Lack of Objective Criteria:

oThe tender evaluation process lacked clear, predefined, and objectivecriteriafor assessing functionality, its initial threshold role andbeyond.

oFunctionality was improperly used as a subjective factor in the finalawarddecision, contrary to the Preferential Procurement PolicyFramework Act (PPPFA) and relevant regulations.

2.Procedural Irregularities:

oThe evaluation process fused the initial functionality assessmentwith subsequentaward criteria, leading to inconsistencies andsubjectivity.

oTullis' bid was treated as acceptable during the initial evaluationbutlater penalized for deviations without clear, stipulatedcriteria.

3.Non-Compliance with Regulations:

oRegulation 5 of the Preferential Procurement Regulations (2017)requiresfunctionality criteria, points, and thresholds to beexplicitly stated in the tender documents. These were absent, makingthe processprocedurally unfair.

4.Unfair Advantage to Amlazi:

oThe evaluation process favoured Amlazi, based on subjective opinionsformedduring site visits and interviews, without tying theseassessments to objective, pre-disclosed criteria.

VANDEN BERG, AJ

[1]Functionality is the quality of being useful, practical, and suitablefor the purposefor which something was made, or the quality of beingsuited to serve a purpose well. In the sphere of procuring goods orservicesfor the state, functionality may also indicate a bidder'sexperience or the quality and reliability of the goods tendered.Functionalityhas a specific role in public procurement as a qualitycriterion. Functionality sets the bar for a tender to be responsiveor acceptable[1]. However, thequestion arises as to whether functionality could also serve asobjective award criteria for awarding a contractto a bidder otherthan the highest scoring one. If functionality could be applied assuch, at what stage of the bidding processmay it be used? These aresome of the aspects that are relevant to this appeal that deal withthe awarding of a bid for the supply,delivery, installation,testing, and commissioning of laundry equipment for the TygerbergHospital.

[2]The Member of the Executive Council for Health, Western Cape ('theMEC’), appeals against the decision of the High Court ofSouth Africa, Western Cape Division, Cape Town, delivered by JusticeNuku,on 5 October 2021. Leave to appeal to this Court was granted bythe Supreme Court of Appeal on 14 October 2023. Central to the appealis the review and setting aside of the appellant's decision to awardBid WCGHCC0232/2020 ("the Bid") to the second respondent,Amlazi ("Amlazi"). The first respondent ("Tullis")challenged the award of the Bid to Amlazi.

[3]Tullis was successful and the Court reviewed and set aside thedecision taken by theappellant (the MEC) to award the tender for thesupply, delivery, installation, testing, and commissioning of 3(three) laundrylines at the Tygerberg Hospital. The Court declaredthe contract concluded between the MEC and Amlazi invalid and orderedthatthe matter be remitted to the MEC so that the procurementprocess could commence afresh without unreasonable delay. The Courtalsogave directions that the procurement process, if it is to beevaluated based on functionality, must comply with the provisions ofRegulation 5 of the Preferential Procurement Regulations, 2017 ("theRegulations") published in terms of the PreferentialProcurement Policy Framework Act, 5 of 2000 ("PPPFA"). Thedeclarationof invalidity was suspended pending the remittal of theprocurement process to the MEC.

[4]Tullis challenged the award of the Bid to Amlazi on severalprocedural and substantive grounds.Ultimately, the dispute, inessence, relates to the specification, use, and application offunctionality when awarding the bid.On appeal, the following issueshad to be decided:

[4.1]What was Tullis' pleaded case in its founding papers in the reviewapplication, and did the courtorder go beyond what was pleaded?

[4.2]Did Tullis impugn the tender conditions based on the vagueness of thetender conditions?

[4.3]The difference between responsive Bids, deviations, and the stage atwhich the functionality enquirywas conducted.

[4.4]The just and equitable remedy granted by the Court.

[4.5]Did the MEC pre-empt the appeal?

THETENDER PROCESS

[5]The Bid concerns the supply, delivery, installation, testing, andcommissioning oflaundry equipment for the Tygerberg Hospital. Theneed for the Bid arose because the Tygerberg Central Laundry wasexperiencingchallenges with ageing equipment, which impacted theprovision of an efficient and quality laundry and linen service. TheBid envisagedthe modernisation of the Tygerberg Central Laundry over3 (three) years at a total contract value of R122,185,060 (includingVAT).The Tygerberg Central Laundry processes the laundry of 38institutions, including Tygerberg Hospital, Karl Bremer Hospital, andSomerset Hospital. The laundry has three washing lines, eachconsisting of a tunnel washing machine, ironer, garment finisher,blanket and towel folder. The average life span of some of theequipment is more than twenty-five years with the highest cost driverbeing maintenance on outdated machinery. The needs and demands inrespect of laundry service are substantial and integral to healthservice in the province.

[6]The MEG issued the tender on 16 July 2020, with the closing datebeing 21 August 2020.The closing date was extended to 14 September2020. Tullis and Amlazi and two other tenders submitted Bids. Tullissubmitted aBid for a total amount of R95,429,200.44, whereasAmlazi's Bid was for an amount of R122,185,060.00. Mzwalo Investments(Pty) Ltdtrading as Lumacon Airconditioning ("Mzwalo")tendered a price of R171,958,008. 79 and Zamil Engineers andContractors CC ("Zamil') offered a price ofR198,526,950.13.

[7]The invitation to bid was subject to the General Conditions ofContract ("GCC").Paragraph 5 of the pre-amble to theinvitation to bid advised the prospective bidders that:

"This bid will beevaluated on the Bidder's proven ability to provide the service i.e.infrastructure, technical and operationalcapacity as well as the90/10 Preference Procurement Points System as provided for in the biddocument."

[8]The MEC further indicated that all equipment covered by thespecification would bepurchased from one successful bidder. InSection 3 of the GCC, paragraph 3.11.4 the MEC reserved the right not'... to accept thelowest or any bids and reserves the right toaccept the proposal which it deems to be in the best interest of theWCGH even ifit implies a waiver by the Department of certain bidrequirements which the Department considers to be of minor importanceandnot complied to within the proposal'. However, no specificationwas made in the tender documents as to the evaluation criteria formeasuring functionality, the points for each criteria or the minimumqualifying score for functionality. The bid document doesnot specifythese issues or that the Bids would be evaluated on functionality.The invitation to bid further invited the biddersto state if theiroffer complied with the specifications. If a bidder indicated thatits bid did not comply, they were invitedto provide an explanation.Tullis noted that it did not comply with all of the specificationssince they offered different machineryperforming the same functions.The MEC further explained that not all deviation would automaticallyrender a bid non-compliantor non-responsive.

[9]On 14 August 2020, a compulsory site meeting was held at theTygerberg Central Laundryto grant potential service providers theopportunity to raise questions concerning the requirements and anyother related matters.This compulsory site meeting must bedistinguished from the inspection visits, or reference siteinvestigations subsequently conductedby three members of the BEC attwo of the bidders' local offices and installation reference sites inJohannesburg and Pretoriaduring which the equipment supplied byTullis and Amlazi was compared and evaluated in terms of aquestionnaire and discussionswith laundry managers and officials.[2]

[10]The Bid Evaluation Committee ("BEC")evaluated the 4 (four) Bids and prepared a memorandum dated 19November 2020. The BEC decided regarding the Bids submittedby Mzwaloand Zamil that:

"The offers of twohighest bidders were found non-compliant for the reasons indicated inthe attached evaluation sheet andtheir pricing is exorbitant. Itappears from the evaluation schedule that Mzwalo is listed on theNational database of companiesor persons prohibited from doingbusiness with the public sector and that it had no experience.Zamil's bid was unsigned and hadno experience and provided noreferences regarding the provision of laundry services andmachinery."

[11]It stands to reason that the BEC deemed Amlazi and Tullis' bids to be'compliant' and thus acceptable.The BEC did not reject Amlazi andTullis' bids as being 'non-compliant'. This is important since it iscommon cause that Tullis'bid deviated in 12 respects from the bidspecifications and that the BEC would subsequently find that 11 ofthe deviations werematerial.

[12]It further appears from the BEC's memorandum, as mentioned earlier,that 3 of its members werenominated to conduct site inspectionvisits to the recommended bidders' local offices and installationreference sites in Johannesburgand Pretoria, as indicated in theirbids.

[13]The BEC memorandum reports in paragraph 1.5 that:

"The purpose ofthese reference site visits was to see the equipment offered inproduction and speak to the Laundry Managersregarding theirexperience with the companies Amlazi and Tullis with regard to theirmaintenance and spares lead times, technicians'availability,frequencies of downtimes and breakages on different models ofequipment."

[14]Meetings were arranged where the representatives of Amlazi and Tulliswere required to make presentationsregarding the history of thecompanies, all aspects of their businesses, and the equipment theyhad offered in their bids. Theinstitutions that Amlazi and Tullisreferenced were also visited to observe the equipment at work andspeak to the Laundry Managers.For purposes hereof, a questionnairewas developed, which was used during the site inspections to compareand/or evaluate the twocompanies.

[15]Paragraphs 1.6 to 1.15 of the BEC memorandum regarding the evaluationof the equipment offeredby the two companies (Amlazi and Tullis)recorded the following:

"1.6. The equipmentsupplied by the two companies Tullis and Amlazi wascompared/evaluated in terms of the above and basedon discussionswith the Laundry Managers and officials of the InfrastructureDevelopment (Department of Public Works Gauteng) regardingcomplaintson the Jensen equipment offered by Tullis. Laundries must waitsometimes up to 4-6 weeks for Jensen spares to arrivefrom Germanyand 7 days or more for the technician to attend to breakdowns.

1.7.The Department of Infrastructure Development advised that Tullis have(sic) four techniciansbut only one experienced trained technician onthis specific equipment and sometimes rely on assistance from Amlazito do the maintenanceon some of their Jensen machines if theirtechnician is not available or do not have the knowledge to repair orinstall the specificmodel of Jensen/Senking equipment.

1.8.This would influence service delivery if the laundry equipment is notkept in optimal productionstatus and therefore would be anoperational risk for the Department to appoint Tullis.

1.9.The Kannegiesser equipment supplied by Amlazi is more reliable andspares are always available.Amlazi provides excellent service with30 (thirty) years' experience on Kannegiesser and Jensen equipment.Amlazi installed 20(twenty) Jensen/Senking and 11 (eleven)Kannegiesser tunnel washers so far and have 4 (four) trainedtechnicians in Cape Town and6 (six) in Gauteng. A technician isalways available on short notice and after hours, with the resultthat equipment does not havelong downtimes. Tullis does not haveenough knowledge about the Jensen/Senking equipment they offered,does not work after hoursand mainly concentrates on sales ratherthan on service of equipment. Tullis is a division of Lead Laundry &Catering and concentratesmainly on the sale of catering equipmentand on-premise stand­ alone washing machines to hotels, state,and private hospitals.Amlazi also have a service contract withPretoria Private Laundry and the manager reported excellent servicesfrom Amlazi and allequipment was in good working condition.

1.10. At theChris Hani Baragwanath hospital, the laundry manager indicated thatthey experience a problem with thesensors on the Jensen/Senkingequipment as well as with water pressure that is a common problemwith Jensen/Senking equipment.The Kannegiesser equipment have alonger service life than Jensen and therefore less breakdowns. TheJensen equipment providesmore problems [than] the (sic) Kannegiesserequipment and, therefore, the Kannegiesser equipment is preferred byall the laundriesthat the BEC members visited.

1.11. AtMasakhane Laundry, officials from the Department of InfrastructureDevelopment indicated that they are in theplanning phase to changethe PLC panels of the Jensen machines to Siemens control panels withthe assistance of Amlazi. The Departmentof InfrastructureDevelopment are responsible for the co-ordination of all maintenancerelating to all the Gauteng Department ofHealth's equipment,including laundry equipment.

1.12. Interms of pricing of spares, Amlazi is flexible, prices can benegotiated. Amlazi and does not charge for certainparts, whileTullis/Lead is not prepared to negotiate on any spares pricing.Furthermore, the Jensen/Senking spares are more expensivethanKannegiesser and not always available.

1.13. It wasidentified by the BEC members that most of the equipment installed byTullis are maintained by Amlazi technicians.

1.14.Furthermore, Tullisindicated several deviations from the equipment specifications. Thisis not acceptable. The BEC have discovered with oursite visits thatall the deviations have not a positive impact on productions. Thetumble drvers will have more moving parts, andwill need moremaintenance, and will be a high-cost factor. The hangers are notsuitable because its (sic) plastic and replacementwill be morefrequently. Mostly we have discovered no robo folders because of highbreakage of hangers. The deviations have a highercost implicationand that is why we cannot accept the deviations because ourspecifications are based on previous experience andit proofs (sic)successful.[3]

1.15. Inconclusion, in terms of the discussions and observations at thesereference sites, we are satisfied that Amlazihas the capacity,technical expertise available, and turnaround times to render theequipment, maintenance, and servicing as perthe specifiedrequirements. Amlazi has already proven its capacity with the currentmaintenance contracts at Pretoria Private Laundry,Tygerberg andLentegeur Laundries and it provides excellent service. Amlazi hasmore than enough capacity to provide the maintenanceand servicing ofthe equipment, with 10 trained technicians available countrywide and4 permanently based in Cape Town. We couldnot identify any referenceto service contracts with Tullis Solutions ..."

[16]Despite recording the aforesaid information in detail, the BECrecommended in paragraph 5 ofthe 'BID EVALUATION COMMITTEE APPROVALOF RECOMMENDATION' as follows:

'5 SITE VISIT FEEDBACK

The BEC noted DBACmembers concerns on the feedback from site visits in particular thelack of formal written feedback from officialengaged by BECrepresentatives on the site visits.

The BEC noted thefeedback from BEC representatives on the poor maintenance trackrecord of Tullis installation sites.

The BEC also notedfeedback from BEC representatives that officials engaged on the sitevisits were hesitant to provide formal writtenfeedback on the poormaintenance track record ofTulls installation sites.

The BEC resolved that inthe absence of formal written feedback from officials engaged by BFCrepresentatives on the site visitsthat the site visit feedback willbe noted as a concern and will not used in the BEC decision makingprocess to recommend a bidderas the site visit feedback may beregarded as hearsay in a legal challenge.'

[17]The BEC's memorandum was submitted to the Bid Adjudication Committee("BAC"),which requested, interalia, alist of deviations by Tullis from the Bid equipment specifications..The BEC prepared a further memorandum ("thesecond BEG memorandum"),which sets out each of the deviations and what the BEC considered tobe the impact of the said deviations[4].In weighing up the deviations, the BEC relied upon the investigationand conclusions reached by the reference site inspectiondelegation,as is recorded in paragraph 1.14 of the BEC Memorandum quoted above.This, in turn, led to the decision recorded inthe second BECmemorandum that:

"The laundryequipment technical experts in the BEC reviewed the Tullis deviationsand have confirmed that these would resultin operational andmaintenance challenges which will negatively impact service delivery.…The Tullis deviations are thereforenot acceptable. "

[18]On 18 January 2021, the BEC adopted a resolution in terms of whichAmlazi was recommended forthe award of the Bid subject tonegotiation being completed by 22 January 2021. Amlazi was informedon 4 February 2021 that itsBid had been accepted and Tullis wasinformed on 9 February 2021 that its Bid had been unsuccessful.Tullis' attorneys exchangedcorrespondence with the appellant and thereview application followed. In Tullis' founding affidavit, theawarding of the tenderis attacked on the following basis:

28.... Despite Tullis' tendered equipment and BBBEE status beingequivalent, and notwithstandingTullis' price being markedlysuperior, the Department awarded the tender to Amlazi.

29.This is, firstly, inconsistent with section 2(1)(f) of thePreferential Procurement Policy Framework Act 5 of 2000. It providesin peremptory terms that a "contract must be awarded to thetenderer who scores the highest points, unless objectivecriteria ...justify the award to another tenderer." In tum, Regulation 11(2)of the Preferential Procurement Regulations(prescribed pursuant toAct 5 of 2000) requires that "[i]f an organ of state intends toapply objective criteria in termsof section 2(1)(f) of the Act, theorgan of state must stipulate the objective criteria in the tenderdocuments." No objectivecriteria had been identified in thebid. Instead, the bid itself specifically refers to regulation 11 ofthe preferential procurementregulations, reiterating that "thebidder obtaining the highest number of total points will be awardedthe contract."I refer in this respect to clause 3.1 of WCBD6.1, which forms an integral part of Bid WCGHGC0232/2020. To theextent that paragraph3.11.4 of section 3 (containing the generalconditions on p. 74 of 120 of the tender documentation) might beconstrued as purportingto reserve a right to award the tender to adifferent bidder, the department has no such right to reserve (as theConstitutionalCourt observed in a related situation), I am advised.This applies particularly in circumstances where the subsequentprovision(paragraph 3.12 of the same section and on the same page)sets out the only evaluation criteria. It reads: "The bids willbe evaluated according to the 90/10 Procurement Preference PointsSystem. See the attached WCBD 6.1." Thus the only evaluationcriteria governing the tender were preferential procurement pointsand price.

[17]The MEG answered as follows to paragraph 29 of Tullis' foundingaffidavit:

"193. Save foradmitting (to the extent that they are correctly quoted), thestatutory and regulatory provisions referred toherein, I deny theremaining allegations in this paragraph.

194. Asregards the application of the statutory provisions and theRegulations to the facts of this matter, Isay the following:

194.1. First,before the issue of scoring the highest points arises, the Biddermust be compliant with the bid specifications. It is commoncausethat Tullis was not and that it sought no less than twelvedeviations.

194.2. Second, theexception in respect of the objective criteria to justify the awardto another tenderer does not arise. The facts are these:WhileTullis' tender was some R23 million lower than that of Amlazi, Tullisdid not meet the bid specifications.

194.3. Third,Tullis is mistaken, it is not correct that "the only evaluationcriteria governing the tender were preferential procurementpointsand price." I point out in this regard that clause 4 of theGeneral Conditions of Contract (FA, Annexure B4, p 114)states interms: "The goods supplied shall conform to the standardsmentioned in the bidding documents and specifications".

194.4. Fourth,what Tullis seeks to do, is to use a review mechanism to unseat areasonable, objective, impartial and carefully considered decisiontoappoint a compliant bidder (Amlazi). To achieve its ends, Tullisunjustifiably and impermissibly incorporates and imposes itsownspecifications in the place of the bid specifications as imposed."

[18]In opposing the review application, the MEC dispelled the notion thatonly price and preferenceprocurement points were considered inevaluating the Bids in stating as follows:

"I also point outthat the bid price is not the only major consideration. Functionalityand meeting the requirements of thebid specification must be metbefore the issue of price arise."

LEGALPOSITION

[19]Section 217 of the Constitution serves as the foundation upon whichthis appeal must be decidedin light of the relevant legislativeprovisions. In MilleniumWaste Management (Pty) Ltd v Chairperson of the Tender Board LimpopoProvince and others,[5]Jafta JA stated:

"The finalConstitution lays down minimum requirements for a valid tenderprocess and contracts entered into following an awardof tender to asuccessful tenderer (s217). The section requires that the tenderprocess, preceding the conclusion of contractsfor the supply ofgoods and services, must be 'fair, equitable, transparent,competitive and cost-effective'. Finally, as the decisionto award atender constitutes administrative action, it follows that theprovisions of the Promotion of Administrative JusticeAct (PAJA)apply to the process. This is the legislative background againstwhich the present matter must be considered."

[20]The PPPFA contains the following relevant provisions in furtheranceof the aforesaid constitutionalobjectives and requirements:

[20.1] The term"acceptabletender''is defined as "anytender which, in all respects complies with the specifications andconditions of tender as set out in the tender document.''[6]

[20.2] The term"functionality" is defined in Regulation 1 of thePreferential Procurement Regulations, 2017 published in GovernmentGazette 32 of 2017 whichapplied at the time of the award of thetender that functionality is "... an ability of a tenderer toprovide goods or services in accordance with specifications as setout in the tender documents."

[21]There is, therefore, a clear overlap between the term "acceptabletender" and "functionality".

[22]In terms of Regulation 4 (as it applied at the relevant time), anorgan of State must indicatein the invitation to submit a tender:

[22.1] If that tenderwill be evaluated on functionality.

[22.2] That theevaluation criteria for measuring functionality are objective.

[22.3] The evaluationcriteria, weight of each criterion, applicable values and minimumqualifying score for functionality.

[22.4] That no tenderwill be regarded as an acceptable tender if it fails to achieve theminimum qualifying score for functionalityas indicated in the tenderinvitation, and

[22.5] That tenders thathave achieved the minimum qualifying score for functionality must beevaluated further in terms of theapplicable prescribed point system.

[23]Regulation 5 of the Procurement Regulations reads as follows:

"(1) An organ ofstate must state in the tender document if the tender will beevaluated on functionality.

(2)The evaluation criteria for measuring functionality must beobjective.

(3)The tender document must specify-

(a)The evaluation criteria for measuring functionality.

(b)The points for each criteria and, if any, each sub-criterion; and

(c)The minimum qualifying score for functionality.

(4)The minimum qualifying score for functionality for a tender to beconsidered further-

(a)Must be determined separately for each tender; and

(b)May not be so low that it may jeopardise the quality of the requiredgoods or service orhigh that it is unreasonably restrictive.

(5)Points scored for functionality must be rounded off to the nearesttwo decimal places.

(6)A tender that fails to obtain the minimum qualifying score forfunctionality as indicatedin the tender document is not anacceptable tender.

(7)Each tender that obtained the minimum qualifying score forfunctionality must be evaluatedfurther in terms of price and thepreference points system and any objective criteria envisaged inregulation 11."

[24]Section 2(1)(f) of the PFA provides that the contract must be awardedto the tenderer who scoresthe highest points, unless objectivecriteria justify the award to another tenderer. In line herewith,Clause 3.1 of the GCC providesregarding adjudication using a pointsystem: '... Subject to Regulation 11 of the Regulations, the bidderobtaining the highestnumber of total points will be awarded thecontract.'

[25]In RainbowCivils CC v Minister of Transport and Public Works, Western Cape andothers,[7]the Court stated:

"Functionality as itis variously defined in the Tender Document, concerns the ability ofthe tenderer to deliver what is required,to meet the needs of thetender, to deliver a service or commodity which is fit for purpose.It is based on the objectively measurablecriteria of experience andstanding, capability and resources. As such it has direct bearing onthe question of whether a tenderis cost­ effective, i.e. whetherit yields the best possible value for money. To my mind it isself-evident that it is notcost effective to award a tender to aparty who ticks the right boxes as regards price and preference, butis unable to get thejob done properly- whether through lack ofexperience, adequate personnel or financial resources."

[26]Rainbow Civils suggests that functionality can serve more than a"gate­keeping"function and can be taken into account a second time around after atenderer has been evaluated on price and preference whereit may nothave achieved the highest scores, but demonstrated a superior abilityto provide the relevant goods and service. Thisdual role offunctionality as an assessment tool in decidi.ng upon theresponsiveness or acceptability of a tender opposed to itsbroadergeneral application has not yet been resolved by the Courts. In NexusForensic Services v SASSA[8]the Court disagreed withthe reasoning in Rainbow Civils. In Nexus, Van Niekerk AJ sets outthe history of this controversial issueand refers to the decision inSizabonkeCivils CC trading as Pilcon Proiects v Zululand DistrictMunicipality,[9]which effectively rejected the use of functionality as an awardcriteria. In Nexus, it was held that the provisions of section2(1)(f) of the PPPFA are clear, namely that the objective criteriareferred to therein must be additional criteria, in other wordsthesemust be criteria over and above those which have already receivedconsideration as specific goals in terms of section 2(1)(d)and (e)of the PPPFA.

[27]The Court, therefore, rejected in Nexus the dual application offunctionality as part of ourlaw. Functionality should be assessed asa qualification criterion in the first stage of adjudication, withonly bidders obtainingthe minimum threshold score for functionalityproceeding to the second round of adjudication, where only price andpreference pointswill be taken into account in ranking bidders.

[28]Section 2(1)(f) of PPPFA only permits the consideration of objectivecriteria in determininga tender. This raises the question as towhether the site visits conducted by the BAC, the representations,and the subsequentadjudication by the BEC and BAC were objective.Again, a distinction needs to be drawn between an opinion formed bythe membersof the BAC and objective criteria.

[29]In Walelev City of Cape Town,[10]the following is stated in the majority judgment:

"If indeed thedecision-maker was so satisfied on the basis of these threedocuments, his satisfaction was not based on reasonablegrounds. Thedocuments fall far short as a basis for forming a rational opinion.Nor does the mere statement by the City to theeffect that thedecision-maker was satisfied suffice. In the past, whenreasonableness was not taken as a self-standing groundfor review,the City's ipse dixit could have been adequate. But that is nolonger the position in our law. More is now required if thedecision-maker's opinion ischallenged on the basis that thesubjective precondition did not exist. The decision-maker must nowshow that the subjective opinionit relied on for exercising powerwas based on reasonable grounds. In this case, it cannot be said thatthe information, whichthe City admitted had been placed before thedecision-maker, constituted reasonable grounds for the latter to besatisfied."

[30]The MEC acted on the basis of the findings and recommendations by theBAC's officials who attendedthe site inspections and listened to therepresentations by the two tenderers and other officials. If the MECwished to award thetender to an entity other than which scored thehighest points in terms of section 2(1)(f), not only must thisdecision be basedon objective criteria, but the objective criteriamust also be fleshed out in the tender documents or the invitation oftender.Allowing subjective criteria to be used as an overallspanning functionality test will be at odds with section 2(1)(f) ofthe PPPFAread together with the regulations.

[31]In QCivils (Pty) Ltd v Mangaung Metropolitan Municipality and others,[11]the Court stated:

"Objective criteriawith reference to s 2(1)(t) of the PPPFA referred to supra can bedefined as those (a) not listed in paragraphs(d) and (e) of section2(1) of the PPPFA, (b) which are objective in the sense that thesecan be ascertained objectively and theirexistence or worth does notdepend on someone's opinion and (c) bear some degree of rationalityand relevance to the tender orproject."

[32]The decision-maker may not view or consider information which wasnever asked from the tenderers.The decision-maker can, therefore,only view the information put before it. Otherwise, it may lead tosubjective factors beingtaken into consideration. This may lead towhat the Court described in QCivils as"itis well known that when subjective factors walk in the door,rationality flies out of the window".The objective criteria justifying the awarding of a tender to atenderer other than the one with the lowest tender shouldnotcause the process to lose theattributes of fairness, transparency, competitiveness,and cost-effectiveness. In SouthAfrican National Roads Agency Limited v Tol Collect Consortium,[12] Wallis JA (as he wasthen) held:

'[20] As to objectivity,which is an aspect of the constitutional requirement that the publicprocurement process be fair, it requiresthat the evaluation of thetender be undertaken by means that are explicable and clear and bystandards that do not permit individualbias and preference tointrude. It does not, and cannot, mean that in every case the processis purely mechanical. There will betenders where the process isrelatively mechanical, for example, where the price tendered is theonly relevant factor and the competingprices are capable of readycomparison. The application of the formula for adjudicatingpreferences under the PPPFA may provideanother example. However, theevaluation of many tenders is a complex process involving theconsideration and weighing of a numberof diverse factors. Theassessment of the relative importance of these requires skill,expertise, and the exercise of judgmenton the part of the person orbody undertaking the evaluation. That cannot be a mechanical process.The evaluator must decide howto weigh each factor and determine itssignificance in arriving at an appropriate decision. Where thatoccurs it does not meanthat the evaluation is not objective.Provided the evaluator can identify the relevant criteria by whichthe evaluation was undertakenand the judgment that was made on therelative importance and weight attached to each, the process isobjective and the procurementprocess is fair.

[21] Where the evaluationof a tender requires the weighing of disparate factors it willfrequently be convenient for the evaluatorto allocate scores orpoints to the different factors in accordance with the weight thatthe evaluator attaches to those factors.But the adoption of such asystem, without its being disclosed to tenderers in advance, does notmean that the tender process isnot objective. If anything, theadoption of the scoring system enhances the objectivity of theprocess, because, in the event ofa challenge to the award of thetender, the basis upon which the evaluation was undertaken emergesclearly."

[33]The KwaZulu-Natal Local Division, Durban considered the role thatfunctionality plays in evaluatingand awarding bids in WattpowerSolution CC and another v Transnet SOC Limited and another.[13]Transnet argued in the Wattpower judgment that functionality and duediligence are the same. The test for functionality as a testforresponsiveness of bids involves a cursory glance at compliance, whilethe due diligence exercise process followed in Wattpowerprovides foran in-depth assessment of capability. Could an organ of the state bepenalised before the final awarding of pointsis made to conduct amore thorough investigation, in order to satisfy itself with thecompetence of the bidder to carry out theworks? As is the case inthis appeal, the bidders in Wattpower were given notice, in advance,of the investigation or due diligencethat would be conducted in theform of the inspection inloco andoral submissions. Transnet argued that s2(1)(f) of the PPPFA, readtogether with the relevant regulations, clearly contemplatesthat,apart from the evaluation based on points and preference, anobjective assessment is provided to determine whether the preferred(or highest scoring) bidders are capable of performing in terms ofthe contract.[14] Transnetargued that the objective criteria are not only applied in awardingthe contract but to determine the bidder's abilityto 'get the jobdone'. Chetty, J, in Watt Power, stated at para [16] as follows:

'...Transnet submitsthat the objective criteria it applied in not awarding the contractto the applicant was essentially the applicant'sinability to "getthe job done". In this regard, see Rainbow Civils CC v Ministerof Transport and Public Works WesternCape and Others (21158/2012){2013} ZAWCHC 3 (6 February 2013), para 109 where the court stated:

"Functionality asit is variously defined in the Tender Document concerns the abilityof the tenderer to deliver what is required,to meet the needs of thetender, to deliver a service or commodity which is fit for purpose.It is based on the objectively measurablecriteria of experience andstanding, capability and resources. As such, it has a direct bearingon the question of whether a tenderis cost-effective, i.e. whetherit yields the best possible value for money. To my mind it isself-evident that it is not costeffective to award a tender to aparty who ticks the right boxes as regards price and preference, butis unable to get the jobdone properly - whether through lack ofexperience, adequate personnel or financial resources ". '

[34]In UrbanIcon (Pty) Ltd Sourth Africa National Roads Agency Soc Ltd andothers,[15]the Court had to decide on the question whether a state entity maytake into consideration the ability of a tenderer to deliveronseveral tenders simultaneously, despite having qualified and scoredthe highest. Tolmay, J held that:

'[25] The PPPFARegulations define "functionality" as "the ability ofa tenderer to volume goods or services in accordancewithspecifications as set out in the tender documents". In terms ofregulation 5(5), a tender that fails to obtain the minimumqualifyingscore for functionality as indicated in the tender documents wouldnot be regarded as an acceptable tender. Regulation5(7) providesthat each bid that obtained the minimum qualification score forfunctionality must be evaluated further in termsof price and thepreference point system and any objective criteria envisaged inregulation 11. The objective criteria referredto in regulation 11are the objective criteria contemplated in section 2(1)(f) of thePPPFA. SANRAL argued that it is clear fromthe language and scheme ofthe PPPFA and the applicable regulations that functionality is simplya threshold assessment to determineif a bidder has the minimumattributes necessary to provide the services as specified in thetender document. It was argued correctlythat an assessment intofunctionality and an objective criteria assessment may considersimilar general topics, but the assessmentis not the same for threereasons:

[25.1] The functionalityassessment occurs before the preference points assessment and theobjective criteria assessment occursafter the preference pointassessment.

[25.2] The functionalityassessment is ordinarily a binary assessment of all timeouslysubmitted bids. The due diligence assessmentis an assessment of thehighest scoring bid vis-a-vis one or more other acceptable bids.

[25.3] The purpose of afunctionality assessment is to determine whether bids are acceptableor not. The purpose of a due diligenceassessment is to determinewhether the tender should be awarded to a better other than thehighest scoring bidder.

[26] Urban Icon'sargument, on the other hand, is that, once it passed the binaryfunctionality assessment, SANRAL was obliged toassess it in terms ofthe 90/10 principle. Thereafter, it was not permissible to take intoconsideration any other factor includingthe factor that the tendererwas to be appointed to deliver all 7 projects. Urban Icon's argumentbasically is that, if such considerationswere relevant, they oughtto have been included in the tender documents. However, this positionloses sight of effect as it wascorrectly argued by SANRAL that theability to deliver on a number of tenders cumulatively would not beincluded in the subjectmatter of each individual tender. I agreethat the consideration of the capacity and ability of a tenderer todeliver on more thanone tender is a relevant and rationalconsideration. The holistic approach argued for by SANRAL is bothrational and in accordancewith the applicable legislation. To ignorethe background and facts would be particularly shortsighted and couldhave devastatingconsequences for SANRAL and for the country. Acontextual approach is therefore called for, considering the abilityof a tenderto perform in seven tenders is, simultaneously, bothlawful and rational, even if the individual tenders did not makeprovisionfor such an eventuality.'

[35]The facts in this appeal differ from those that served before thecourt in the Urban Icon's matter.The MEC employed functionality bothas a minimum requirement test to determine if bids were acceptableand also objectively afterthe bids that were deemed acceptable werescored for price and BBEE. It would have been different if the bidwas awarded to Tullis,but after that, due to a due diligenceexercise as employed in Urban Icon's, it was found that the tendershould not be awardedto Tullis. The BEC conflated the functionalityassessment before the preference points assessment and the objectivecriteria assessment(if specified) that may occur after thepreference point assessment.

[36]Therefore, the question to be answered in this appeal is howobjective the opinions are of themembers of the BAG who conductedthe site visits and participated in the submissions and discussionswith Amlazi and Tullis. Howdid the reference site inspectionsinfluence the decision-making rationale of the BAG? Did the BEGdivorce itself from the findingsof the three delegated BAG referencesite inspection delegations, as it proclaims it did? The answer tothese questions is foundin paragraph 1.14 of the BEG memorandum thatrecords the Tullis' deviation was evaluated based upon theinformation gathered duringthe reference site inspections[16].In the Watt Power matter, the unsuccessful tenderer argued that anyopinion expressed in such a process is subjective and inconsistentwith the requirements in s 2(1)(f). In Ministerof Law and Order v Dempsey,[17]the court held that the prerequisite of an opinion (in that casedealing with an arrest and detention) was a subjective jurisdictionalfact. The tender lacks objective criteria for measuring fairly and ina transparent manner bid specification deviations. The specificationfails to establish clear, objective criteria that distinguish betweenmajor and minor deviations, which could lead to inconsistentassessments.

[37]Section 2(1)(f) of the PPPFA provides that, where a contract is to beawarded to an entity otherthan that which scored the highest pointsin terms of s2(1)(f), such a decision must be based on objectivecriteria. The objectivecriteria must also be fleshed out in thetender documents or in the invitation to tender. The failure tostipulate such objectivecriteria constitutes in itself anirregularity.

[38]In PelatonaProjects (Pty) Limited v Phokwane Municipality and 14 others,[18]the court held that:

' ... Objective criteriamust, in my view, be discernible from the information made availableto the decision-maker. If this isnot the case, it would mean thatthe decision-maker may look at criteria or information other thanthat put before it. Such a decisionwould detract from the fairnessof the process. It may well lead to subjective factors being takeninto consideration. It is wellknown that, when subjective factorswalk in the door, rationality flies out the window. The objectivecriteria justifying the awardingof the tender to a tenderer otherthan the one with the lowest tender should not cause the process tolose the attributes of fairness,transparency, competitiveness, andcost effectiveness.'.[19]

[39]The importance of objective criteria was also recognised by Wallis,JA in SouthAfrican National Roads Agency Limited v Toll Collect Consortium.[20]There may be tenders where the process is relatively mechanical.However, the evaluation of many tenders, such as the one in thisappeal, is a complex process involving the consideration and weighingof a number of diverse factors. The evaluator must decidehow toweigh the different factors and determine their significance inarriving at an appropriate weighted decision. The relevantcriteriamust be identifiable from the bid invitation or specification. Theevaluation process will be objective and fair if therelevantcriteria can be identified.

[40]The overriding principle that a decision-maker must act in accordancewith an "ever-flexible duty to act fairly" fairnessmust be decided on the circumstances of each case. In particularcomplex tenders, it may, therefore, be fair toask for clarificationor details required for evaluation; however, whatever is done may notcause the process to lose the attributesof fairness, objectivity,transparency, competitiveness, and cost effectiveness.

WHATWAS TULLIS' PLEADED CASE IN ITS FOUNDING PAPERS IN THE REVIEWAPPLICATION?

[41]It was argued on behalf of the MEC by Ms Pillay SC that Tullis failedto plead in its foundingaffidavit the ultimate true ground of appealrelied upon by the Court a quo regarding functionality. Thejudgment held, so the argument went, that Tullis' ground of reviewwas that, in the process of evaluationof the bids, the MEC conflatedthe acceptability of the bid with functionality.

[42]It is trite that, in motion proceedings, the affidavits constitutenot only the evidence, butalso the pleadings. A party is accordinglyexpected to allege the required facts and present evidence in supportthereof. The necessaryfacts to prove the claim appear from thefounding affidavit and its supporting documents. Holding parties topleadings is not pedantryin the words of Justice Jafta in theminority judgment in SATAWUand another v Garvas and another[21]but an integral part ofthe principle of legal certainty which is an element of the rule oflaw, one of the values on which ourconstitution is founded. However,this contention by the MEC does not account for the followingfactors.

[43]In paragraphs 28 and 29 of the founding affidavit ,Tullis allegesthat the Bid was awarded despiteTullis' tendered equipment and BBBEEstatus being equivalent, and notwithstanding Tullis' price beingmarkedly superior to Amlazi.Tullis further contended that noobjective criteria had been identified in the bid. Instead, the biditself specifically refersto regulation 11 of the preferentialprocurement regulations, reiterating that "the bidder obtainingthe highest number oftotal points will be awarded the contract. Theonly evaluation criteria governing the tender were preferentialprocurement pointsand price.

[44]In the course of submissions in response to the point raised by theMEC, Mr Maleka SC, who appearedwith Mr Scott on behalf of Tullis,submitted that the issue of functionality was raised before the Courtof first instance andwas fully argued. Tullis' argument postulatedthat the MEC's decision to evaluate the tender based on functionalityin the absenceof objective criteria was unlawful. The argumentbefore us, as did the judgment below, proceeded on the footing thatthe issueof functionality is directly related to the constitutionalprinciple of a fair and open procurement process. That being so, itis trite, so the argument went, that the Court may raise such anissue mero moto.

[45]It should be further observed that the narrow approach favouring thestrict application of theaforementioned principles is furtherqualified on the basis that the Court has a wide discretion inapplications in which disputesof fact arise to ensure that a justand expeditious decision is reached in matters where an applicationis brought before Courtin terms of Uniform Rule 53. Uniform Rule53(4) expressly provides an applicant in review proceedings toamplify its founding affidavitupon receipt of the record. It wouldbe an oversimplification to find that the issue of functionality isnot fundamental to theaward of the tender in casu or was the pleadedand argued case before the Court a quo and before us. Itfollows from all these considerations that the judgment did not gobeyond the pleaded case and the Court wasentitled to review theadministrative decision of the MEC regarding the role offunctionality in awarding the bid.

DIDTULLIS IMPUGN THE TENDER CONDITIONS BASED ON THE VAGUENESS OF THETENDER CONDITION?

[46]The Constitutional Court, in AllpayConsolidated v Chief Executive Officer, SASSA,[22]held that vagueness anduncertainty are grounds for review under section 6(2)(i) of PAJA.Clarity and certainty are directly relatedto the rule of law andjust and fair administrative action. If tender specifications areunclear or vague, it may render a procurementprocess procedurallyunfair under s 6(2)(c) of PAJA. Every person is entitled to know thecase s/he must meet. This, in turn, requiresadequate and sufficientinformation to enable a prospective tenderer to make bids that coverall the requirements expected forthe successful award of the tender.

[47]In this regard, the MEG argued with reason that Tullis did not raisevagueness of the tenderspecification as basis for the Court'sfinding that the award should be reviewed and set aside.

[48]The MEC relied heavily on the judgment by Rogers J (as he was then)in SMECSouth Africa (Pty) Ltd v City of Cape Town and others; SMC SouthAfrica (Pty) Ltd v City of Cape Town and others,[23]in which it was correctly held that vagueness as a review groundconcerning the decision to issue tender invitations and theirtermsrather than with the decision made. It is the BEG and BAC's functionto evaluate the tenders in accordance with the tenderdocuments.Tullis never mounted an attack against the tender specifications. Itis not alleged that the tender specifications bylate procurementlegislation are susceptible to judicial review. To the contrary,Tullis' attack is against the fairness of theprocurement processpreceding the decision.[24]

[49]The aforementioned distinction between the vagueness of tenderspecifications opposed to thefairness of the administrative processgoes to the heart of the matter. Tullis argues that the tenderspecifications are clearthat bids will be evaluated according to the90/10 Procurement Preference Points System. The tender specificationsdo not state,in accordance with Regulation 5 of the PreferentialProcurement Regulations, 2017, that the tender will be evaluated onfunctionalityand do not specify the evaluation criteria of measuringfunctionality, the points for each criteria, or any sub­ criteriaandthe minimum qualifying score for functionality. The processfollowed by the BEC and, in particular, conducting reference sitevisitsand obtaining further information are undeniably related tofunctionality. In the absence of clearly stated criteria with whichtenderers must comply and which the BEC members use in evaluating theoffers, the process could be rendered unjust. At issue isnot the bidspecifications, but rather the manner in which the BEC and BACevaluated the bids without clear objective criteriaandspecifications. This has a further consequence that, in the absenceof expressly stated criteria, uncertainty arises regardingthe valueto be attributed, if any, to deviations. This, in turn, further givesrise to the next dispute to be decided.

THEDIFFERENCE BETWEEN RESPONSIVE BIDS, DEVIATIONS, AND THE STAGE ATWHICH THE FUNCTIONALITY INQUIRY WAS CONDUCTED

[50]In SMEC, the BEC found that SMEC's bid was non-responsive, becauseSMEC had proposed materialdeviations from the advertised items. Itwas thus not further evaluated on price and performance points. Theevaluation, therefore,did not involve scoring for functionality butprescribed minimum requirements relating to key personnel, supportstaff, and thelike with which bidders had to comply in order to befound responsive.[25]

[51]Tullis' bid was not in casu deemed to be non-responsive. Itwas not disqualified along with the other two unsuccessful tenderersin the initial evaluationstage. In the SMEC matter, the tenderdocument stated expressly a "test for responsiveness"listing what Rogers J described as the employers' undertakings in theform of a series of injunctions.

[52]In the comparison thereto, the bid specifications in this matterprovided in the pre-amble thatthe bid would be evaluated on thebidders' proven ability to provide the services, i.e. infrastructure,technical an operationalcapacity as well as the 90/10 PreferentialProcurement Points System, as specified in the bid document.

[53]Paragraph 5 of the preamble expressly refers in this regard to theattached form marked "WCBD6.1"that is incorporated in thetender specifications. Form WCBD6.1 bears the heading "PREFERENCEPOINTS CLAIM FORM IN TERMS OF THE PREFERENTIAL PROCUREMENTREGULATIONS 2017 CODES OF GOOD PRACTICE".The form serves as a claim form for preference points for Broad-BasedBlack Economic Empowerment (B­BBEE) Status Levelof contribution.It does not contain objective criteria regarding functionality.[26]

[54]The preamble further states in paragraph 6 that the 'bid will beawarded subject to the inspection of the premises by duly authorisedrepresentatives of the Department. Subject toa visit to themanufacturers' premises (local or overseas) by three (3)representatives of the Department ...'

[55]The procurement process is usually divided into two stages. The firstis a mandatory stage inwhich bids are adjudicated forresponsiveness. The MEC argues in this regard that Tullis' bid wasunresponsive due to the 12 deviations,11 of which were found to bematerial. However, Tullis was not disqualified in the preliminarymandatory evaluation of the bids,as was the case with the other twounsuccessful tenderers. There is no dispute that both Tullis andAmlazi were evaluated in accordancewith paragraph 6 of the preambleto the invitation to bid. This was despite the fact that the tenderspecifications stated thata bid will be awarded subject to theinspection to be conducted as described aforesaid. The tenderspecifications did not envisagea 3-stage evaluation processconsisting of a mandatory evaluation, the awarding of points forprice and 8-BBEE and thirdly, functionality.

[56]In SMEC, the Court draws a distinction between cases where thetenders required functionalityto be evaluated. Not all tenders needto invariably require functionality to be scored. The Court held:

'The fact thatfunctionality was not to be evaluated does not mean thatfunctionality in a more general sense was irrelevant. Inorder toensure that competent services would be supplied, the Tender Termsincorporated detailed eligibility requirements forkey personnel,support resources, and track record. If a particular bidder met theserequirements and scored the most points forprice and preferentialprocurement, residual functionality concerns could be addressed inthe risk analysis contemplated by clauseC.3.11.4, a component ofwhich was the tenderer's ability to fulfil its obligations.’[27]

[57]The relevant clause of the Tender Terms and SMEC differed vastly fromthe bid's specificationsin this matter. In SMEC, the relevant clauseof the Tender Terms provided that 'The conclusions drawn from thisrisk analysis will be used by the Employer in determining theacceptability of the tender offer...'. In SMEC, the Tender Termsexpressly reserved the right that the employer only had to accept thetendered offer if it does notpresent material risk and that theemployer reserves the right to consider the mixed ranked tenderer.

[58]SMEC held correctly that function remains an overriding requirementof our procurement law foundedupon the requirements of theConstitution. This does, however, not detract from competingconstitutional obligations regardingcertainty, clarity, the rule oflaw and fair and open administrative processes and procurement.

[59]The process used by the BEC and BAC fused the functionalityassessment regarding the acceptabilityof Tullis' tender withfunctionality as an overriding requirement. The manner in which theydealt with Tullis' deviation resultedin a subjective evaluation ofthe information gathered by the BEC during the inspection in locoand other investigations. It is impossible to determine the objectioncriteria used in this process, irrespective of whether theconclusionreached was accurate. The process was not objective, open, and fair.

[60]Even if the MEC and BAC's finding that Tullis' bid should have beenheld nonresponsive or unacceptableat the first functionality enquiryis correct, it does not enshrine the process with theconstitutionally mandated requirementsof fairness and openness. InAllpay, the Constitutional Court held that a declaration ofinvalidity should follow once a reliableground has been established.The equitable remedy to be granted following such a finding requiresits own consideration.

THEJUST AND EQUITABLE REMEDY GRANTED BY THE COURT

[61]Once a finding of invalidity is made the effected decision or conductmust be declared unlawfuland a just and equitable order must begranted. At this stage the inevitability of a similar outcome, if thedecision is retaken,may be one of the factors that will have to beconsidered. Contracts concluded within the constitutional andstatutory procurementframework are concluded not on behalf of thestate but in the public's interest. Accordingly, those most closelyassociated withthe benefits of a contract must be given due weight.The Constitutional Court held in AllPay thatthe interest of grant beneficiaries and, in particular, child grantrecipients in an uninterrupted grant system will play amore majorrole than the rights or expectations of an unsuccessful bidder.[28]

[62]In the exercise of the Court's remedial discretion, the nature of theirregularity and the extentto which circumstances have changedduring the intervening period are determining factors. If theirregularity taints the entiretender process, due to, for example,the tender criteria being vague, a fresh tender process should berun. Should the irregularityrelate to the manner in which thedecision was taken, there would normally be no reason why theexisting tenders cannot simplybe reconsidered, unless circumstanceshave changed, and it is no longer appropriate to award the contractbased on the originaltender process.[29]

[63]It does not follow in all cases that, in deciding on a just andequitable remedy despite thedeclaration of invalidity, the Courtshould set aside the contracts concluded pursuant thereto. This is,however, a case-to-case-basedinquiry.[30]In deciding if the order is just and equitable, it should beconsidered if it resulted in fairness to all implicated parties andmust account for all the relevant facts and circumstances. In mostinstances, the Court will not be in as good a position as theadministrator to substitute its own decision for that which forms thesubject of the review. A further factor to be consideredin thisregard is delay. The Constitutional Court, in TrenconConstruction,[31]held that "delaycan cut both ways".The inappropriateness of especially a substitution order may becomeevident with the passing of time. However, delay occasionedby thelitigation process should not easily cloud a Court's decision inreaching a just and equitable remedy. The Appeal Courtshould furtherordinarily base its decision on the facts that existed when theoriginal decision was made.

[64]Nuku J held that the MEC did not disclose to the Court to what extentthe tender had been implemented.The omission to provide thisinformation was explained in argument by Ms Pillay SC on behalf ofthe MEC on the basis that the relevantcontracts and purchase orderswere not yet in existence at the time when the MEC's answeringaffidavit was prepared. Mr MalekaSC, however, correctly relied uponthe principle that officials such as the MEC may not be allowed toavoid their constitutionalobligation to provide all the necessaryinformation that may be relevant to a Court in instances such asthis.[32]

[65]The Court a quo's order to suspend the declaration ofinvalidity subject to the re-adjudication of the tenders should,therefore, be judged againstthe information available at the time.The relief granted can thus not be faulted.

[66]In light of the further evidence presented to the Court on appealthat was admitted by agreementbetween the parties, it has becomecommon cause that Amlazi has successfully installed all three laundrylines. The MEC's submissionregarding irreparable financial prejudiceand, more importantly, the more than likely disruption of theprovince's public healthcaresystem carries more weight than Tullis'rights. It would serve no purpose to commence the procurement processafresh. The threewashing lines are installed, and there is no needto replace them in approximately the next 15 to 20 years. Tullisinvited thisCourt to engage the issue of compensation, but this doesnot need to be dealt with since it was not ventilated in theaffidavitsor claimed as a relief. In appropriate circumstances, atenderer in Tullis's position is entitled to recover its lost profitsinterms of PAJA. Where the state's misconduct is deliberate anddishonest and where substitution or remittal is not a viable formofrelief, circumstances may exceptionally require compensatory reliefto ensure a just and equitable result. The appropriate avenuefor aclaim for compensation for loss sustained for a breach of theprecepts of administrative justice is PAJA[33].

However,this is not the end of the inquiry into just and equitable relief. Itis common cause between the parties that Amlazi wasawarded a 3-yearmaintenance contract as part of the successful tender. Although thethree laundry lines have been installed, themaintenance contract isongoing. The Court had insufficient information before it to rule onthe consequences of a declarationof invalidity on the maintenancecontract. The Appeal Court is in a similar position. In Allpay,[34]Justice Froneman held, regarding the appropriate remedy in thatmatter, that:'

... Part of thesubmissions dealt with the constitutional obligations that CashPaymaster may have to continue with the currentsystem even if thetender award is set aside, until a new system is in place. Theseconsiderations raise difficult factual andlegal issues. Theinformation currently before us is outdated and inadequate. It wouldbe inappropriate to make a decision on ajust and equitable remedy inthe absence of further information and argument on these issues.'

[67]It is alleged by Tullis that Amlazi is the sole supplier ofKenneglesser machinery in South Africaand that the installation ofthe three laundry lines entrenched Amlazi's right to the ensuingmaintenance contract.[35]While this may be true, the new equipment must be supported andmaintained under a comprehensive maintenance contract. The averagelifespan of some of the equipment may be twenty-five years, and theinitial maintenance agreement was for five years. To this end,theCourt below suspended its declaration of invalidity of the contractuntil the final conclusion of the procurement process thatwasremitted to the MEC "... in order to ensure the continuousprovision of service... ". A case is not made out to interferewith the remedy granted by the Court below. Litigation is atime-consuming process, especially when a matter is appealed, and theappeal stands to be decided upon the facts known to the court belowat the time.[36] This courtcannot decide on the issue of compensation or order an enquiry intoTullis' proclaimed losses under the current circumstances.This is amatter best left undecided for another court.

DIDTHE MEC PRE-EMPT THE APPEAL?

[68]Tullis' argument that the MEC pre-empted the appeal by readvertisingthe third line should bejudged against the contextual background tothe application. At the time of the award, the provincial healthsystem was in direneed of acquiring a modernised laundry system.This need was of even greater importance, given the ongoing COVIDpandemic at thetime. The MEC was, therefore, faced with theproverbial Hobson's choice. She had no real alternative but toreadvertise the thirdlaundry line. This in itself is not definitiveor a clear indication that the MEC does not take issue with thejudgment.

CONCLUSION

[69]The appeal lies against the order of the Court and not its reasons.For the reasons as set outaforesaid and, in particular, given theabsence of objective criteria against which functionality could bemeasured, the Court'sjudgment cannot be faulted. The appeal standsto be dismissed and costs on Scale C should follow the result. In thepremises Ipropose the following order:

1.The appeal is dismissed.

2.The appellant is ordered to pay the costs of the appeal on Scale C.

ppVAN DEN BERG AJ

Iagree

NZIWENIJ

Iagree

andit is so ordered

ERASMUSJ

Onbehalf of appellant AdvK Pillay SC

The State Attorney

Shakirah Chothia

4^thFloor, 22 Long Street

Cape Town

Ref: 1747/20/P5

Email:schothia@justice.gov.za

Email:alschreuder@justice.gov.za

Onbehalf of first respondentAdv V Maleka SC

Adv T Scott

Smit SewgoolamIncorporated

12 Avonwold Road, Cnr JanSmuts Avenue

Saxonwold, Johannesburg

Ref: OCJ/LB/MAT38961

Email:tiaan@smitsew.co.za

Email: lene@smitsew.co.za

C/o Macgregor StanfordKruger Inc

Per Karien Peens

Tel: (021) 421 3838

Level 5, Silo Square, V &A Waterfront

Cape Town

Ref: G Bossr/6

Onbehalf of second respondent Amlazi Equipment Service (Pty)Ltd

First Floor, The OfficeBlock 2

Berg Rivier Business Park

Driebergen Street,Daljosaphat

Paarl, Cape Town

Email: dwr@amalazi.co.za

Email:acc@albrechtmachinery.co.za

[1]Clause 1.12 of the General Contract Conditions (GCC) defines"functionality" as meaning ' ... the ability of a tendererto provide goods or service in accordance with specification as setouot in the tender documents'

[2]BAC approval of recommendation para 1.3 to 1.6, dated 19 November2020

[3]Emphasis added with reference to para [17] hereunder

[6]Section 1

[8][2016] ZAGPPHC 579 (21 June 2016)

[9]2011 (4) SA406 (KZP)

[10]2008 (6) 129 (CC)

[12]2013 (6) SA 356 (SCA)

[13][2021] JOL 52070 (KZD)

[14]Wattpower, ibid at [14] and [15]

[15]2023 JDR 4841 (GP)

[16]See paragraphs [15] and [17] above

[18]Unreported NCD judgment under Case No. 691/04, para 31 as referredto in Q Civils Pty Ltd v Mangaung Metropolitan MunicipalityandOthers (A48/2016)[2016] ZAFXHC 159 (8 September 2016) para 40

[19]Watt Power at [24]

[22]2014 (1) SA604 at 635 [87]

[24]SMEC at [91]

[26]Record, volume 10 of 19, pp 971 and further

[27]SMECebid at para [89]

[28]AllPay Consolidated v Chief Executive Officer, SASSA 2014 (1) SA 604 (CC) at[56]

[29]NorlandConstruction (Pty) Ltd v Chris Hani Development Agency (SOC) Limitedand another 2024JDR 0298 (ECMA) at [25] to [28]

[30]Loliwe CC trading as Vusumzi Environmental Services v City of CapeTown and others, case number 3791/2012

[31]Trencon Construction v Industrial Development Corporation 2015 (5)SA 245 (CC) at [51]

[32]Trenconebid at [52]

[33]Esorfranki Pipelines {Pty) Limited v Mopani District Municipality 2023 (2) SA 31 {CC) at [54] to [55]

[34]Allpay Consolidated v Chief Executive Officer SASSA 2014 (1) SA 604(CC)[96]

[35]Par 38 of the MEC's supplementary affidavit on pp 152 in theapplication to produce further evidence on appeal.

[36]Trencon Construction v Industrial Development Corporation 2015 (5)SA 245 (CC) [51] and [52