Tender award: court orders reasons to be disclosed
A COMPANY has won a landmark judgment against the Western Cape provincial government to force it to reveal the reasons why a tender was awarded to an opposing firm.
Aquafund, which operates a number of water and sewerage projects on behalf of the government, was awarded the judgment last week on the basis of its constitutional right to administrative justice.
In terms of the ruling handed down in the Cape Town High Court, the provincial government will be obliged to hand over documents prepared by its consultants in which the various tenders for the management of the Zandvliet waste treatment works are evaluated. It has also been ordered to provide Aquafund with a copy of the contract concluded with the company that secured the tender.
Justice J Traverso ruled that possession of the documents was necessary in order for Aquafund to determine whether it had been fairly treated in the tendering process.
"If the applicant is entitled to lawful administrative action, it must, in my view, follow that it will be entitled to all such information as may be reasonably required by it to establish whether or not its right has been violated," he said.
Judge Traverso added in his judgment that state tender board regulations providing that the decisions of the board are final and binding did not diminish the right to administrative fairness.
Dave Saunders, Aquafund's managing director, said the court ruling opened a new chapter in tendering for government projects.
"Under the old dispensation you had no chance of getting access to information about tender board decisions. This will go a long way to achieving fair treatment from state bodies," he said.
Aquafund brought the action after it became concerned that certain material aspects had not been properly considered in the adjudication process.
Although Aquafund had operated the Zandvliet sewerage works from May 1989 to April 1994, the company lost the contract when it was again put out to tender in early 1994. Instead, the contract was awarded to Water Sanitation Services SA for a quote R2 000 a month below that proposed by Aquafund.
However, Aquafund already had equipment worth R750 000 on site as well as trained and experienced staff in place.
Saunders said it took four months for the provincial government to agree on the terms of the new contract, and questions had arisen as to whether there were hidden costs, such as staff or equipment, that had not been included in the winning tender.
A spokesman for Cape Province premier Hernus Kriel said the provincial government could not comment as it was appealing against the decision.