On 16 January the North Gauteng High Court handed down judgement in SAAB Grintek Defence (Pty) Ltd v South African Police Service, State Information Technology Agency and Others which confirmed an earlier High Court ruling that public bodies must adhere to the time periods stated in a tender bid document and that any action taken in terms of a bid after the expiry of the validity period is not valid between the parties.

Summary of the facts

In the SAAB Grintek case, the second respondent, the State Information Technology Agency (“SITA”), published a request for bids (“RFB”) on behalf of the first respondent, the South African Police Service (“SAPS”) in respect of the procurement of Integrated Mobile Vehicle Data Command and Control Solution. In terms of the RFB, the bid validity period was 90 days starting from the closing date for the tender, being 4 October 2010.

SAAB Grintek Defence (Pty) Ltd (“SAAB”) submitted a bid and was shortlisted as a potential supplier of the tender.

On 2 February 2011, SITA advised SAAB that the validity of its bid had expired on 4 January 2011 and requested that SAAB extend the validity of its bid by 90 days to which SAAB agreed. SITA subsequently requested further extensions of the bid from SAAB, which SAAB granted. The Technical Evaluation Team and the Recommendation Committee recommended that the tender be awarded to SAAB.

However, on 8 August 2012 the SAPS informed SAAB that it had cancelled the tender in a letter addressed to SITA on 28 May 2012.

SAAB sought an order against the respondents to review and set aside the decision of the SAPS to cancel the tender and to review and set aside the decision of SITA not to award the tender to SAAB.

The respondents argued that the bid expired 90 days after the submission closing date, unless it was timeously extended by agreement. The first extension only came 30 days after the bid had expired and, due to the fact that the RFB did not provide for the revival of an expired bid, everything that had transpired after 4 January 2011 was ultra vires in view of the fact that there was no valid bid.

The question that arose was whether the expiry of the tender validity period had put an end to the tender process, and whether it could subsequently be revived by agreement between the parties.

High Court Ruling

Relying on the judgment of Telkom SA Limited v Merid Training (Pty) Ltd and Others, Bihati Solutions (Pty) Ltd v Telkom SA Limited and Others [2011] JOL 26617 (GNP) the court held that once the bid validity period had expired, the tender process had been completed, albeit unsuccessfully.

The court found that since the RFB did not provide any basis for bids to be revived once they had expired and did not provide for extensions to be granted retrospectively once the validity period of the bid had expired, and no extension had taken place before its expiry there was no valid bid in existence and an award could not be made. Because SAPS and SITA are organs of State it is required in terms of section 217 of the Constitution, when they contract for goods and services, to do so in accordance with a system that is “fair, equitable, transparent, competitive and cost effective”. These core principles of public procurement are given effect by a range of statutes, such as the Preferential Procurement Policy Framework Act 5 of 2000 (“PPPFA”) and the Public Finance Management Act 1 of 1999. The PPPFA defines an “acceptable tender” as any tender which in all respects, complies with the specification and conditions of tender as set out in the tender document. Once the tender/bid had expired, the bid is no longer an “acceptable tender” and cannot be resuscitated after expiry.

The application by SAAB was therefore dismissed with costs.