The Chairperson: Standing Tender Committee and Others v JFE Sapela Electronics (Pty) Ltd and Others

The Department of Public Works (DPW), acting through its Standing Tender Committee, awarded three tenders for repair and maintenance work at Drakenstein, Worcester and Helderstroom prisons to Nolitha Electrical and Construction (Pty) Ltd. Competing tenderers, JFE Sapela Electronics (Pty) Ltd and JFE Power Distribution (Pty) Ltd (trading as JFE Reticulation), unsuccessfully tendered for these contracts and challenged the awards. In the Drakenstein and Worcester tenders, Nolitha quoted nominal and abnormally low prices for substantial sections of the work, based on its knowledge that overlapping regional DPW contracts would render those sections unnecessary. These overlaps were unknown to the Standing Tender Committee. In the Helderstroom tender, Nolitha made significant pricing errors, which were later effectively corrected after the closing date through engagement with the consulting engineer, resulting in a materially altered tender. The Cape High Court set aside the awards as invalid. The appellants appealed to the Supreme Court of Appeal.

The appeal succeeded to the extent that, despite finding the tender awards invalid, the Supreme Court of Appeal declined to grant substantive relief setting aside the contracts due to the effluxion of time and practical considerations. The appellants were ordered to pay the respondents’ costs.

This case is a leading authority on public procurement in South Africa, clarifying the meaning of an 'acceptable tender' under the Preferential Procurement Policy Framework Act and reinforcing that compliance must be assessed against the constitutional values in section 217. It affirms that tenderers may not price on the assumption that specified work will not be required and that post-closing modification of tenders undermines fairness. The judgment also illustrates the court’s remedial discretion in procurement reviews where invalidity is established but effective relief is impractical.