CC Groenewald NO and Others v M5 Developments (Cape) (Pty) Ltd

The Overstrand Municipality invited tenders for the appointment of an implementation agent for low-cost housing projects. Sixteen tenders were received, of which five were acceptable. After evaluation under the Preferential Procurement Policy Framework Act scoring system, consulting engineers and the municipal tender committees recommended that M5 Developments (Cape) (Pty) Ltd be awarded the tender, which decision was accepted and communicated. Two unsuccessful tenderers, Blue Whale Property CC and ASLA Devco (Pty) Ltd, attempted to appeal under s 62 of the Local Government: Municipal Systems Act 32 of 2000, but only Blue Whale lodged its appeal timeously. Despite concluding that Blue Whale’s appeal lacked merit and that ASLA’s appeal was out of time, the acting municipal manager, CC Groenewald, reassessed the scoring, concluded that ASLA should have scored marginally higher, and awarded the tender to ASLA. M5 successfully reviewed this decision in the Western Cape High Court, leading to an appeal to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel, and the High Court order setting aside the award to ASLA and recognising M5’s entitlement to contract with the municipality was upheld.

The case clarifies the scope of appeals under s 62 of the Municipal Systems Act in municipal procurement matters. It establishes that while unsuccessful tenderers may appeal, an appeal authority may not use the process to re-evaluate all tenders or award a contract to a non-appealing tenderer, thereby reinforcing certainty, finality, and legality in municipal tender processes.