Sthathu Funding (Pty) Ltd v Amathole District Municipality and Others

The applicant, Sthathu Funding (Pty) Ltd, brought an urgent application to interdict the Amathole District Municipality from proceeding with a second tender for the lease of office accommodation, pending review proceedings. An initial tender closed on 12 June 2024, but the municipality did not evaluate the bids because they were non-responsive under the Preferential Procurement Policy Framework Act 5 of 2000 (PPPFA), as the bid values exceeded the stipulated preference point system. The municipality then advertised a second tender, substantially similar to the first, but expressly providing for either the 80/20 or 90/10 preference point system and allocating points for specific socio-economic goals (black youth, black women, people with disabilities, and military veterans). The applicant contended that the inclusion and weighting of these goals were irrational and amounted to a reviewable irregularity under the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

The urgent application for interim relief was dismissed, and the applicant was ordered to pay the first respondent’s costs on scale C.

The case reaffirms the broad discretion afforded to organs of state in designing and implementing preferential procurement policies under section 217 of the Constitution and the PPPFA. It underscores that courts will not lightly interfere with procurement processes through interim interdicts, especially where rational socio-economic objectives are pursued and separation of powers concerns arise.