City of Ekurhuleni Metropolitan Municipality v Takubiza Trading & Projects CC and Others

In March 2020, the City of Ekurhuleni Metropolitan Municipality published an invitation to tender (PS-F07-2020) for the appointment of finance meter management consultants for a 36-month period valued at approximately R117 million. The tender closing date was initially 24 April 2020 but was extended to 11 June 2020 due to COVID-19 lockdown. The bid validity period was 120 days from the closing date, expiring on 9 October 2020. On 9 October 2020 at 11h47, the Municipality sent an email to all 24 bidders requesting an extension of the validity period until 31 December 2020, with confirmation required by 9 October 2020. Due to a typographical error in the email address, the notification to Aurecon (second respondent) was only sent at 15h32 on 9 October 2020, and Aurecon only confirmed its agreement to the extension on 12 October 2020 at 16h43. On 19 November 2020, the BEC recommended, and on 23 November 2020 the BAC accepted, the award of the tender to Aurecon and Ntiyiso (third respondent) for different areas. On 24 November 2020, the City Manager approved the awards. On 17 December 2020, Aurecon and Ntiyiso were informed of their appointments. Takubiza (first respondent), an unsuccessful bidder, launched an urgent review application in the High Court challenging the awards.

• Whether a tender can be lawfully awarded after the tender validity period has expired
• Whether steps taken to extend a tender validity period on the last day of that period, where confirmation is only received after expiry, can validate the tender process
• What are the legal consequences when a public body fails to accept tender proposals within the stipulated validity period
• Whether the tender process can be resuscitated after the validity period has expired by obtaining retrospective consent from bidders

The appeal was dismissed with costs. The appellant's Johannesburg and Bloemfontein attorneys were not entitled to recover any of the costs associated with the preparation, perusal or copying of the record from the appellant. The high court's order setting aside the awards to Aurecon and Ntiyiso was upheld, with the declaration of invalidity suspended for 150 days to enable the Municipality to commence a new tender process.

Once a tender validity period has expired without acceptance of any proposals and without a proper extension being concluded before expiry, the tender process is completed, albeit unsuccessfully. There are no valid bids remaining that can be accepted. A public body has no power to award a tender once the bid validity period has expired and cannot extend the period retrospectively. To extend the tender validity period, the consent of all participants must be obtained prior to the expiry of the tender. A notification requesting extension sent on the last day of the validity period, where confirmation is only received after the period has expired, does not constitute a valid extension. Confirmation received after expiry cannot retrospectively validate the process. The tender validity period is a fundamental term of the tender process requiring strict compliance to ensure fairness, transparency, equity and competitiveness as required by section 217 of the Constitution.

The court observed that it was inexplicable why notification of the extension request was despatched only on the very last day of the tender validity period, suggesting this was poor administrative practice. The court commented that tender processes cannot be open-ended and that certainty must be the touchstone. The court posed rhetorical questions about what the status of a tender would be in the period between expiry and late confirmation, highlighting the logical difficulties with the Municipality's argument. The court noted that the registrar would have been entitled to reject the deficient record and that striking the matter from the roll may not have been unwarranted. The court expressed that it would not be right for the residents of the Municipality to be burdened with costs that should not have been incurred in the preparation, perusal and copying of an unnecessarily voluminous and poorly prepared record.

This case consolidates and affirms the principle established in Telkom SA v Merid Training and Joubert Galpin Searle Inc v Road Accident Fund that once a tender validity period has expired without an award being made, the tender process is completed, albeit unsuccessfully, and cannot be resuscitated by retrospective agreements with bidders. The judgment emphasizes the importance of certainty in procurement processes and strict compliance with constitutional requirements under section 217 of the Constitution for fair, equitable, transparent, competitive and cost-effective procurement. It clarifies that attempts to extend tender validity periods must be completed (including receiving confirmation from all bidders) before the expiry date. The judgment also provides important guidance on the preparation of court records and reinforces the court's willingness to impose cost sanctions on attorneys who prepare deficient records, protecting clients (particularly municipalities and public bodies) from unnecessary costs.