The Industrial Development Corporation of South Africa Limited v Trencon Construction (Pty) Limited and Another

The Industrial Development Corporation (IDC), an organ of state, invited tenders for an external upgrade of its head office. The tender process occurred in two phases, culminating in evaluation based on price and preference points. Trencon Construction submitted the lowest-priced bid and scored the highest points overall. Basil Read submitted its initial prequalification proposal 14 minutes late, which IDC condoned. During the evaluation, Trencon indicated that its price would remain fixed provided site handover occurred on the scheduled date, but that a delay would attract escalation costs. IDC’s Executive Committee (Exco), relying on a legal opinion, concluded that Trencon’s bid was not firm and fixed for the required 120-day validity period, declared it non-responsive, and awarded the tender to Basil Read. Trencon successfully reviewed this decision in the High Court, which set it aside and substituted it with an order awarding the tender to Trencon. IDC appealed to the Supreme Court of Appeal (SCA).

The appeal was upheld in part. The High Court’s substitution order was set aside. IDC’s decision declaring Trencon’s bid non-responsive and awarding the tender to Basil Read was reviewed and set aside, and the matter was remitted to IDC’s Executive Management Committee for reconsideration in terms of s 8(1)(c)(i) of PAJA. Each party was ordered to pay its own costs.

This case is a leading authority on remedies in administrative law, particularly in public procurement disputes. It clarifies that substitution under s 8 of PAJA is an extraordinary remedy reserved for exceptional circumstances, reinforces judicial deference and separation of powers, and confirms that remittal is generally the prudent course where an administrator retains discretion.