Sithathu Funding (Pty) Ltd v The Road Accident Fund and Others

The Road Accident Fund (RAF) invited bids for the provision of rented office space for its East London Regional Office for a five-year period under tender number RAF/2021/00003. Sithathu Funding (Pty) Ltd (the applicant), along with other bidders including SKG Afrika (Pty) Ltd (the second respondent), submitted bids. The applicant submitted the lowest-priced bid and was initially found compliant during the initial screening, mandatory, and technical evaluation phases. A site inspection was conducted thereafter. Following the site visit, the RAF disqualified the applicant’s bid on the basis that it failed to comply with certain mandatory requirements, particularly regarding the size and nature of goods and passenger lifts, as well as other site requirements. The tender was ultimately awarded to the second respondent. The applicant sought to review and set aside the disqualification and award under the Promotion of Administrative Justice Act 3 of 2000 (PAJA), arguing that its bid was compliant and that the RAF acted unfairly, irrationally, and unlawfully.

The application for review was dismissed. The applicant was ordered to pay the costs of the first and second respondents on Scale C, including the costs of two counsel where employed.

The case reinforces the principle that compliance with mandatory tender requirements is a jurisdictional prerequisite in public procurement and that failure to meet such requirements justifies disqualification regardless of price or B-BBEE scoring. It affirms the discretion of organs of state to define and enforce peremptory tender conditions and underscores judicial deference where procurement decisions are rational, lawful, and consistent with section 217 of the Constitution.