Government of the Republic of South Africa v Thabiso Chemicals (Pty) Ltd

The State Tender Board invited tenders for the supply of cleaning materials to government departments. Thabiso Chemicals (Pty) Ltd submitted a tender which was accepted, resulting in a contract governed by the State Tender Board Act regulations, the General Conditions (ST36), and special conditions. One special condition (para 7.3) required a tenderer that was neither a SABS-listed company nor a SABS permit holder to submit a recent SABS report. Thabiso did not submit such a report and was later found not to have been SABS-listed or a permit holder at the closing date. After performance had commenced, the Tender Board cancelled the contract, initially relying on non-compliance with para 7.3. Thabiso treated the cancellation as repudiation and sued the Government for damages. The High Court held the cancellation wrongful, but the Government appealed.

The appeal was upheld with costs. The High Court order was set aside and replaced with an order dismissing Thabiso’s claim with costs. Thabiso’s condonation application for late filing of heads of argument was dismissed with costs, and its attorneys were barred from recovering fees relating to that application.

The case clarifies that, after the award of a tender, the relationship between the State and a contractor is governed by contract law rather than administrative law. It confirms that implied misrepresentations by conduct can constitute the furnishing of incorrect information justifying contractual cancellation under tender conditions and regulations.