SKG Africa (Pty) Ltd v South African Local Government Association and Another

SALGA advertised a tender for office accommodation in East London subject to the PPPFA, the 2017 Preferential Procurement Regulations, and its Supply Chain Management Policy. SKG submitted multiple bids for two different premises (Waverley Office Park and Beacon Bay Crossing) after SALGA confirmed that different options and costs could be submitted if clearly distinguished. SALGA ultimately awarded the tender to Sthathu at a higher price. The Bid Evaluation Committee initially recommended cancellation due to vague specifications, but after referral back by the Bid Adjudication Committee, revised the functionality scores, disqualifying SKG. It emerged that SALGA evaluated only SKG’s Beacon Bay Crossing bids and failed to evaluate the Waverley Office Park bids. SKG sought review under PAJA, challenging the evaluation, adjudication, and award of the tender.

SALGA’s failure to evaluate and adjudicate SKG’s Waverley Office Park bids and its award of the tender to Sthathu were reviewed and set aside. The tender was ordered to be re-advertised and completed within six months. The setting aside of the award and lease was suspended pending the outcome of the new tender or the expiry of six months. Each party bore its own costs for the withdrawn urgent and interlocutory applications, while the respondents were ordered jointly and severally to pay SKG’s costs in the main application.

The case clarifies that multiple or alternative bids are not per se unlawful in South African procurement unless expressly prohibited, and underscores the obligation of organs of state to evaluate all responsive bids submitted. It reinforces the AllPay principle that procedural fairness and proper evaluation are central to lawful procurement, and demonstrates the courts’ willingness to craft suspended and pragmatic remedies to balance legality with fairness to innocent third parties.