Kunene Rampala Inc v North West Province Department of Education and Sport Development

The North West Province Department of Education and Sport Development awarded Kunene Rampala Inc (KR Inc), a firm of attorneys, a 12‑month service level agreement (SLA) in October 2015 following a competitive tender (EDU 04/15 NW) to provide evaluation, adjudication and supply chain management administrative services for Learner Teacher Support Material (LTSM), for a contract price of approximately R1.24 million. Three days after concluding the SLA, and before any work was performed, the parties concluded an addendum without any further procurement process. The addendum fundamentally altered the scope, duration and value of the contract by appointing KR Inc to provide and deliver stationery to distributors under a different tender (EDU 01/15 NW) for a period of three years, with fees amounting to 15% of the procurement budget, claimed to total approximately R46 million. The Department later cancelled the addendum, asserting it was invalid and unlawful for non‑compliance with constitutional and statutory procurement requirements. KR Inc sued for damages arising from the alleged repudiation of the addendum. The High Court dismissed the claim, holding the addendum invalid, and KR Inc appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the declaration that the addendum was unlawful and invalid was upheld.

The case reinforces the strict application of s 217 of the Constitution to public procurement, confirming that material amendments to state contracts that expand scope, duration or value require compliance with competitive tender processes. It affirms that contracts concluded in breach of procurement prescripts are invalid and unenforceable, and clarifies that organs of state may, where justice requires, raise the invalidity of such contracts as a collateral or reactive defence without instituting separate review proceedings.