Metro Projects CC and Another v Klerksdorp Local Municipality and Others

The appellants and several other entities tendered for the development of 1 333 residential stands in Jouberton Extension 10, within the jurisdiction of the Klerksdorp Local Municipality. Each tenderer was required to provide a price breakdown and specify the size of the top-structure (house) to be built on each stand using a provincial housing grant. The ninth respondent tendered a comparatively small house (30.2 m²). A senior municipal official, Mr Els, prepared a recommendation for the tender committees but omitted the tendered house size of the ninth respondent and misleadingly stated that it would be discussed with the community. After the close of tenders, Els presented alternative, larger house plans (34.3 m² and later 38 m²) to the mayoral committee without disclosing that these were not part of the original tender. On the basis of this incorrect and misleading information, the tender was awarded to the ninth respondent. The appellants sought review of the award.

The appeal was upheld with costs. The award of tender CCE9/2001 to the ninth respondent was set aside, and the municipality was ordered to pay the costs of the application.

The case is a leading authority on fairness in public procurement in South African law. It confirms that tender procedures constitute administrative action and must comply with constitutional and statutory requirements of fairness, transparency and competitiveness. The judgment underscores that post-tender negotiations or improvements that advantage one bidder, especially when concealed from decision-makers, invalidate the tender process.