ZAC loses big in P330m tender dispute
Baboki Kayawe | Friday February 3, 2017 16:18
ZAC, a company owned by prominent businessman, Nicholas Zakhem, filed an appeal last year after the High Court ruled against the company’s earlier application. The company had sought the High Court to review and set aside the PPADB’s decision not to award it the multi-million pula tender for the construction of infrastructure development in Metsimotlhabe Block 4.
PPADB had allegedly disqualified ZAC on the basis that its tender application did not meet the tender requirements contained in the Invitation To Tender (ITT) because it did not include a critical path.
Delivering judgement yesterday, Lord Arthur Hamilton said technically non-compliant bids as per the PPADB regulations, shall be eliminated from further evaluation.
He further argued that three sequential stages were involved in evaluating ‘Least Cost Selection Supplies and Works’ bids; to which ZAC bid for. These (stages) are; preliminary examination, technical evaluation, and cost evaluation.
“A technical evaluation shall be made to determine technical compliance with the specification or scope of works in the bidding documents, only for bids that have in terms of Paragraph 1 of stage one are qualified, and have been responsive,” he quoted the regulation. “Whether or not ZAC’s bid contained a programme which showed the critical path was an element of technical compliance/non-compliance, which had to be evaluated,” Hamilton said.
He added that ZAC’s argument to prove that its programme showed the critical path, while it may be ingenious; it was in his view unsound. “If hypothetically, a bidder proved on an objective basis that a rival bid, which was not technically compliant had not been eliminated, it might be that it was entitled to a remedy from court. That would be because the jurisdiction of the adjudicating body was restricted to allowing through to stage three only those bids which were technically compliant.”
Moreover, he said to fail to pass through to the third stage a bid, which is in fact compliant may be an error, but it is not a jurisdictional error within the first category.
“It may or may not fall within the second category but, in that case, the matter is to be determined by the adjudicating body’s subjective judgement, here, that of the Board,” he said. “It matters not whether one is concerned at the technical evaluation stage with one or several bidders. This argument must accordingly be rejected”. When the company presented the appeal, its lawyer, advocate John Peter insisted that ZAC’s tender programme contained a critical path.
He argued that the presence or absence of a critical path was a minor deviation, which could not disqualify ZAC from tbeing awarded the tender. Although he submitted that the exclusion of the original programme by ZAC was incorrect, Peter said that in itself is not determinative of the appeal, should ZAC’s contentions not be accepted. In addition, the counsel’s contention was that the evidence of the PPADB’s expert, who apparently recommended that ZAC should be disqualified, does not bear scrutiny and that it does not engage with or properly raise a dispute in respect of ZAC’s evidence. Peter noted that in preparation for its review of the PPADB decision in March 2015, ZAC consulted with three independent experts asking them to examine the programme of works submitted in the tender application and to provide their professional opinions on whether or not the critical path was present.
“All three experts came to the same conclusion that ZAC’s tender contained a critical path,” he stated.
He, however, regretted that the High Court had excluded the expert evidence on the basis that it was “impermissible to travel beyond” the original tender application to show that ZAC’s bid was compliant.
Peter, therefore submitted that the High Court erred in excluding the expert evidence, adding that the judgement should be set aside. He also sought an order directing the PPADB to award ZAC the tender.
Disputing the appeal, the PPADB, represented by senior counsel Bruce Burman, argued that the requirement for the critical path to be present in the ITT was material and not a minor deviation.
The case was presided by a panel of three CoA comprising of Justices Hamilton, Craig Howie and Aber Nes. ZAC Construction was represented by Peter and Kerensa Millard from South Africa together with Lore Morapedi Attorneys, while Burman, Monthe Marumo and Kgotso Botlhole represented PPADB.