In a significant decision concerning public procurement standards, the Supreme Court of Appeal (SCA) recently upheld the disqualification of Aventino Ecotroopers Joint Venture (Aventino) from two high-value road maintenance tenders awarded by the Gauteng Department of Roads and Transport. The case highlights the discretion afforded to government departments in excluding bidders whose conduct may compromise the integrity of procurement processes.
Background
Aventino submitted bids for two tenders (Tenders 19 and 21) issued by the Department and received the highest overall scores based on technical capability and price. Despite this, the Department disqualified Aventino, citing adverse findings in an unrelated housing contract awarded in Limpopo, as well as their pending inclusion on the National Treasury’s database of restricted suppliers.
Aventino sought judicial intervention in the High Court, challenging both the tender awards and their exclusion. After their application was dismissed, they escalated the matter to the Supreme Court of Appeal, raising two primary arguments:
- That the tenders were no longer valid due to improper or unauthorised extensions of the bid validity periods; and
- That their exclusion was procedurally and substantively unfair, particularly in light of the absence of a formal finding of guilt relating to the Limpopo matter.
Legal Questions Before the Court
The SCA was required to determine:
- Whether the extensions of the bid validity periods rendered the awards invalid;
- Whether the Department was legally justified in disqualifying Aventino from the tender process; and
- If the exclusion was improper, what remedy (if any) would be appropriate.
Court’s Findings
1. Validity of Extended Bid Periods
The Court found that the Department had lawfully extended the validity periods in accordance with its own procurement policy. Although Aventino argued that consent from all bidders was required for such extensions, the Department’s procedures expressly permitted the exclusion of bidders who failed to respond timeously to extension requests. Aventino did not dispute the legality of that policy, nor was there any basis for the Court to find it unlawful. As such, the SCA confirmed the tender validity periods were properly extended.
2. Grounds for Disqualification
The Court held that Aventino’s exclusion was not based solely on its pending listing as a restricted supplier but was instead informed by credible findings of serious misconduct arising from an investigation by the Special Investigating Unit (SIU).
The SIU had previously uncovered material misrepresentations by Aventino in a Limpopo housing tender. Although Aventino settled the matter without admitting liability, the Special Tribunal had ordered the contract be cancelled and the proceeds repaid. The Department, therefore, acted within its discretion in determining that allowing Aventino to continue in the current procurement process would undermine the principles of integrity and fairness.
Importantly, the Court held that a public entity is not required to wait for a criminal conviction or a formal blacklisting before acting on substantiated allegations of unethical conduct in public procurement.
Conclusion and Broader Implications
The SCA dismissed the appeal and reaffirmed several critical principles of procurement law in South Africa:
- Public entities may exclude bidders based on substantiated misconduct, even in the absence of a criminal conviction or final adjudication;
- Protecting the integrity of the procurement system is a legitimate and necessary ground for disqualification;
- Bid validity periods may be extended in accordance with procurement policies, provided such extensions are not arbitrary or unlawful.
This judgment reinforces the judiciary’s commitment to upholding transparent, ethical, and accountable procurement practices. Bidders are reminded that public sector tenders are not awarded solely on technical merit or price but also on the imperative to maintain public trust and adhere to high ethical standards.
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