Challenge denied: SCA dismisses bidder's appeal over procurement ethics

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Aventino had scored the highest in technical and price evaluations, but the Department disqualified them. The reasons cited were allegations of fraud in a previous housing tender in Limpopo and their pending addition to the National Treasury’s restricted suppliers’ database.

Aventino initially approached the High Court to reverse the awards, but their application was dismissed. They then appealed to the Supreme Court of Appeal (SCA) arguing:

• The tender validity period had expired due to improper extensions, making the awards invalid.
• Their disqualification was unfair as they had not been formally found guilty of fraud, and the Treasury listing process had procedural flaws.

Legal issues addressed

The SCA focused on three key questions:

• Were the tenders invalid due to improper extensions of the bid validity period?
• Was Aventino’s exclusion from the process justified?
• If their exclusion was unjustified, what remedy should be applied?

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Key findings

1. Extension of tender validity period

The court determined that the validity period was lawfully extended. Aventino claimed that all bidders should have given consent for extensions, but the Department’s policy allowed the exclusion of bidders who failed to extend their bids on time. Since Aventino did not challenge the legality of this policy, and there was no evidence it was unlawful, the court upheld the extensions as valid.

2. Justification for disqualification

Aventino was disqualified not solely because of their pending listing on the restricted suppliers’ database but due to credible findings by the Special Investigating Unit (SIU).

The SIU’s investigation revealed misrepresentation by Aventino in a previous tender for housing in Limpopo. Although Aventino settled the matter without admitting fault, the Special Tribunal ordered the contract to be set aside and repayment to be made.

Based on these findings, the court held that the Department had the discretion to exclude Aventino to protect the integrity of its procurement process. The Department wasn’t required to wait for a formal conviction or final judgment to act on serious allegations of misconduct.

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Conclusion and impact

The SCA dismissed Aventino’s appeal and reinforced key principles:

• State entities can consider credible allegations of past misconduct when evaluating bidders, even without formal convictions.
• Bidders can be excluded if their conduct raises questions about the integrity of the procurement process.
• Tender validity periods can be extended as per procurement policies, even if not all bidders agree.

This ruling highlights the importance of maintaining trust and fairness in public procurement processes and confirms that bidders must meet ethical standards as well as technical criteria.