The complex public procurement system in South Africa has been fertile ground for litigation over many years, and to say that law reports are replete with cases dealing with public procurement would be an understatement. Litigation in this context almost invariably brings significant delays in public procurement. Those delays cost money and cause much frustration and inefficiency within public procurement, and are a significant contributor to the lack of service delivery. The unnecessary complexity in the public procurement regulatory framework often results in confusion that invariably leads to disputes.
Currently, there is no central administrative body in South Africa tasked with the enforcement of public procurement rules. Enforcement is done through a combination of legal mechanisms dispersed throughout the administration and remedies enforced in the ordinary courts. The Procurement Bill makes provision for a dispute resolution mechanism with the establishment of the Public Procurement Tribunal (Tribunal). The Tribunal is tasked with reviewing decisions taken by the procuring institutions, including decisions to debar a bidder or supplier.
Reconsideration
A bidder who is not satisfied with the procuring institution’s decision to award a bid can apply for reconsideration from the same institution. The Tribunal or a court may not review a decision to award a bid unless the bidder has exhausted this internal remedy. The Tribunal or court must, if it is not satisfied that the internal remedy has been exhausted, direct the bidder concerned to first exhaust such remedy before instituting proceedings with the Tribunal for review or a court for judicial review.
There is, however, an exception that in exceptional circumstances and on application by the bidder concerned, such a bidder may be exempt from the obligation to exhaust the internal remedy if the Tribunal or the court considers it to
be in the interests of justice. These exceptional circumstances are not set out in the Procurement Bill and will no doubt be developed by the Tribunal and courts in due course.
Review
If a bidder is not satisfied with a reconsideration decision made by a procuring institution, the bidder may, within 10 days of being informed of the procuring institution’s decision, apply for review to the Tribunal. A bidder may, however, request that the Tribunal consider an application for review filed after the expiry of the period, but not later than 15 days after being informed of the procuring institution’s decision, on the ground that the application raises public interest considerations.
Similarly, a person debarred may, within 10 days of being informed of the decision to debar, apply for review to the Tribunal. A bidder may request that the Tribunal consider an application for review filed after the expiry of the period, but not later than 15 days after being informed of the procuring institution’s decision, on the ground that the application raises public interest considerations.
Interestingly, the Tribunal’s hearings must be conducted in public; however, the chairperson may direct that a person be excluded from a hearing on any ground on which it would be proper to exclude a person from civil proceedings before the High Court. The chairperson of the panel also has the power to subpoena a specific person to appear before the panel in order to give evidence and to administer an oath or accept affirmation from the person called to give evidence. A person giving evidence or information, or producing documents, has the protections and liabilities of a witness giving evidence in civil proceedings before the High Court.
Some of the notable orders that the Tribunal may grant are to:
- i) confirm a decision made by the procuring institution;
- ii) set aside a decision made by the procuring institution and refer the matter back to the relevant procuring institution for further consideration;
iii) direct a procuring institution not to make an award or cancel an award made for the procurement under review; or
- iv) direct that the procurement proceedings be terminated.
In respect of review proceedings of a decision to debar, a panel may give an order:
- i) confirming the debarment order of the procuring institution;
- ii) substitute the debarment order for its own order;
iii) set aside the debarment order of the procuring institution; or
- iv) dismiss the application.
In addition to the orders that the Tribunal may grant, it may, in exceptional circumstances, make an order that a party to the proceedings on an application for review of a decision pay some or all of the costs reasonably and properly incurred by the other party in connection with the proceedings. The Tribunal may further, by order, summarily dismiss an application for review of a decision if the application is frivolous, vexatious or trivial.
Any party that is dissatisfied with an order of the Tribunal may institute proceedings for judicial review in the High Court.
Standstill
One of the notable provisions contained in the Procurement Bill is the introduction of a standstill process which prohibits procuring institutions from concluding contracts during reconsideration or review proceedings. These provisions provide that if a procurement process is subject to reconsideration, a procuring institution may not conclude a contract with the successful bidder within 10 days after the completion of the reconsideration or review process; or if a procurement process is subject to review by the Tribunal, a procuring institution may not conclude a contract with a successful bidder prior to the completion of the review process. There is a carve-out for emergency procurement during this period, if justified.
Conclusion
The impact of the establishment of the Tribunal and the standstill provisions will need to be closely monitored in practice as they can either lengthen the already somewhat elongated procurement process or shorten it considerably. As can be seen, these provisions have the potential to contribute to further delays in public procurement, as they have added an additional layer to an already complex system. It is also possible to see a proliferation of reconsiderations and reviews before the Tribunal which may give raise to an abuse of process. It may, however, be argued that the provisions empowering the Tribunal to issue costs orders reasonably incurred by the other party in exceptional circumstances in connection with the review proceedings are meant to safeguard that concern.
Even though the Procurement Bill grants the Tribunal far-reaching powers – including orders directing a procuring institution not to make an award, cancelling an award made for the procurement under review, directing that the procurement proceedings be terminated and requiring the payment of compensation for any reasonable costs incurred by the bidder submitting an application as a result of an act or decision of, or procedure followed by the procuring institution – the standard of review has not been specified. Would this entail a review in terms of the Promotion of Administrative Justice Act 3 of 2000 or under the rubric of legality? In addition, it has long been established under South African jurisprudence that the courts alone are the arbiters of legality. Would it perhaps have been better for the Tribunal to rather exercise appellate jurisdiction?
A further concern is that, notwithstanding that review proceedings must be conducted expeditiously, the Procurement Bill does not expressly stipulate a time period for when the review proceedings should be finalised and a decision or outcome of the review to be rendered from the inception of the review proceedings. There is also a concern that the absence of an express timeline for the finalisation of the review proceedings could lead to further delays in the finalisation of the review proceedings; but only time will tell.
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