Minister of Social Development v Phoenix Cash & Carry [2007] SCA 26 (RSA)

Posted 19 August 2009

In this appeal from an order by the Court a quo setting aside a tender awarded for delivery of food parcels to the poor and ordering the appellants to invite fresh tenders should they wish to proceed with the project, the court examined the principles governing tenders.  The court noted that awards of public tenders are notoriously subject to influence and manipulation. However all aspects of the process should be in accordance with s 217(1) of the Constitution which requires an organ of state to contract for goods and services ‘in accordance with a system which is fair, equitable, transparent and cost-effective’. The court held that this meant: that a tender process which was dependent on uncertain criteria as in the present case, was opposed to fairness amongst tenderers; that a process that laid undue emphasis on form at the expense of substance facilitated corrupt practice and was inimical to fairness, competitiveness and cost-effectiveness; and, that the public interest is best served by selecting the tenderer who is best qualified by price. In the result, the appeal was dismissed.