CHALLENGE TO PROCUREMENT PROCEEDINGS
Who should lodge a challenge?
In terms of Section 73 (1) of the Act, a potential or actual bidder in procurement proceedings who claims to have suffered, or to be likely to suffer, loss or injury due to a breach of a duty imposed on a procuring entity by or under the Act, may challenge the procurement proceedings by lodging a written notice with the procuring entity in accordance with this section.
In terms of Section 73 (2), where notice of the award of a contract has not yet been issued, a challenge may be lodged at any stage of the procurement proceedings up to the date on which such notice is issued, provided that, where the grounds of a challenge concern alleged improprieties in the invitations to bid or to pre-qualify which have become apparent before bids were opened, the challenge shall be lodged prior to bid opening.
In terms of Section 73 (3), where notice of the award of a contract has been issued, a challenge may be lodged only within fourteen(14) days in terms of Sections 55(2) or 60(14).
When can a challenge be entertained?
In terms of Section 73 (4) a challenge shall not be entertained unless.
- in the written notice the bidder has identified the specific act or omission alleged to constitute a breach of duty on the part of the procuring entity; and
- When lodging the written notice, the bidder deposits with the procuring entity a sum of money in the prescribed amount by way of security for costs.
In terms of Section 73 (5), a procuring entity may concede that it breached a duty as alleged in the challenge, whereby it shall within five (5) days—
- notify the bidder concerned and the Authority of its concession; and
- take whatever steps it considers necessary, or as the Authority may direct, to rectify the breach.
Application for review of procurement proceedings by review panel
In terms of Section 74 of the Act, the bidder may within five (5) days after lodging the challenge apply in writing to the Authority for the procurement proceedings concerned to be reviewed by a review panel. This is done where:-
- a procuring entity has not conceded that it breached a duty as alleged in a challenge; or
- the bidder who lodged the challenge is dissatisfied with any steps taken or to be taken in terms of section 73(5)(b) to rectify the breach alleged in a challenge;
The Review Panel shall dismiss the challenge where the bidder failed to establish good grounds of his challenge or the challenge may not comply with Act. Under such condition the review panel may order the bidder to compensate the procuring entity for any expenses or damages resulting from the challenge.
Where the review panel finds that the bidder has valid grounds for the challenge, the panel may as appropriate:-
- prohibit the procuring entity from reaching any decision following incorrect procedure; or
- annul in whole or in part any unauthorized act or decision of the procuring entity, other than an act or decision bringing the procurement contract into force; or
- order the procuring entity to begin the procurement proceedings afresh; or
- Award damages to the bidder to compensate for any loss he or she has suffered.
Enforcement of the Review Panel’s decision
In terms of Section 74(6), where a review panel orders compensation to be paid to a procuring entity in terms of subsection (4) or damages to be paid to a bidder in terms of subsection (5), the procuring entity or the bidder, as the case may be, may register a copy of the panel’s award, certified by the chairperson of the panel, with the clerk of the magistrates court for the province in which the panel conducted its hearing, whereupon the award may be enforced as if it were a judgment of a magistrate of that court.
Nature of challenges
- Challenges on the Commercial Requirements of the Tender.
- Challenges on the Technical Requirements/specifications of the Tender
- Challenges on the Tender process and procedure
Effects of challenges in a Procurement Process
- Amending of RFP – a challenge of clarification has the effect of amending the RFP e.g. were the specification favor a brand the bidders may raise a query to have the specification amended to neutral.
- Clarification of Requirements – a challenge can assist in understanding the tender requirements in a tender process
Appeal to Administrative Court
In terms section 77 of the Act:-
- A bidder or a procuring entity aggrieved by a decision of a review panel may appeal against the decision to the Administrative Court within twenty days (20) after the panel’s decision was notified to the party concerned.
- In an appeal the Administrative Court shall not set aside the decision of the review panel but may award fair and adequate compensation to the appellant for any patrimonial loss or damage the appellant may have suffered.