If tender documents impose an obligation on a bidding party to disclose that it has the necessary financial resources to execute a project, the failure by the bidder to disclose that it was placed under business rescue after the bid was submitted but before the contract was awarded, resulted in the successful award of the tender to that bidder being set aside.
In Umoso Construction v MEC for Road and Public Works Eastern Cape Province, a tender was awarded to Tau Pele Construction. After it had responded to the tender, Tau Pele had been placed in business rescue on 17 September 2012. It remained in business rescue until 21 May 2013. On 21 May 2013 the adjudication of the tender was completed and the tender was awarded to Tau Pele. On application by Umoso, one of the unsuccessful tenderers, the Court concluded that Tau Pele had a duty to disclose either at the time of the bid that it was in financial distress or at the latest when it entered business rescue. Consequently the award to Tau Pele was set aside and the Court ordered that the tender be awarded to Umoso.