In a March 2025 judgment, the Supreme Court of Appeal held that a state entity is entitled to exclude a bidder from consideration for a tender based on credible allegations and evidence of fraud; and that an extended public procurement process may proceed with only those bidders who consented to the extensions if the terms governing the tender allow for it.
The matter arose from two tenders advertised by a provincial department for routine road maintenance. A joint venture (JV) had submitted bids for the tenders and was initially the highest scoring bidder for both tenders. However, the department later disqualified the JV due to alleged misrepresentations made by the JV in a previous bid for a different tender.
The department had sought several extensions of the bid validity periods as its evaluation processes continued. Not all of the bidders consented to the extensions and the department proceeded with only those who consented, which included the JV.
The JV challenged the department’s decision to award the tenders to other bidders, arguing that the department unlawfully:
- excluded the JV’s bids from consideration; and
- extended the bid validity periods, and accordingly the tenders had lapsed.
The court observed that the fraud allegations against the JV arose from separate civil recovery proceedings instituted by the Special Investigating Unit (SIU) following an investigation, which eventually led to a settlement agreement in terms of which the JV agreed to the setting aside of the contract in question and repayment of the monies earned by the JV under that contract. The court held that once the JV was implicated in the SIU’s “serious and troubling” evidence of fraud, and with no clear exculpatory evidence to the contrary, the department’s decision to exclude the JV from consideration was entirely reasonable, despite the absence of a formal court ruling on the JV’s culpability.
Regarding the extension of the bid validity periods, the court examined the department’s supply chain management policy (SCMP) which explicitly:
- allowed the department to request extensions from bidders; and
- stated that bidders who did not agree to extend, or who failed to respond, would be regarded as non-responsive and excluded from further assessment.
The court held that this “exclusionary stipulation” permitted the department to proceed with only those bidders who agreed to the extensions, and to exclude the rest, which is exactly what the department did. The JV did not challenge the legality of the exclusionary stipulation.
On that basis, the court dismissed the JV’s appeal with costs, confirming that the department had lawfully excluded the JV’s bids from consideration and had lawfully extended the bid validity periods.
Previous judgments have suggested that a bid validity period may generally only be extended if all the bidders consented to an extension. This judgment illustrates that the terms governing a tender, including the state entity’s SCMP, may allow for a deviation from that general position. An aggrieved bidder should challenge the legality of those terms if it believes that the deviation compromises the fairness and transparency of the procurement process.