Worse than losing a government tender : winning it

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Juta Law
In Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 3 SA 121 (CC) the Constitutional Court held that an organ of state was not liable in delict for a successful tenderer's out-of-pocket losses following the setting aside of the tender because of a bona fide error on the part of that organ of state in the tender process. The Court ruled that the organ of state's negligent but bona fide conduct in the public tender process was not wrongful since it owed no legal duty to tenderers, whether successful or unsuccessful, to avoid such losses and that there were no public policy considerations that justified the recognition of such a duty. From a public procurement perspective, this judgment is unfortunate. Moseneke DCJ's majority judgment is based on a number of highly contestable assumptions and holds implications for public procurement that may largely undermine the very public policy considerations upon which it is based. The dissenting minority judgment of Langa CJ and O'Regan J is to be preferred, because it is not only much more sensitive to the general realities of public procurement, but specifically the realities of South African public procurement. However, the problem raised by the Steenkamp matter, judged from a public procurement perspective, is not one of delictual liability but rather the hitherto fairly unsophisticated approach to remedies following the judicial review of public tender decisions in South Africa. In order to overcome the problems illustrated by the Steenkamp case, we should focus our attention on the development of appropriate judicial review remedies within the public procurement context. The recent judgment of the Supreme Court of Appeal in Millennium Waste Management v Chairperson Tender Board 2007 JOL 21170 (SCA) provides a solid point of departure for such a development.
CITATION: Quinot, G. 2008. Worse than losing a government tender : winning it. Stellenbosch Law Review, 19(1):101-120.
The original publication is available at http://reference.sabinet.co.za/sa_epublication/ju_slr
Government tenders -- South Africa, Administrative law -- South Africa, South Africa -- Promotion of Administrative Justice Act, 2000, South Africa -- State Tender Board
Quinot, G. 2008. Worse than losing a government tender : winning it. Stellenbosch Law Review, 19(1):101-120.