Cancellation of tender

In City of Tshwane v Nambiti Technologies (Pty) Ltd (20580/2014) 2015 ZASCA 167, the Supreme Court of Appeal dealt with the question of whether the decision of a public entity to cancel a tender could be challenged by way of judicial review.

The City advertised a tender for computer system support services. However, prior to the evaluation and adjudication of bids, the City reconsidered its needs and concluded that it no longer required the services. It was not desirable to have lengthy contracts in view of the rapidity with which technological change occurred; furthermore, the City wished to focus on building internal capacity. Consequently, the City decided to cancel the tender.

The cancellation of the tender was challenged by one of the bidders, Nambiti Technologies. The High Court granted an application brought by the bidder to set aside the cancellation and ordered the City to proceed with the tender.

On appeal, the SCA held that it was always open to a public entity to decide that it no longer wished to procure goods or services. The requirements of a public entity may change to warrant such a decision. Moreover, the SCA held that the decision by the City to cancel the tender was not administrative action and could not be taken on judicial review under the Promotion of Administrative Justice Act, 2000 (PAJA).

The appeal was upheld with costs.

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