Setting aside a tender

In State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Ltd (CCT 254/16) 2017 ZACC 40, the Constitutional Court considered whether the Promotion of Administrative Justice Act 3 of 2000 (PAJA) applies when an organ of state wishes to have its own decision reviewed and set aside by a court.

SITA and Gijima Holdings entered into an agreement for the latter’s provision of IT services to the Department of Defence (DoD). A payment dispute arose and SITA applied to the High Court for the review and setting aside of the above agreement. The application was brought outside the 180-day period within which such an application must be brought under PAJA.

The High Court held that PAJA applied because the decision to enter into the agreement was an administrative action. It refused to condone SITA’s failure to have met the 180-day time limit. On appeal, the SCA agreed with the High Court.

In the Constitutional Court, it was held that PAJA does not apply when an organ of state seeks to have its own decision reviewed and set aside. Under such circumstances, an organ of state could not be a beneficiary of the right to just administrative action contained in section 33 of the Constitution. This is a right to be enjoyed by private persons only. The state is the bearer of the obligations created thereunder.

Furthermore, the Constitutional Court held that SITA’s award of the contract to Gijima Holdings contravened the provisions of section 217 of the Constitution. These stipulate the requirements for the lawful procurement of goods and services. Accordingly, the award of the contract was invalid.

By reason of the facts of the case, the Constitutional Court decided that, despite the invalidity of the award, it would not be just or equitable to divest Gijima Holdings of the rights that had accrued to the company. The appeal was upheld in part.