Tender cancellation

In SAAB Grintek Defence (Pty) Ltd v South African Police Service and Others [2016] 3 All SA 669 (SCA), the Supreme Court of Appeal addressed the issue of whether a decision to cancel a tender amounted to administrative action under the Promotion of Administrative Justice Act 3 of 2000 (PAJA). If so then this would provide a basis upon which the decision could be reviewed and set aside.

The State Information Technology Agency (SITA) had previously invited bids, on behalf of the SAPS, for the provision of a mobile vehicle data command and control solution. SAAB submitted a bid and was shortlisted for selection, together with another bidder.

The Bid Evaluation Committee recommended that the tender be awarded to SAAB. The Recommendation Committee agreed and price negotiations with SAAB commenced soon afterwards, continuing for several months. After a period of quiet, SAAB was informed by the SAPS that the tender had been cancelled because of the time lapse in the evaluation process and because the tender no longer met SAPS’s business requirements.

The High Court dismissed SAAB’s application to review and set aside SAPS’s decision to cancel the tender. On appeal, the SCA held that the authority to control and manage the police service vests in the National Commissioner of Police. Such authority included the power to decide what was and what was not required for the efficient and effective performance of police functions. When the decision was taken to cancel the tender, this was done in the exercise of executive authority. It did not amount to administrative action. The decision could not be reviewed and set aside in terms of PAJA.

The appeal was dismissed with costs.