In Maximum Profit Recovery (Pty) Ltd v Inxuba Yethemba Local Municipality and Others (1712/2020) [2021] ZAECGHC 11 (16 February 2021), the High Court dealt with a situation where a tender had not been opened in public.

The municipality advertised a tender for the provision of VAT recovery services, which it later awarded to PK Financial Consultants CC. An unhappy bidder, Maximum Profit Recovery (Pty) Ltd, challenged the award.

The company based its challenge on a number of arguments. One of these was that the tender process had been procedurally unfair because the bids were not opened in public. However, the municipality argued that it had been unable to do so as a result of the COVID-19 ‘hard lockdown’ and by reason that the municipality had been identified as a ‘hotspot’.

The High Court held that the disaster management regulations did not prevent the municipality from having opened the bids in public. This could have been done, provided that there was strict adherence to health protocols and social distancing measures.

The requirement that bids be opened in public is to ensure transparency. This allowed the public to know the identities of the bidders and the prices that they submitted, which in turn ensured a competitive and cost-effective tender process. it also allowed the public to satisfy itself that the process had been conducted fairly.

The municipality’s failure to open the bids in public rendered the process unlawful. The High Court granted the company’s application to challenge the award, with costs.