The treatment of non-responsive bids in South African public procurement law

Abstract

Non-compliance with bid requirements raises two interrelated questions. First, when is a deviation from a bid requirement legally significant? Secondly, under which circumstances, if any, are procuring authorities permitted to overlook (condone) non-compliance? Our courts have been inconsistent in their approach to both questions. One line of cases appears to hold bidders to unfaltering compliance with bid requirements. This approach draws a link between compliance and the attainment of important public-interest objectives such as integrity and the equal treatment of bidders. From this non-instrumental perspective, compliance is seen as having intrinsic value and should thus be upheld for its own sake. Another line of cases places the emphasis on other public-interest objectives, such as value for money and economic and operational efficiency. It calls into question the wisdom of disqualifying meritorious but non-compliant bids when this yields economically inefficient outcomes, particularly in instances involving relatively minor breaches. This approach is instrumental in nature, in that it draws a link between compliance and best economic outcomes. Our courts are also divided on the question of condonation. The dominant view currently is that procuring entities have no authority to condone non-compliance in the absence of an express provision permitting them to do so. The only exception permitted is if the bid requirement in question is immaterial, unreasonable or unconstitutional. Other rulings have adopted a broader, more generous approach to condonation. The problem of deviation cannot be resolved simply by categorizing the deviation in question as either ‘major’ or ‘minor’. The argument put forward in this thesis is that the principles of purposiveness and proportionality offer the best analytical tools to reach a balanced decision on the legal effect of a deviation. A proper understanding is required of when a deviation from a prescribed standard is material. This can best be achieved by examining materiality through the lens of purposiveness. The principle of proportionality, on the other hand, requires a balancing of important public-interest considerations. In this balancing exercise due weight must be placed on compliance, given its importance in achieving a fair tender process. But instances may arise when the disqualification of a bidder would be disproportionate, given the nature of the breach and the loss to the public purse if a compliant but inefficient bid were to be chosen above a non-compliant but technically superior bid. Proportionality requires that the issue of bid responsiveness be approached in a thoughtful and reflective manner, and not in a pedantic, legalistic fashion. In certain instances, a proportional response may require that the non-compliance be condoned. Compliance and optimality are both key to an efficient procurement process, and both principles should as far as possible be vindicated during the process of judicial review.