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Bongani Mdakane | 10 September 2023

Multinational construction group SMEC this week went to the Johannesburg High Court to interdict the South African National Road Agency (Sanral).

The interdict is aimed at stopping Sanral from proceeding with and or implementing the outcome of the tender adjudication process. This relates to the tender invitations contained in SMEC’s papers, pending a review application launched in Gqeberha High Court.

Sanral’s decision to implement a new scoring system in awarding tenders is challenged. The construction company has taken umbrage with the new scoring system introduced by Sanral in awarding new and existing tenders, saying it disadvantaged some companies.

Sanral, which is responsible for the road infrastructure in the country, has introduced a new Preferential Procurement Policy, which includes a new scoring system.

The new scoring system was revealed in May, when the new policy was uploaded to the Sanral website. SMEC said the new scoring system was introduced through an addendum to all tender invitations then pending and all the new tender invitations.

Before introducing this system, a company’s B-BBEE level could account for 0 – 10 or 0 – 20 of the points, depending on its B-BBEE level. With the new system, a B-BBEE level, regardless of the level, now only accounts for a maximum of one or two points, depending on the contract size. Added to that is the possibility of another five points (if the maximum is 10) based on being wholly black-owned and four points (if the maximum is 10) if targeted enterprises are subcontracted.

SMEC, bidding for work in the Eastern Cape, said in its court documents, the new system renders the Broad-Based Black Economic Empowerment Act a nullity. The company also says all the money companies spent to obtain a high B-BBEE score would now mean nothing if the new scoring system is allowed to stand.

In its response, Sanral denied SMEC was precluded. The state-owned entity said that no pre-qualification criterion prevents a bidder from submitting the relevant bid.

Sanral said if SMEC wants to improve its score in the black ownership category, it can make use of subcontractors from targeted enterprises to better the score.

The rest of the 90 out of the 100 points relate to pricing, and this might well mean the SMEC wins the tender. Sanral also said the harm complaint was speculative as they cannot predict the outcome of the tender process.

In fact, Sanral said SMEC stands an equal chance to the other bidders in being successful. However the court ruled in favour of SMEC.

“The applicant (SMEC) has a reasonable prospect of success and should be allowed to take the decision on review and have an effective remedy available.

“The right to partake in a constitutionally compliant procurement process is a clear right. The right to have a review application heard in which the court would be able to grant just and equitable relief is also a clear right. The applicant has thus established that it has prima facie right,” the judgment reads.

“It follows that any exclusion from participation in a process must be based on a sound and lawful foundation, absent of which, the applicant will have prima facie right and an apprehension of imminent irreparable harm. The immediate irreparable harm lies in the possibility that its constitutional rights are infringed by being subjected to an unconstitutional scoring system.”

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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