Kunene Rampala Inc. v North West Province Department of Education and Sport and Development

South Africa

15.09.2023

Commercial

A public procurement contract concluded in breach of the legal provisions is invalid and cannot be enforced

Present appeal concerned a dispute arising from an addendum to a service level agreement duly concluded between the Appellant, Kunene RampalaInc.(KR Inc.), a firm of attorneys and the North West Province, Department of Education and Sport Development (the Department), the Respondent.

Issue before present Court is to determine whether the high court was correct in finding that the contract was invalid, unlawful and in breach of the applicable procedural prescripts, in the absence of a counter-application seeking a review and setting aside of the addendum.

In Municipal Manager: Qaukeni Local Municipality and Another vs. FV General Trading CC, it is held that, a public procurement contract concluded in breach of the legal provisions ‘designed to ensure a transparent, cost-effective and competitive tendering process in the public interest, is invalid and will not be enforced.

The conclusion of the addendum did not comply with Section 217 of the Constitution as the process applied to appoint KR Inc. was not fair, equitable, transparent, competitive and cost-effective as required by the section. Such noncompliance with Section 217 was at variance with the principles of legality, since the Department had no authority to conclude the addendum in the first place. The Court also found that there was no evidence supporting KR Inc.’s contention that the addendum was valid as it was a single source procurement, which arose as a result of an emergency situation as the provision and delivery of the LTSM had to take place before the commencement of the 2016 school year.

With regard to the issue of a collateral and reactive challenge, the court a quo was correct in entertaining the collateral challenge of the Department, and declaring the addendum invalid and unlawful, for non-compliance with the prescripts of the public procurement processes. Therefore, the declaration of invalidity and unlawfulness of the addendum by the high court was warranted and justice required that the collateral challenge be entertained. Appeal dismissed.

Tags : Addendum Agreement Legality

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