Expired tenders mean exactly that
The High Court reinforces certainty in public procurement
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The High Court has once again reaffirmed a fundamental principle of public
procurement law: once a tender validity period has lapsed, the tender process comes
to an end and cannot be lawfully revived.
In LTC Holding CC v Johannesburg Water SOC Ltd and Others (Case No: 2024-
131114), judgment the Court reviewed and set aside the award of a municipal tender
after finding that the tender had lapsed before any lawful award was made.
Background to the dispute
The dispute arose from Tender JW OPS 003/23, which sought to appoint a panel of
service providers for the supply and delivery of potable water over a 36-month period.
An unsuccessful bidder approached the court to challenge the award, alleging that the
tender validity period had lapsed before the award was communicated to the
successful bidders.
Johannesburg Water maintained that the tender had been validly extended and
internally awarded before its expiry. However, it was common cause that the award
was only communicated to the successful bidders several weeks after the final
extension of the tender validity period had lapsed.
The Court’s findings
The Court reaffirmed several well-established procurement principles:
- Tender validity periods are “rules of the game” and are fundamental to a
lawful, fair, and transparent procurement process.
- An organ of state has no authority to unilaterally extend a tender validity
period. Any extension requires the timeous consent of all participating
tenderers before the validity period expires.
- An internal decision to award a tender is not sufficient. A tender is only finally
awarded once the decision is communicated to the successful tenderer
- Once a tender validity period expires without a communicated award, the
tender lapses, and any subsequent award is unlawful.
Importantly, the Court rejected Johannesburg Water’s reliance on its internal Supply
Chain Management Policy, finding that it had not been properly incorporated into the
tender documents nor adequately communicated to bidders.
Upholding Procurement Law Without Disrupting Essential Public Services
While declaring the tender award unlawful and constitutionally invalid, the Court
adopted a measured and pragmatic approach to remedy. Recognising the essential
nature of potable water services, the Court suspended the declaration of invalidity
for 150 days to allow Johannesburg Water to conduct a fresh tender process and
ensure continuity of services.
This approach reflects the Constitutional Court’s guidance that remedies in
procurement matters must be just and equitable, balancing legality with the public
interest.
Key Procurement Lessons from the Judgment
This judgment serves as an important reminder that:
- Procurement timelines matter, and administrative convenience cannot trump
legality.
- Organs of state must strictly comply with tender conditions and applicable
legislation.
- Bidders are entitled to expect certainty, transparency, and adherence to
published rules.
For both public entities and private contractors, the decision reinforces the risks
associated with informal extensions, delayed communication, and reliance on
internal policies not properly incorporated into tender documentation.
Conclusion
This judgment reinforces the importance of finality, certainty, and procedural discipline
in public procurement. At Majang Attorneys, we continue to advise clients in both the
public and private sectors on procurement compliance, tender reviews, and litigation
arising from irregular procurement processes.
Should you require advice or representation in a tender-related matter, our team is
well placed to assist.