State Tenders and Unlawful Disqualifications: What Contractors Must Know

Richard Hoal, partner and Khanya Mgebisa, associate, Cox Yeats

Public sector projects often represent significant opportunities for contractors across the country. Whether in infrastructure, transport, or housing, state tenders continue to shape much of the construction and engineering landscape in South Africa. But with those opportunities come risks, particularly when the procurement process is flawed, or a contractor is unfairly excluded.

It is not uncommon for contractors to suspect that a tender was improperly awarded: that the process was riddled with irregularities, the evaluation criteria were misapplied, or their bid was disqualified for reasons that were neither lawful nor rational. In those moments, acting promptly is paramount.

This article outlines what contractors must know about responding to questionable tender outcomes, the importance of following internal procedures, and the urgency with which review proceedings must be brought to prevent the contract from becoming untouchable.

Start with the Internal Remedies—But Do Not Wait Forever

Most state-owned entities and government departments have internal processes for challenging tender decisions. Whether styled as a bid appeal, reconsideration request, or internal review, this procedure must be the first port of call. Contractors may request written reasons and relevant records, such as bid evaluation minutes, scoring sheets, and adjudication reports, within a limited period, usually 14 days.

These internal procedures serve an important purpose. They give the state entity an opportunity to correct its decision or to provide clarity. But they can also delay the timeline for approaching the court and potentially obtaining an urgent hearing. Contractors who treat this process as a waiting game—hoping for a detailed response—often find themselves in trouble when the entity does not reply at all.

The position is that silence or delay on the part of the state entity does not pause the obligation to act. The courts have consistently held that an unreasonable delay in launching review proceedings may bar a challenge altogether.

Urgent Interdict Proceedings Must Be Brought Before the Contract Is Implemented

In applying for an urgent interdict to prevent the implementation of a tender, it is not enough to rely on your right to review a tender award. The risk lies in waiting too long to enforce that right.

In many instances, by the time the aggrieved bidder has prepared a review application, the successful bidder has already been issued a letter of award, concluded a contract, and moved onto site. At that stage, courts are far less willing to interfere.

South African courts have been clear on this point. In the Constitutional Court case of National Treasury v Opposition to Urban Tolling Alliance 2012 (6) SA 223 (CC), the court explained that:

“The prima facie right a claimant must establish is not merely the right to approach a court in order to review an administrative decision. It is a right to which, if not protected by an interdict, irreparable harm would ensue.”

In short, it is not enough to argue that the award was unlawful. One must show that unless the court intervenes now, irreversible harm will result. The purpose of an interdict is to prevent future harm, not to undo actions that have already taken place.

It is common for judges not to grant interim relief precisely because the successful bidder had already begun work on site, given that by that stage, the harm was no longer imminent or irreversible. The decision had already been implemented. The opportunity to stop it had passed.

The Balance of Convenience Will Rarely Favour Delay

Even where the court accepts that there may have been irregularities, it will still weigh the balance of convenience before granting any relief.

In the context of public infrastructure, state entities are likely to argue that any interdict halting the project would disrupt delivery, increase costs, and harm the public interest. Where the project timeline is relatively short, but a review process could take a year or longer, the court will be reluctant to freeze the process unless there is a compelling reason to do so.

Delays, in other words, shift the balance against the contractor.

Practical Guidance for Aggrieved Bidders

A contractor facing a situation where its bid has been rejected under questionable circumstances should take the following steps:

1. Immediately request reasons and supporting documentation from the state entity. Be precise and document the request and information required.

2. Follow the internal appeal or bid review process—but do not allow silence or delay to lead to inaction.

3. Seek legal advice urgently. Even if the internal process is pending, it may be necessary to prepare for court.

4. Bring review proceedings before implementation begins. Once work on site has started, the prospects of obtaining interim relief drop significantly.

5. Act with urgency. Courts have the discretion to refuse to entertain reviews brought after undue delay, regardless of the merits.

Closing Thoughts

There is often a narrow window within which a contractor can challenge an unlawful or procedurally unfair tender decision. That window closes quickly, sometimes within days, especially once the implementation phase has begun.

While many contractors are understandably reluctant to rush to court, the reality is that delay can result in the loss of any effective remedy. The key is to act with clarity, urgency, and legal precision, before it becomes too late to do anything at all.

For contractors who find themselves in this difficult position, it may be worth considering early legal advice to preserve the right to challenge a flawed procurement process before the ground shifts irreversibly.

Lerato Ramango

National Marketing and Brand Manager

Cox Yeats

Lramango@coxyeats.co.za

www.coxyeats.co.za

Richard Hoal, partner

Khanya Mgebisa, associate