In a June 2025 judgment, the High Court clarified that organs of state may invite or accept multiple or alternative bids in a procurement process, provided that they follow constitutional principles of fairness and transparency.
The matter arose from a tender for office accommodation in East London, advertised by the South African Local Government Association (SALGA). The applicant had queried whether it could submit different options and prices in its bid, to which SALGA responded affirmatively, provided that the options were clearly distinguished. The applicant accordingly submitted four bids – two each in respect of two different premises.
SALGA awarded the tender to another bidder at a higher price than the applicant’s bids. The applicant therefore challenged the lawfulness of the procurement process in terms of the Promotion of Administrative Justice Act, on the basis that SALGA failed to evaluate all its bids. The court was required to determine whether the submission of multiple or alternative bids was lawful.
The court observed that neither the Preferential Procurement Policy Framework Act and its regulations nor the Public Finance Management Act and its Treasury Regulations expressly prohibit multiple or alternative bids. SALGA’s own Supply Chain Management Policy is also silent on the topic.
In principle, the court found no reason why organs of state should not allow multiple or alternative bids, as this enhances competitiveness and cost-effectiveness. Accordingly, a set of multiple or alternative bids together constitute an acceptable tender of a composite nature, unless such bids are expressly prohibited in the tender specifications.
Having reached this conclusion, the court found that the applicant’s submission of multiple or alternative bids in this matter was lawful, as it was not prohibited by the tender specifications and SALGA gave its express approval in response to the applicant’s query. SALGA therefore should have evaluated all the applicant’s bids. In addition, the court found that SALGA’s failure to share its express approval of multiple bids with the other potential bidders rendered the procurement process procedurally unfair and non-transparent.
In the circumstances, the court set aside SALGA’s failure to evaluate all the applicant’s bids, as well as the award of the tender to the other bidder. Given the harsh consequences of this for the other bidder, who was innocent and had incurred significant expenses in implementing the tender award, the court suspended its order for six months to provide for a fresh procurement process to be conducted by SALGA within that time, using revised tender specifications as needed.
The judgment illustrates that bidders in a procurement process are entitled to submit multiple or alternative bids, as long as this is not expressly prohibited by the tender specifications.