Eskom has been granted depart to appeal the excessive court docket judgment that put aside and declared unlawful tenders value about R16 billion, to supply upkeep and outage restore providers at its 15 coal-fired energy stations.
The tenders had been awarded to Actom and Steinmuller Africa in October 2021 (for seven and eight energy stations respectively).
Judge Anthony Millar issued an order on Monday granting Eskom depart to appeal in the Supreme Court of Appeal the judgment he handed down in November 2022 to Babcock Ntuthuko Engineering’s utility to assessment, put aside and declare unlawful the contract awards to Actom and Steinmuller Africa.
In the November 2022 judgment, Millar ordered Eskom to conduct a contemporary tender course of and full it inside six months, and suspended the setting apart of the contracts till its finalisation.
Babcock disqualified
Babcock lodged the applying after it was disqualified from the tender. This was for failing to adjust to a requirement in the request for proposals (RFP) to supply an ISO 3834 certificates issued by the South African Institute of Welding.
It argued that Eskom was conscious it had each certification and the related certificates, as a result of these had been necessities it needed to fulfil in its profitable award of prior tenders.
Prior to the tender award, Babcock offered specialised engineering providers to 4 coal-fired energy stations – Hendrina, Kendal, Lethabo and Matla – in phrases of a contract concluded with Eskom on 3 June 2016.
The contract was renewed a number of instances, with the final extension lapsing on 31 December 2021.
During this era, Actom and Steinmuller carried out related providers at Eskom’s different coal-fired energy stations.
Appeal utility
In its utility for depart to appeal, Eskom stated the court docket discovered the obligatory returnables of “certification to ISO 3834” – the ISO precondition in the RFP – didn’t seek advice from a certificates however “to the body that has the authority to issue a certificate”.
Eskom stated the court docket held that to learn this as requiring the submission of a certificates could be “redundant, irrational and out of place” with the formulation and objective of the RFP, as a result of different obligatory returnables (comparable to these referring to black financial empowerment) particularly required the submission of a certificates.
The court docket held that the interpretation of the ISO precondition adopted by Babcock – that it required a mere assertion by the bidder that it was licensed – was thus “to be preferred”.
Eskom argued that the court docket erred in making this discovering, claiming that the textual content, objective and context of the precondition dictate that an ISO 3834 certificates was required to be submitted by the bidders.
It stated the court docket held that “certification” meant “the action of an instance of certifying the truth” or “referred to a body that has the authority to issue a certificate”.
But Eskom stated neither interpretation of “certification” matches comfortably in the framing of the ISO precondition in a approach that renders its which means wise.
Even if the court docket’s interpretation was adopted, the ISO precondition nonetheless required the submission of an ISO 3834 certificates, it stated.
Eskom stated a certificates is the means via which a certification company or “body” certifies that an individual meets a top quality customary.
It stated nothing in the court docket’s judgment helps the interpretation of the ISO precondition adopted by Babcock that “certification” means a mere assertion by a bidder that it holds a certificates.
“Only the certification agency, and not a bidder, can certify a person’s ability to weld to the ISO 3834 standard,” stated Eskom.
It added that on Babcock’s personal model, the aim of the ISO precondition was “to ensure that a bidder is qualified to ensure that welded products meet customer needs within statutory and regulatory requirements related to a particular weld”.
It stated it was additionally not disputed that the precondition was “crucial to the tender”, which was for boiler upkeep – which “predominantly entails complex and specialised welding”.
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“It was subsequently vital for Eskom to confirm beforehand that all the bidders had been certified to weld to the suitable high quality customary.
“An interpretation of the ISO precondition that one thing lower than an ISO 3834 certificates was required to be submitted by bidders – comparable to a mere assertion by a bidder that it was licensed – defeats the aim of the precondition.
“If the ISO precondition is read in this way, even an uncertified bidder who was not qualified to weld to the appropriate standard could pass the mandatory requirements evaluation stage and be awarded the tender based on a (false) statement that it is certified,” it stated.
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Eskom stated opposite to the court docket’s discovering, if the ISO precondition was correctly interpreted, it required bidders to submit an ISO 3834 certificates – not merely state that that that they had a certificates.
Requirements ‘not ambiguous’
It stated the court docket additionally erred in its discovering that the obligatory necessities “were ambiguous” and that Eskom ought to have recognised this and given bidders, together with Babcock, a chance to adjust to the meant necessities – and that its failure to take action rendered Babcock’s disqualification procedurally unfair in phrases of the Promotion of Administrative Justice Act.
Eskom stated no occasion, together with Babcock, contended that the ISO precondition was ambiguous.
It stated Actom and Steinmuller understood that an ISO 3834 certificates was required and complied with this, and that Babcock itself understood the requirement in this manner.
“Babcock admitted in its letter to Eskom of 19 November 2018 ‘that copies of its current ISO 3834 certificates may have been excluded in error from the bid documents to Eskom’ and it repeatedly submitted ISO 3834 certificates after the tender closing date in an attempt to cure the defect,” it stated.
Opportunity for clarification
Eskom added that even when the ISO precondition was ambiguous, the paradox was eliminated by the tender clarification assembly held by Eskom earlier than bids had been submitted, which was attended by bidders together with Babcock, with the minutes of the assembly recording that bidders had been required to supply a “Valid certificate of ISO 3834”.
“The court therefore erred in concluding the ISO precondition was ambiguous and the tender process was procedurally unfair,” it stated.
Actom and Steinmuller Africa had been each events to the applying for depart to appeal.
Actom stated the ISO precondition was not unfair and argued that the treatment was “inappropriate”.
