SCA dismisses application to interdict government tender
The SCA has dismissed an application by a rival bidder to interdict a tender awarded by the Western Cape Department of Infrastructure to Royal Security, a company once controlled by Roy Moodley who is implicated in state capture.
The firm which won a R282m contract to provide security services for the Western Cape’s fixed assets.
The business, once controlled by Roy Moodley, is now controlled by his son, Magesh.
SCA judges Visvanathan Ponnan, Tati Makgoka and Nolwazi Mabindla-Boqwana, with Judges Glenn Goosen and Phillip Coppin concurring, dismissed an appeal brought by Tyte Security Services.
The Daily Maverick reports that the five respondents were the Western Cape Provincial Government, the MEC for the Department of Infrastructure, the Western Cape Department of Infrastructure, Royal Security and SS Solutions trading as Seal Security.
Seal Security had won a bid in 2021 to provide services to the department and had wanted the Western Cape High Court to interdict the government from appointing Royal while a review application to set aside the tender was underway. Seal Security and Tyte Security Services, another Royal rival, had shared the earlier contract.
The SCA found it was common ground during litigation that the price Royal had tendered was ‘most favourable’ to the provincial government.
The bid, the court noted, was ‘lower than all the others by a significant margin’.
Royal’s bid of R282m for the 24-month contract was 18.45% below the pre-tender estimate, whereas Seal and Tyte had exceeded the estimate by 5.62% and 1.35% respectively.
The DM notes that the SCA quoted an earlier opinion by Judge Patrick Gamble that ‘the approach adopted by the province was in accordance with the touchstone of public procurement – the promotion of competition and cost-effective tendering. Importantly, the exercise resulted in a significant saving for the public purse – around R83m when compared to Seal’s price’.
While sharing the contract, the court said, the anticipated windfall to Seal and Tyte of a further turnover of R100m after the award of the bid to Royal represented 28.16% of the full-term value of the second contract.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
