The Special Investigating Unit ("SIU") instituted proceedings before the Special Tribunal to review and set aside the South African Social Security Agency ("SASSA") award of a tender to Kwasa Food Supplies (Pty) Ltd ("Kwasa") for the provision of food parcel under the State-funded Social Relief Distress programme ("the SRD"). The Social Relief Distress Programme serves the most vulnerable in society, thus evoking much emotion when allegations of irregularities surrounding the tender were made.
Background
The SIU was mandated by Proclamation 32 of 2020 (published on 6 November 2020 in Government Gazette number 43885 ("Proclamation")) to investigate any maladministration within SASSA and in particular whether there was any resultant loss or damage suffered by SASSA in relation to services it awarded to Kwasa. Upon investigation, the SIU found that there was a deviation from the tender process and thus instituted a review application against inter alia Kwasa and SASSA.
The following issues arose in this application:
Should the SIU be granted condonation?
There was a substantial delay on the part of the SIU to institute these proceedings. The decision to institute proceedings was taken in July 2021, but the application was only instituted on 24 March 2024. When determining whether the delay should be condoned, the Special Tribunal considered the following principles, most of which were highlighted by the Constitutional Court in Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd:
- The court/ tribunal should exercise its discretion when deciding whether or not to overlook a delay.
- The court/tribunal should first consider whether the delay in instituting the proceedings was reasonable. Reasonableness will be assessed on the facts before the court.
- The time to institute the proceedings start running from the time an applicant reasonably becomes aware or reasonably ought to have become aware of the unlawful act.
- The Tribunal Rules do not prescribe time periods for instituting civil proceedings. However, this does not absolve an applicant from issuing civil proceedings expeditiously. The requirement of "soon as possible" applies in a case of a legality review.
- The court also cited the following principle from Buffalo City "Even where a delay is found to be unreasonable, however, our precedents establish that a court retains a discretion to overlook the delay provided it is in the interests of justice to do so. This stage of the procedural enquiry should not take place in a 'vacuum'. It must instead involve weighing (a) the effect of the delay on the parties, and (b) the nature of the impugned decision"
In reaching the conclusion that the SIU's delay was not wilful nor unreasonable, the Special Tribunal took the following facts into account:
- The delay in filing the application was a result of the overwhelming number of cases of irregularities that the SIU had to investigate arising from the procurement process during the COVID-19 pandemic period.
- The lack of resources at that time within state institutions was also a huge factor that resulted in the delay (i.e. it faced challenges with the appointment of counsel due to outstanding counsel fees; the State Attorney was overwhelmed with work as the COVID-19 matters added to its already known backlog; and the SIU faced difficulties in respect of establishing a panel of attorneys in private practice to render services directly to the SIU)
The Special Tribunal further emphasised that the delay must be judged together with the merits of the case. The Tribunal held that the prospects of success in this case were not without merit and an analysis was necessary to assess whether the relief sought was appropriate in accordance with South African jurisprudence. It was further held that it is in the interest of justice to grant condonation.
Therefore, the Special Tribunal granted condonation for the late filing of the review application. The Special Tribunal then proceeded to determine the main relief sought by the SIU.
Did the ambit of the Proclamation cover the SRD programme?
This issue concerned the interpretation of the Proclamation and the Schedule to the Proclamation. The Proclamation gave the SIU the powers to investigate unlawful or improper conduct "which took place between 1 January 2020 and the date of publication of this Proclamation or which took place prior to 1 January 2020 or after the date of publication of this Proclamation, but is relevant to, connected with, incidental or ancillary to the matters mentioned in the Schedule". On the other hand, the Schedule empowered the SIU to investigate the procurement of goods and services "which has caused or may cause serious harm to the interests of the public or any category thereof during, or in respect of the national State of disaster".
The interpretation became an issue because the tender was initiated before the State of National Disaster but was ultimately awarded during the State of Disaster. Kwasa argued that the SRD had nothing to do with the State of Disaster.
In determining this issue, the Special Tribunal found that on a plain as well as a contextual reading, the Proclamation and the Schedule really covered services rendered during the time of the disaster or in respect of the state of National Disaster. Accordingly, to read the Proclamation and the Schedule harmoniously the Proclamation correctly covered the SRD programme, albeit that the tender was initiated before the period of the National Disaster. The investigation by the SIU was accordingly valid.
Was the deviation granted by the Treasury good in law?
Treasury Regulation 16A6.3 requires the advertisement of a tender for a minimum period of 21 days before the closure of the tender. SASSA requested a deviation in the tender process based on the nature of the service, the fact that it was urgent and that it provided social relief to the poor. The National Treasury allowed the deviation. The SIU argued that this decision was based on incorrect facts. Kwasa contended that the SIU cannot have the tender set aside without challenging the National Treasury's decision to have the deviation set aside.
The Special Tribunal held that South African jurisprudence is clear that a decision remains valid until set aside. In the absence of a challenge to set aside the National Treasury's decision, it remains valid until set aside. Based on the reasoning in MEC for Health, Eastern Cape, and Another v Kirland Investments (Pty) Ltd t/a Eye & Lazer Institute, the Special Tribunal held that it may well be that the approval was defective, but it remained in place until set aside.
Conclusion
Although the SIU was successful on the question of condonation and the ambit of the Proclamation, Kwasa was substantially successful in the main relief sought by the SIU. The SIU failed in reviewing and setting aside of the tender sought.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
