JDN Civil Engineering CC JV v Central Procurement Board of Namibia and Another (HC-MD-CIV-MOT-GEN-2024/00539) [2024] NAHCMD 686 (13 November 2024)

Case Title:

JDN Civil Engineering CC JV Applicant

and

The Central Procurement Board of

Namibia 1^st Respondent

Namibia Water Corporation Ltd 2^nd Respondent

And 10 others

Case No:

HC-MD-CIV-MOT-GEN-2024/00539

Division of Court:

Main Division, Windhoek

Heard on:

6 November 2024

Heard before:

Coleman AJ

Delivered on:

13 November 2024

Neutral citation: JDN Civil Engineering CC JV v The Central Procurement Board of Namibia (HC-MD-CIV-MOT-GEN-2024/00539) [2024] NAHCMD 686 (13 November 2024)

Order:

1. The applicant’s non-compliance with the rules of court is condoned for urgency.

2. The relief asked for in Prayer 6 of applicant’s notice of motion is dismissed.

3. Applicant is ordered to pay first respondent’s costs to include one instructing and one instructed counsel and second respondents cost of suit.

4. The matter is removed from the roll: Case Finalized.

Reasons for order:

COLEMAN AJ:

Introduction

[1] This is an urgent application for the review and setting aside of four decisions taken by first respondent in the context of applicant’s bid for the Construction of the Naute-Keetmanshoop Water Pipeline Replacement and Ancilliary Works (the Project). These decisions were made known to the applicant on 4 July 2024, 9 October 2024 and 17 September 2024, respectively. AppIicant also asks that first, alternatively, second respondent is ordered to provide a procurement contract to applicant for the bid (Prayer 6 of applicant’s Notice of Motion). Applicant persisted with only this prayer. The application is opposed by first and second respondents. They both maintain that the applicant did not make out a case for urgency and that the contract terminated.

Urgency

[2] It is correct that some time elapsed since the triggering events relating to the review relief. However, correspondence was exchanged and some letters from applicant were not responded to by first respondent. In my view Government agencies cannot contribute to delays and then raise urgency. In addition, although not clearly articulated by applicant, I assume it can be accepted that it may not have substantial redress in due course due to the circumstances here. Therefore, I hold that applicant made out a case for urgency.

Merits

[3] At the hearing counsel for the applicant indicated that he will ask only for Prayer 6. I assume this means the rest of the relief is abandoned. Persisting with Prayer 6 is premised on the contention that first respondent repudiated its obligation to provide the contract for the Project. Whether or not this is correct depends on the interpretation of the applicable legislation, bidding documents and correspondence.

[4] Section 55(6) of the Public Procurement Act, 2015 (the Act) stipulates that a successful bidder may be requested to submit a performance security and sign a contract within the period specified in the bidding documents. The concept ‘Bidding documents’ is defined in the Act and includes documents that contain instructions to bidders. Clause 39.2 of the Instruction to Bidders, which is clearly a generic document of general application, stipulates that, “(u)ntil a formal contract is prepared and executed, the notification of award shall constitute a binding Contract.”. Clause 41.2 of the Instruction to Bidders provides that failure by the successful bidder to submit a performance security or to sign the contract shall constitute sufficient grounds for annulment of the award. The Procuring Agent may then award the contract to the next lowest bidder.

[5] On 14 February 2024 the first respondent issued a Notice of Award in the bid in favour of applicant. On the same date the first respondent addressed a Procurement Acceptance Letter to applicant (annexure A3 to applicant’s founding affidavit). Paragraph 3.3 of the letter is important. It reads as follows:

“You are requested to submit a Performance Guarantee worth ten (10) percent of the contract value (excluding VAT) in line with Section 55(6) read together with Regulation 38(4) of the Public Procurement Act, 15 of 2015, as amended. If the Performance Guarantee is accepted by the CPBN, a contract will be signed within the period stated in 3.9¹ below or as extended by the Accounting Officer of the CPBN.” (emphasis added)

[6] Paragraph 3.10 of the letter sets 28 March 2024 as the date for the submission of the performance security and 5 April 2024 as the date for the signing of the contract. Although these dates may fall outside the initial 30 days prescribed (taking into account that ‘days’ is defined in the Act as excluding Saturday, Sunday or public holidays) applicant asked for – and was granted – various extensions. On 13 June 2024 first respondent decided to cancel the bidding process for applicant’s failure to provide the performance guarantee and proof of working capital and informed applicant in a letter dated 26 June 2024 (annexure A29) thereof. This came to the knowledge of applicant on 4 July 2024. Applicant eventually, on 4 October 2024, provided the performance guarantee and first respondent refused to accept it.

[7] As far as first respondent is concerned the performance guarantee should have been delivered by 6 June 2024 after a number of extensions. Failure to do so, it contends, resulted in the bidding process terminating automatically, since submission of a performance guarantee was meant to be a condition precedent. It relies primarily on paragraphs 3.3 and 3.8 of the Procurement Acceptance letter. Paragraph 3.8 of the letter is essentially the same as Clause 41.2 of the Instruction to Bidders. It stated in no uncertain terms that if applicant fails to provide the performance security or sign the contract within 30 days (we know now that was extended) the Accounting Officer will award the contract to another bidder in line with s 55(7)(a) and (b) or cancel the bid in terms of s 54(1)(b) or (f) of the Act.

Conclusion

[8] In light of the above the question now is does first respondent have the obligation to provide a procurement contract for the Project to applicant? In my view the answer is no. Paragraph 3.3 of the Procurement Acceptance letter dated 14 February 2024 (quoted in paragraph 5 above) is pivotal. The sentence, ‘If the Performance Guarantee is accepted by The Central Procurement Board of Namibia (CPBN), a contract will be signed within the period stated in 3.9 below or as extended by the Accounting Officer of the CPBN’, says it all. It is common cause that the CPBN never accepted the performance guarantee.

Order

[9] I consequently make the following order:

1. The applicant’s non-compliance with the rules of court is condoned for urgency.

2. The relief asked for in Prayer 6 of applicant’s notice of motion is dismissed.

3. Applicant is ordered to pay first respondent’s costs to include one instructing and one instructed counsel and second respondents cost of suit.

4. The matter is removed from the roll: Case Finalized.

Judge’s signature

Note to the parties:

G Coleman

Acting Judge

Not applicable

Legal Practitioners:

Applicant

First Respondent

Adv Heathcote SC, assisted by Adv Ntinda instructed by Fisher, Quarmby & Pfeifer

Mr Ketjijere, instructed by

Government Attorneys

Second Respondent

Mr Brendel, Shikongo Law Chambers