|
An unlucky year for litigation: In 2007, it seems no public institution is immune
Paul Emanuelli
While 2007 is proving to be a lucky year for tendering law aficionados, it’s not so lucky for purchasing professionals who want
to quietly go about their business with minimal controversy and intrigue.
From BC to Newfoundland, from southern Ontario to the far north, it
seems no public institution is immune from litigation. But purchasing professionals can start making their own luck by taking heed of the cautionary tales offered in the following case studies:
Turbulent evaluation
On February 5, 2007 in Canadian North Inc. v. Department of Indian Affairs and Northern Development, the Canadian International Trade Tribunal awardedlost profit damages and ordered the re-tendering of a $150-million northern air transport services contract because evaluators used an evaluation guide that was inconsistent with the RFP evaluation criteria.
While the government ultimately appealed and avoided liability based
on a jurisdictional technicality, the case serves as a wakeup call to purchasers whose evaluation tools don’t line up with their RFPs.
Haphazard bid
On April 17, 2007 in Bianchi Grading Ltd. v. University of Guelph, the Ontario Superior Court of Justice decided a contractor wasn’t entitled to extra payment for unforeseen work that should have been factored into its original bid.
The contractor failed to properly inspect the construction site before submitting its bid. The court refused to compensate the contractor for having “submitted its tender in a careless and haphazard fashion.” The result was a lucky break for the purchaser, since past cases have awarded extras where purchasers have failed to disclose material information about site conditions.
Mixed messages
On May 3, 2007 in Canada (Attorney General) v. Envoy Relocation Services the Federal Court of Appeal upheld a Canadian International Trade Tribunal order awarding a proponent 50 per cent of its estimated $1.4-million bid preparation costs after the government conducted a flawed evaluation. The dissenting judge called the award patently unreasonable since the evaluation error had no impact on the complainant’s evaluation ranking.
The next month, on June 11, 2007 in BDMK Consultants Inc. v. Department of Public Works and Government Services, the Tribunal found another flawed evaluation but only awarded $1,000 to the complainant since, like the first case, the evaluation error had no impact on the proponent ranking.
Bad negotiating
On May 3, 2007 in Zenix Engineering Ltd. v. Defence Construction Canada the Canadian International Trade Tribunal awarded the top ranked proponent lost profit damages after the government unilaterally terminated contract negotiations without first making a clear final offer on price.
This was found to be a breach of the evaluation rules since negotiators should have offered the top ranked proponents a final opportunity to meet their bottom line before ending talks and proceeding to the next proponent.
Right price, wrong form
On May 18, 2007 in Steelmac Ltd. v. Nova Scotia (Attorney General), the Nova Scotia Supreme Court upheld the government’s decision to reject a low bidder’s tender for non-compliance. The low bidder submitted the right price, but used the wrong form. The bidder argued its bid was substantially compliant. The court disagreed since
the form did not contain the legal representations required for a valid bid.
Litigious bidders
On May 23, 2007 in Advanced Ergonomics Inc. v. British Columbia (Workers’ Compensation Board), the BC Supreme Court dismissed an unsuccessful proponent’s claim of bias and conspiracy, finding the
proponent was given fair consideration under the disputed RFP process. The court also noted the proponent’s lawsuit justified the purchaser’s decision to exclude the plaintiff from future contracts.
Low bidder blues
It seems low bidders can’t get a break in 2007. On July 16, 2007 in Crown Paving Limited v. Newfoundland the Supreme Court of Newfoundland and Labrador upheld the government’s decision to reject a low bid for budgetary reasons.
On May 4, 2007 in Cherubini Metal Works Ltd. v. New Brunswick Power Corp.) the New Brunswick Court of Queen’s Bench upheld a purchaser’s decision to reject a low bid due to concerns over the inexperience of a proposed subcontractor. Then on May 23, 2007 in Continental Steel Ltd. v. Mierau Contractors Ltd., the BC Court of Appeal upheld a low bid bypass made due to the low bidder’s past history of filing lien claims. It seems the bidder’s bad history caught up with him.
Other bidders may take heed and decide against testing their luck in the courts in 2007. In the meantime, purchasers from coast to coast should keep their fingers crossed. b2b
Paul Emanuelli is a Canadian procurement lawyer and author of a textbook entitled Government Procurement. He may be reached at paul.emanuelli@sympatico.ca
|
