Martel v. Canada
"Procurement Law Basics - Part 2" looked at the case of MJB Enterprises, where the Supreme Court of Canada implied a term into Contract A that only a compliant bid may be accepted by the owner. The next Supreme Court of Canada case we are going to look at is Martel Building Ltd. v. Canada, a case from 2000. In this case, the government was looking for rental property. The terms of the tender were such that bidders were invited to propose a rent per square foot. However, the evaluation provisions in the bid documents stated that the government would make estimates as to the costs needed to set up the rental premises, moving costs and so on. The evaluation was stated to be on the basis of the offer that would yield to the government "the best value."
Martel offered a low rate per square foot, and on this basis would have been the lowest bidder. However, the government added around $1,000,000 to their price for fit-up costs. Martel argued that the addition of fit-up costs was unnecessary and therefore the government should not have done this.
Duty to be fair and consistent
The court held that it was appropriate to imply "a term to be fair and consistent in the assessment of the tender bids". This was justified on the basis of the presumed intention of the owner and the bidders. The court believed this intention would have been there, on the basis that bidders will only submit bids if they believed that they will be treated fairly and consistently by the owner. The privilege clause, allowed the government not to accept the lowest or any bid, did not exclude the obligation to act fairly.
In this case, the court held that the government had not breached this duty to act fairly. It had expressly reserved the right to apply fit-up costs to the bid, and did so on the basis that was consistent across all bidders.
Other cases
Other cases have considered the question of when an owner is acting fairly. For example, the BC Court of Appeal held in Elite Bailiff Services Ltd. that it would be unfair to assign a fixed number of points to certain aspects of their proposal as opposed to properly assessing the proposal on an individual basis and in Chinook Aggregates Ltd. that owners must evaluate bids on the basis of the criteria set out in the bid documents, not on any hidden criteria.
The next installment of Procurement Law Basics will look at questions of time - when is a bid due?
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