Canada: Public Contracts: Can My Bid Be Rejected?

Compliance of a bid depends on the compatibility of two sets of documents: the call-for-tender documents and the documents comprising the bid. Two recent cases are indicative of the range of issues our courts are called upon to decide in this area. 

The mystery of the missing bank draft

The first of these decisions dealt with a compliance condition. 

C.F.G. Construction Inc. ("CFG") was the lowest bidder for a demolition contract to be awarded by the Société immobilière du Québec (the "SIQ", now called the Société québécoise des infrastructures). CFG was "stunned" to learn it was not awarded the contract, on the grounds that its bid did not include the bid surety required by the call-for-tender documents. According to CFG, a bank draft for that purpose had been enclosed in the envelope containing its bid documents. The SIQ persisted in maintaining that no bid surety had been provided, and rejected CFG's bid as non-compliant. Who was in the wrong here? 

On June 5, 2015, after hearing the evidence, the Court of Québec concluded that CFG had in fact included a bank draft with its bid, such that the bid should have been deemed compliant1

In its decision, the Court criticized the four-day delay between the opening of the bids and the SIQ's compliance analysis of them. During that time, the handling of the bids by SIQ employees heightened the risk that documents would be misplaced, and that the envelopes containing the bid documents might be tossed into the recycling bin. Is that what happened? Had CFG's bank draft been recycled? 

Ultimately, the Court found that the SIQ was liable for the damage caused by the loss of the bank draft. The judge accordingly awarded $25,000 to CFG to compensate it for the profit it would have earned had it performed the contract. 

On July 16, 2015, the motion for leave to appeal that judgment was dismissed2, as the matter was "primarily factual" in nature, and the trial judge's conclusion that a bank draft had been included with the bid documents was the cornerstone of his judgment. 

The mystery of the missing bank draft was thus solved.

Is your attestation from Revenu Québec valid?

The second decision deals with an eligibility condition. 

The Société québécoise des infrastructures (the "SQI") issued a public call for tenders for the construction of an office building that it would lease for 15 years, with an option to renew the lease for a further five years. 

When the bids were opened, Corporation de Développement Bertone ("Bertone") was the lowest bidder, but its attestation from Revenu Québec was missing. The following day, Bertone contacted Revenu Québec in this regard, in order to render its bid complete. The SQI considered however that it was too late for Bertone to do this, as Bertone was not able to provide it with an attestation issued prior to the deadline for the receipt of bids. This was an eligibility condition that was clearly stipulated in the call-for-tender documents. Bertone's bid was thus rejected. 

Bertone then filed a motion for a declaratory judgment in order to have the compliance of its bid judicially acknowledged, and a motion for an injunction to suspend the tender process until that judgment was rendered. 

On July 3, 2015 judge Gibeau dismissed Bertone's motion for the interlocutory injunction3. The judge concluded that a bidder who has submitted an attestation from Revenu Québec after the deadline for the receipt of bids has no prima facie case at the interlocutory stage. This irregularity on the part of Bertone was fatal to the eligibility of its bid. Where an attestation from Revenu Québec is missing, a grace period can be accorded the bidder, provided the attestation eventually submitted was issued by Revenu Québec for no more than 90 days before the deadline for the submission of bids. 

Thus, before submitting a bid, it is important to request an up-to-date attestation from Revenu Québec, as failing to do so could result in the bid being rejected as ineligible.

Footnotes

1 CFG Construction inc. v. Société québécoise des infrastructures, 2015 QCCQ 4995

2 Société québécoise des infrastructures v. CFG Construction inc., 2015 QCCA 1179

3 Corporation de développement Bertone inc. v. Société Québécoise des infrastructures, 2015 QCCS 3139

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.

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