Canada: E-Procurement

Governments have spent billions on information technology (IT) projects over the years. Yet, unfortunately, the public sector generally (with some notable exceptions) has not yet achieved the same positive results from this IT investment that have occurred in the private sector. One important exception is e-procurement, where IT enablement of the purchasing function has brought some very real tangible benefits, at least to jurisdictions that have implemented sophisticated, online tendering and bidding systems.

More than Paper on Steroids

Consider, the e-procurement Internet site of the British Columbia government. On this site, prospective bidders on government projects can find a range of information related to the relevant tender. In this sense, fulfills the first objective of government going online — namely, "iGovernment" (or the process by which governments save costs and increase ease of use by uploading otherwise paper-based forms to a website, from which the public can then download them).

Some government online procurement sites are only capable of making available tender forms. But goes much further. For example, as a supplier, you can register for the site's bid-watching service. You create a profile of the types of government contracts that would interest you, and every time one becomes available, the site automatically sends you an e-mail. This is a win-win service. It's easy for the government to implement, and it produces more bidders per project. It's also great for suppliers because it means they will not miss a bidding opportunity. On the other hand, suppliers' bid-to-win rates will likely fall, given the greater competition from the larger number of bidders.

Moreover, the site does not just make available bid documents for downloading. Companies can also post their bids and proposals online. Thus, the site contains more than just "information"; it also offers "interactivity." The result is easier and cheaper bidding, so the government gets more participants in each bid. Although each bidder's bid-to-win ratio may drop at, the total number of bidding opportunities will expand as all other Canadian governments adopt similar e-procurement systems. Bidders will thus be able to bid easily in more distant jurisdictions, resulting in benefits to both governments and bidders.

Nagging Legal Concerns?

While the benefits from online bidding are clear, those governments who have not adopted e-procurement, and potential bidders, still have concerns about the legality of online tendering, the main one being: "Is online bidding as legally effective as traditional paper-based bidding?" The answer, in a nutshell, is "Yes."

Over the past 10 years, several legal developments related to effecting commerce over the Internet have coalesced to produce a legal environment that is as safe and sound for doing business electronically as it has long been for doing business with paper-based tools such as written contracts.

Helpful E-Commerce Laws

Every jurisdiction in Canada (except the Northwest Territories, but including Nunavut and Yukon) today has an e-commerce statute like Ontario's Electronic Commerce Act (or, in respect of, B.C.'s Electronic Transactions Act). These statutes establish several important principles.

One is that information will not be legally ineffective merely because it is in electronic form. Now, that is not to say all information in electronic form is legally effective. There are still many ways information (whether in electronic or paper-based form) can be ineffective, such as when it results from fraud, mistake or lack of capacity, as with a minor. Therefore, it is still imperative that online bidding systems (such as be designed to effectively create binding contracts.

Canada's e-commerce statutes also provide how any legislative rule, requiring that certain information be in "writing," may be satisfied in an electronic environment. Equally, the statutes confirm that an "electronic signature" is any electronic information that a person creates or adopts (including a PIN or password) in order to sign a document, so long as it is in, attached to or associated with the document.

There are, however, a few exceptions. Manitoba has not yet implemented the e-signature part of its e-commerce statute, and PEI requires a "digital signature" under its e-commerce statute (which is a more secure version of an "electronic signature"). As noted above, the NWT has no such statute. In these three jurisdictions, however, reliance can be placed on the common law, which has recognized in Canada the effectiveness of e-signatures through judge-made law.

The e-commerce statutes in the other jurisdictions are still helpful because their e-signature provisions confirm statutorily the ability of websites to implement various technologies and processes to authenticate users. For example, issues a password (they call it an "e-bidding key") that a bidder uses when submitting binding bids. Each particular password designates only one particular entity. In this way, is comfortable knowing who submitted which specific bid, and is also confident that this type of process is blessed by B.C.'s Electronic Transactions Act.

Useful New Evidence Laws

The federal and various provincial evidence laws have also been amended usefully to help facilitate e-commerce. The question here is: "Is a copy of the electronic bidding information equally admissible as evidence in court as the traditional paper-based bidding material?" Again, the answer is "Yes," provided you can show that your computer system was working properly at all the relevant times.

Therefore, it is a "best practice" to keep a log of the operational history of your computers. Such a log should show how rarely they failed to operate properly, and ideally show that whenever a computer glitch occurred, it did not result in a corruption or loss of data. For example, follows this approach, as the site operators keep an audit trail of the operational history of their online system.

In this regard, we now have in Canada an official "standard" (called Electronic Records as Documenting Evidence) that sets out how to establish the integrity and authenticity of electronic records through the creation of an electronic records management program. Your program would be reflected in a manual that would address security, quality assurance, indexing and various other matters. In essence, if you follow this program, it is very unlikely that a copy of your electronic records will not be admitted as evidence in court should you need to do this some day.

Sensible Jurisprudence

Not only legislators are doing their part to create a legal environmental hospitable to e-procurement. Judges are assisting as well, in several helpful decisions dealing with various novel questions emanating from online commercial arrangements.

In one Canadian case, the court concluded that clicking the "I agree" button at the end of a set of terms and conditions presented on a computer screen was functionally the equivalent of signing a paper-based contract. When one party in the litigation argued that he hadn't read all the terms because they weren't all displayed on the single initial screen, the judge (sensibly) responded that a signatory to a multi-page paper contract does not see all the terms on one page either. Signatories have to turn the various pages, just as an online contract has to be scrolled through.

In another case, a judge was asked to approve a novel online shareholder voting system where shareholders were sent a password by e-mail and could then register on an Internet site where they could vote. The question to the judge was: "Is such a system as good as the traditional paper-based means of voting, where paper-based ballots/proxies are sent by regular mail to shareholders, who mark the ballots and send them back by regular mail?"

The judge in this case compared the various respective features of the paper-based and online systems, and concluded (sensibly) that the online method is preferable because it is safer, more secure and more efficient. Now, of course neither system is perfect, in the sense that both are capable of being subject to fraud, but the key point is that the paper-based process was itself not immune from forged signatures. Consequently, the electronic system should not seek perfection either. Rather, both should aim for a reasonable degree of security and authenticity.

Careful Website Design

That the legal environment in Canada today facilitates e-commerce and e-procurement is only half the battle. The other half is to carefully design your e-procurement site in a manner that ensures that binding bids and contracts are indeed made on it. You should, for example, require bidders to register on the site, and as part of the registration process they should agree to some sensible, and even-handed, terms and conditions.

One problem that often arises regarding such terms is that site operators make the terms far too one-sided by inserting provisions that are extremely onerous for users. In the consumer context, such overreaching terms are sometimes found to be unenforceable by courts. But even in the commercial world, it is a good idea to use sensible, even-handed terms.

Here is one example. Some e-procurement site operators say, in their terms, that they can discontinue the online service without notice to users of the site. Well, imagine the scenario where a bidder has come to rely exclusively on the site (and quite reasonably so, because the government wants to wean bidders off the expensive paper-based process). The bidder submits an online bid, only to be told later that it was never effectively received because the online procurement site (without any notice) had been terminated. It is an interesting question whether the bidder would have any recourse against the government, notwithstanding the site's terms and conditions to the contrary.

In short, the legal terms that bind the bidders (and the entity hosting the site) need to be drafted carefully and sensibly. But if this is done, parties using the site can be confident that their e-procurement activities on the site are as effective as traditional paper-based measures.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions