Contract “A” is the term of the contract concluded between a bidder and an owner after the submission of a compliant tender in a tender. Contract “B” is the contract for goods and services itself, which is concluded with the acceptance by an owner of the contractor`s least compliant offer (if price is the key factor in the detailed evaluation criteria). Contract “A” governs the conduct of the bidding process, including but not limited to how a bidder can expect its response to the call for tenders to be evaluated. In the event that the owner does not comply with the conditions set out in the initial bid (i.e. deviates from the evaluation criteria originally described), the bidder may argue that contract “A” has been breached. In the 2010 Decision of the Supreme Court of Canada, Tercon Contractors Ltd. against British Columbia, the Court was divided as to whether the application of a full disclaimer to protect B.C should be recognized. Government of liability for breach of its implied duty of fairness/obligation to reject a non-compliant offer. Using the principles of contractual interpretation, the majority of the Court (5 out of 9 Supreme Court justices) narrowly interpreted a limitation of general liability clause and concluded that the clause does not protect the government from liability in these circumstances. However, the minority (4/9 The Supreme Court) interpreted the clause differently and considered that the clause protected Government B.C. Disclaimer: Below are general categories of rules that shape government procurement law in Canada.
This summary should not serve as final guidance on the rules that apply to a particular organization or market. For definitive advice, it is always best to contact a lawyer. In Canada, the rules of the contract A tendering process, such as . B when tenders are to be submitted, have been strictly enforced by the courts. Buyers and bidders must ensure that the rules of the bidding process are strictly adhered to. Due to the possibility of facing an unforeseen and undesirable outcome under Contract A, as mentioned above under “How Contract A complicates things”, some buyers use prompts that include elements of the tender format while taking steps to eliminate Contract A in order to avoid the risks caused by these implicit obligations of contractual fairness. However, the qualifications of the offer are not “mere irregularities”. Responses that differ from the requirements of the tender in terms of quantity and quality, for example, and that attempt to qualify or modify the terms of the tender are generally considered counter-offers (and cannot be accepted). Although declarations of qualification may not make the tender a counter-tender, attempts to qualify a tender can cause two main problems: contracting companies often try to compensate for the risk of losing an otherwise important tender by including a clause – called a “privilege clause” – in tender documents and by reserving the right to accept tenders that may not be reacting one hundred per cent to the tender (p. B the right to non-compliance with an offer). The rules that apply to a particular market are generally based on the following: the third principle to be retained is the duty of fairness.
In Martel Building Ltd.c. Canada, it was reaffirmed that all bidders participating in a call for tenders must be treated fairly and equally, unless expressly agreed otherwise in the terms of the call for tenders or in a privileged clause. The courts have concluded that the obligation to treat all bidders fairly and equally is consistent with the objective of protecting and promoting the integrity of the tendering process and benefits all participants involved. Without this implicit term, bidders whose fate could be predetermined by certain undisclosed standards would incur significant costs in preparing futile tenders or, ultimately, avoid participating in the tendering process. The arguments put forward by Ron Engineering were quite complex, but in essence, Ron Engineering argued that it had not withdrawn its offer because it had established its error prior to acceptance and that, therefore, the right to withhold the deposit had not been triggered. Ron Engineering brought an action for recovery of the tender and the Commission opposed Ron Engineering`s refusal to implement the terms of the call for tenders. For example, in Double N Earthmovers v. Edmonton (City)[5], the call for tenders required that serial and licence numbers be provided for all equipment to be used by the bidder. The successful bidder did not provide this information for certain pieces of equipment, but was awarded the contract when the City exercised its rights under the non-formality clause in the tender documents.
An unsuccessful bidder sued the City of Edmonton and the case went to court and eventually resulted in the SCC. The second principle to observe is that commandments must be in conformity in order to become effective. In M.J.B. Enterprises Ltd.c. Defence Construction (1951) Ltd., the court concluded that Contract “A” does not enter into force until a compliant offer has been submitted. The court also noted that Ron Engineering does not defend the idea that contract “A” is still formed. The conclusion of a preliminary contract in the context of the tender procedure depends on the terms of the tender. In addition, only compliant bidders have a remedy in case of violation of the procedure by an owner.
In Canadian contract law, Contract A is a concept recently applied by the courts with respect to the fair and equal treatment of bidders in a procurement process. Essentially, this concept formalizes previously applied precedents and strengthens the protection of those who submit tenders in the context of the tendering procedure. The concept was introduced by the Supreme Court of Canada in 1981 in R.c. Ron Engineering and Construction (Eastern) Ltd.[1] [1] The court found that an owner owed all bidders a “duty of fairness” in a tendering process. As mentioned earlier, buyers must reject offers delivered with a few seconds of delay. Imagine a supplier who is 30 seconds late to deliver their quote because the courier service is trapped in traffic. Now, imagine that it is a reputable well-known supplier with what is considered the best product on the market. If an offer is submitted 30 seconds late under Canadian law, the buyer must reject it as part of a binding procurement process […].