October 10, 2012

Bid Protest Bulletin | Paul Emanuelli

Bidder who missed pre-bid site meeting rejected

In its October 2010 decision in Admiral Roofing Ltd. v. Prince George School District No. 57, the British Columbia Supreme Court upheld a school district’s decision to reject a low bidder who was late for a mandatory pre-bid site visit.

The case dealt with a tender call for roofing work. The process rules included a mandatory pre-bid site visit starting at 8:00 a.m.:

A mandatory site tour for general contractors will be held on May 14, 2009 at 8:00 a.m. beginning at South Fort George Family Resource Centre located at 1200 Lasalle Avenue and immediately followed by Central Fort George School located at 2955 Third Avenue. Agents must register their presence with the owner of the site tour stating the name of the contractor they represent. Failure to attend and register will lead to the non-acceptance of the tender by the owner.

The school district representatives waited until 8:05 for prospective bidders to arrive and then proceeded with the tour. The representative for Admiral Roofing arrived at 8:15 and missed part of the tour. The school district’s purchasing manager notified Admiral Roofing that it would not be eligible to bid because it missed the mandatory site visit.

Notwithstanding this pre-bid notification, Admiral Roofing submitted a tender and was the low bid. After its bid was rejected Admiral sued, arguing that it should have been allowed to bid since it had attended part of the tour and since the mandatory site visit requirement was vaguely drafted in the tender call. The court disagreed, finding that the mandatory site visit requirement was clear and that Admiral had failed to satisfy it.

Admiral also argued that the breach, if any, was minor or technical in nature and that the school district should have exercised its discretion under its privilege clause to waive the non-compliance and accept the bid. The court disagreed. It found that the breach was material and that the discretion afforded to purchasers under a privilege clause should be interpreted narrowly when dealing with tender compliance issues:

I am satisfied that the approach to the issue of compliance is as follows:

1. Read the terms of the tendering documents to determine the owner or tendering authority’s scope of discretion to waive defects.

2. Where there is a discretion clause or some indication that there is discretion to waive non-compliant bids, the default test is the material non-compliance analysis from Graham Industrial.

3. Identify the defect and assess its importance to the terms of the invitation.

4. If the omission or defect is essential, the materiality of that defect to the owner’s decision-making process is measured objectively. In assessing the consequences of the defect, take into consideration the objectives underlying the tendering process as a whole and the reasonable expectations of the parties, particularly the other bidders in that process. If the defect undermines fairness of the competition or the process of tendering <0x2026> impacts the cost of the bid or the performance of contract B <0x2026> or creates a risk of action by other (compliant) bidders <0x2026> the bid at issue will be materially non-compliant. [References omitted]

I have concluded that there was not a discretion available to the defendant to waive a defect of non-compliance of the mandatory site meeting clause.

As this case illustrates, purchasers should be careful to clearly draft their procedural requirements and, once established, should strictly enforce those requirements since they have limited discretion to waive them. For their part, bidders should not assume that they will be granted indulgences when they fail to strictly follow the prescribed rules.

Paul Emanuelli's procurement law practice focuses on all aspects of the tendering cycle including bid dispute resolution. This article is extracted from Emanuelli's Government Procurement textbook published by LexisNexis Butterworths. Reach Paul at
paul.emanuelli@procurementoffice.ca.

Print | Comment