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Procurement Perspectives: The process related to an alternate bid being submitted

Stephen Bauld
Procurement Perspectives: The process related to an alternate bid being submitted

Where an alternate bid is submitted without the withdrawal of a prior bid made by the same contractor, it is assumed that the bidder intends to make either offer, and that the city may accept whichever it prefers.

It is a common condition that bids may not be altered or amended in any way after closing of tender. Whether or not such an express term applies, the obligation to submit a bid in conformity with the guidelines, plans and specifications falls on the bidder.

The courts are particularly concerned to ensure that the integrity of the process is preserved. So, for instance, where mistakes are made by a bidder in preparing a bid, the bidder will still be required to adhere to its bid.

Indeed, it is the prerogative of the contractor to quote its own price and there is no authority on the part of the potential customer to revise the price merely because it believes that the quoted price was in error.

Ordinarily, the secrecy of the tendering process is crucial to its intended function. Accordingly, unless the tender guidelines otherwise provide, it is not normally permissible for a bidder to make an oral amendment to its written bid.

Any general rule against an amendment after the closing of tenders when applied to extreme sets of facts is problematic.

In Vachon Construction Ltd. vs. Regional District of Caribou, tenders were invited in connection with a construction project.

When the first bid was opened, a discrepancy was found between the price as stated in words and the price as stated in figures. The bidder’s representative was permitted to amend the bid by selecting the lower amount.

The revised bid turned out to be the lowest bid and the contract was awarded to the bidder concerned. The plaintiff was the next lowest bidder, whose bid exceeded the higher of the two amounts as originally stated in the successful bid.

The action was dismissed and the plaintiff appealed to the British Columbia Court of Appeal.

There, it was held that the original bid by the successful bidder was invalid due to uncertainty. The price was an essential element of the contract and since the price offered by that bidder was not clear, the bid was not an offer to contract that was capable of being accepted.

The instructions governing the tender permitted amendments to a submitted offer, but only if received in writing prior to the closing of the tender.

In the view of the court, by permitting the late amendment, the defendant purchasing authority was in breach of its duty of fairness.

In a concurring judgment, Williams J.A. explained: “The tendering process is, and must always be, a carefully controlled process, since the opportunity for abuse or distortion is ever present. While that is not what happened in this case, the process must nonetheless be, and be seen to be, fair to all bidders. For this reason, the process is often attacked for technical reasons and the law has accordingly applied strict rules for any alternation in the process by both bidder and owner.”

This line of reasoning does very little to explain the court’s conclusion, which even Williams J.A. accepted was not in accordance with common sense.

While it is true that the law does sometimes seem to fly in the face of common sense, little is to be gained by requiring it to do so absent some compelling justification.

Where it is argued that a rule of law will have a counter-intuitive result (i.e., will run contrary to common sense), the burden should logically fall on the person alleging that such a rule governs to provide both the existence of the rule and a clear justification for applying it in the counter-intuitive manner.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.

Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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