In its decision in the case of Tri-Gil Paving and Construction Ltd., the Nova Scotia Court of Appeal concluded that an owner is entitled to revisit its original finding of compliance and reject a non-compliant tender. The case involved a tender call for a highway construction project by the Nova Scotia Department of Transportation.
The formal bidding process is governed by a notional contract that is referred to by the courts as “Contract A.” The creation of Contract A is the fundamental question in the tendering process. Only those bidders who submit a compliant bid form Contract A with the owner and are legally eligible for consideration by the owner. Contract A never forms with those bidders who fail to submit compliant tenders. As the following case illustrates, this non-compliance renders the bidder legally ineligible for award of the tendered project.
In its decision in Tri-Gil Paving and Construction Ltd. v. Nova Scotia (Attorney General), the Nova Scotia Court of Appeal upheld the trial judgment and concluded that an owner is entitled to revisit its original finding of compliance and reject a non-compliant tender. The case involved a tender call for a highway construction project by the Nova Scotia Department of Transportation. The plaintiff was a low bidder at the public opening of the tenders and was advised by the Department of the Minister’s intention to enter into a contract. However, the Department then discovered that the low bidder had submitted an incomplete and non-compliant tender. The contract was never awarded. The low bidder sued.
In the trial decision, the Nova Scotia Supreme Court noted the lack of rigour in the procurement process:
“The whole situation is like a comedy of errors. The very items listed in Addendum 1 for Proposal 2 were already included in Proposal 1 and the plaintiff had given its price for those items. As to why it had not included Addendum 1 in Proposal 2, the plaintiff’s estimator, George MacIntosh, indicated, he was ‘concentrating on asphalt paving’ and he ‘just missed it,’ it was an oversight.”
As to the signing of all the letters, Donald MacIntosh, testified that all the letters were on his desk on November 13 and he “just signed them without checking.”
<0x2026>[n]o actual work had begun on clearing before receipt of the telephone call advising that the plaintiff did not have the job. The only other thing done by the plaintiff up to this time was to attend the regional job meeting on the morning of November 15.
While the Court of Appeal was critical of how the Department handled its selection process, if found that the Department’s mistake could not render the non-compliant tender compliant. As the Court of Appeal explained, the bidder failed to accept the Department’s Contract A offer and this failure proved fatal to its claims:
Simply stated, a tender call is a request for offers and when such offers are made in conformity with the tender terms, they constitute irrevocable unilateral offers, which when accepted constitute a completed contract. Within the environment of the tendering process, where fairness and equal treatment to all tenderers has become the rule, the offer, to be a valid offer, must comply with the request for the offer, i.e. the tender call.
Applying the simple yet most basic principles of contract law to the facts here, the plaintiff must fail as there never was an offer in the first place as the actual offer of the plaintiff was not the offer called for by the defendant in its request for an offer, i.e. it did not comply with the terms and conditions demanded.
Without an offer there can be no contract as there was, in law, nothing to accept.
Notwithstanding the initial “award letter”, the Department’s decision to reject the plaintiff’s tender was upheld due to the low bidder’s non-compliance.
Paul Emanuelli’s procurement law practice focuses on all aspects of the tendering cycle including bid dispute resolution. This article is extracted from his Government Procurement textbook published by LexisNexis Butterworths. Paul can be reached at paul.emanuelli@procurementoffice.ca.
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