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Legal Notes: Tough love in the tender process

John Bleasby
Legal Notes: Tough love in the tender process

There is no room for allowances when it comes to the tender process.

All requirements set out in the tender package must be adhered to completely. Failure to comply, even in the slightest degree, could result in the bid being rejected.

Anthony Burden, a partner with Field Law LLP in Calgary, and student-at-law David Di Gianvittorio, write, “this ensures that all bidders are treated fairly – the overarching purpose of the public tender process.”

They reference the dispute between Redwood Construction Ltd. and Memorial University of Newfoundland, as ruled by Justice Peter O’Flaherty of the Newfoundland Supreme Court.

Burden and Di Gianvittorio point out the critical matter of contract types applicable when public bodies issue an open call for tenders for construction contracts. This was first set out by the Supreme Court of Canada in the 1981 decision, R. v. Ron Engineering & Construction (Eastern) Ltd.

“Contract A refers to the contract between the bidder and the public body when the tender is submitted. Contract B refers to the construction contract awarded to the winning bidder.”

Redwood put together its bid in response to an “Open Call Documents” issued by Memorial University. The university was seeking bids to build a four-storey building on its campus, and set a 3 p.m. deadline for bids.

Redwood submitted right on the 3 p.m. deadline, however, its bid was missing three pages, something it attributed to an “electronic glitch, through no fault of its own.”

One of these missing pages was to include a signature of an authorized Redwood representative formally expressing consent to be bound by the terms set out in Contract A. Ten minutes later, Redwood corrected these omissions.

Memorial rejected Redwood’s bid, saying it was legally obligated to reject the bid because it was non-compliant.

Redwood sued on the basis that all terms and requirements were met in the original transmission and that a signature should not be required since it was an authorized representative, Dale Peddle, who had transmitted the bid electronically.

On the first matter, the court rejected Redwood’s submission that its 3 p.m. bid was compliant because it contained “all essential elements necessary” to bind the parties to Contract A, despite missing three pages and the signed bidder contact page.

“The ‘essential terms’ of a compliant bid are all the mandatory terms and conditions which the public body dictates that the bidder must meet,” the court said.

On the matter of signatures, Burden and Di Gianvittorio write, “After reviewing the tender package, the court further stated that the signature requirement was a mandatory term of Contract A, the absence of which would invalidate a bid.”

“The reason for the signature requirement is clearly to ensure that, upon acceptance of the lowest compliant bid by Memorial, a binding obligation on the bidder would arise to enter into the terms of Contract B,” the court said.

Regarding Redwood’s claim that transmission of the bid by an authorised Redwood representative should be sufficient to meet the signature requirements, the court again said, “No.”

“Although the tender package allowed for electronic consent as an alternative to an actual signature,” Burden and Di Gianvittorio write, “the fact that an authorized representative electronically submitted Redwood’s bid did not satisfy that requirement.”

The transmission also did not contain any words of consent or confirmation responsive to the purpose of the signature requirement.

“There was no evidence provided by Redwood to show that Dale Peddle was an authorized signatory of the Redwood Bid on August 27, 2020, at 3 p.m. The only evidence on the point stated that he was the ‘official contact,’” wrote Justice O’Flaherty. “It was therefore not in my view a form of electronic consent.”

Redwood’s bid was therefore deemed non-compliant and Memorial was legally obligated to reject it.

“Tough love” is how Burden and Di Gianvittorio characterize the decision.

“While this may seem unfair, ensuring rigid compliance with all requirements of the tender package provides a level playing field where all bidders know that they will be treated the same.”

John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments Legal Notes column ideas to

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