Lost Profits Declined to Lowest Bidder

By: Anna Krol

In its June 2018 decision in Miller Group Inc. v. Village of Salisbury, the Court of the Queen’s Bench of New Brunswick dismissed an action by a rejected low bidder that claimed it was unfairly rejected on the basis of undisclosed evaluation criteria. The case dealt with a public opening of a tender for winter maintenance services in the Village of Salisbury (the “Village”).

After tenders were opened, the complainant was identified as the lowest bidder and believed it would be awarded the contract. However, the Village decided to award the contract to the second lowest bidder as the price difference between the two was $824.00 and within the allowed ranges under the New Brunswick Procurement Act for awarding to the second lowest bidder. The Village chose to exercise its tender call privilege clause, which stated that the lowest bidder would not necessarily be accepted.

The court dismissed the action and declined to award lost profit damages to the complainant. The court took the view that the Village was within its right to consider more than the price within the bid and to exercise its right to bypass the low bidder when the difference between the lowest and second lowest bid is small.