This article is an extract from the 5th edition of Government Procurement.
In its November 2020 decision in Stericycle ULC v. HealthPRO Procurement Services Inc., the Ontario Superior Court of Justice dismissed a losing bidder’s allegation that the purchasing institution awarded a contract to a non-compliant bidder. The court ruled that the requirement in question was a post-award performance standard and was therefore not subject to a bid evaluation challenge.
The dispute dealt with a two-staged tender call process for the provision of hazardous and non-hazardous waste management services. HealthPRO Procurement Services Inc. (“HealthPRO”), a health sector group purchasing organization, ran a pre-qualification process. It then conducted an invitational second-stage bidding process with the short-listed proponents and awarded a primary supplier contract to Daniels Sharpsmart Canada Limited (“Daniels”) and a secondary supplier contract to Stericycle ULC (“Stericycle”).
Stericycle challenged the evaluation and award process, alleging, among other things, that HealthPRO engaged in bid repair when it awarded the primary supplier contract to Daniels. As the court noted, in its first-stage pre-qualification submission, Daniels confirmed that it was in the process of commissioning a waste management facility in British Columbia that would be fully functional by the contract start date. Stericycle argued that the tendering rules required that the facility be operational at the time of bid submissions and maintained that Daniels should have been disqualified since it did not have an operational waste management facility in place at that time.
However, the court disagreed with this interpretation of the tendering rules, stating that “the fact that Daniels did not have certain required permits and licences in place to perform the required services at the time of the bid is irrelevant.” As the court concluded, the tendering terms did not require that permits or licences be in place at the time of bid submission. Furthermore, the court concluded that HealthPRO did not have an obligation to investigate and confirm that such permits were in place at the time of bid submission and that it was allowed to accept Daniels’ bid representations at face value without further investigation.
As this case illustrates, purchasing institutions should clearly define the requirements that need to be complied with at the bid submission deadline and distinguish those requirements from post-contract-award performance requirements since the validity of contract award decisions can turn on this distinction.
