This article is an excerpt from Government Procurement, which is available for purchase.
In its September 2012 decision in Glenview Iron & Metal Ltd. v. Smiths Falls (Town), the Ontario Superior Court of Justice granted a motion for summary judgment after finding that the plaintiff bidder’s bid was non-compliant. The case dealt with a tender call for municipal garbage removal and haulage. The bidder made an error in filling out the portion of the pricing form that asked for a rental fee for apartment building garbage containers. As the court noted, the bidder mistakenly inserted the total cost for all of the rented garbage containers instead of inserting the requested unit cost for one container:
An issue ultimately arose between the parties concerning the manner in which the plaintiff’s bid for the monthly rental fee for garbage containers was to be interpreted.
In particular, item #4 in the Form of Bid “A” required the bidder to quote a monthly rental fee for various sized steel containers (dumpsters) to be placed at apartment buildings in the Town. The apartment building owners, who choose to rent a container, would be responsible to pay the rental fee of these containers. Item #4 set out three sizes and quantities of containers as below:Notwithstanding that the bid form was entitled “Schedule of Unit Prices” and the forms stated “$(per unit/month)” the plaintiff multiplied its unit rental price, which was intended to be $86, by the number of units referenced in the form i.e. “6 units approximately” or “10 units approximately”. The figure inserted in the plaintiff’s bid forms was $516 for the approximately 6 units and $860 for the approximately 10 units. All of the other bidders inserted the amount they would charge for a single unit. (paras. 8-10)
While the Town initially tried to let the bidder correct its error, it ultimately reversed course and rejected the bid as non-compliant. This resulted in a legal claim by the rejected bidder:
Subsequent to the closing of the bid, the Town’s employee Ms Bernicky, who was administering the bid process, telephoned an employee of the plaintiff and discussed what the plaintiff’s intention was as to the cost of rental of a single unit. It was clarified in this conversation that the plaintiff had multiplied the unit price by the approximate number of units disclosed in the bid form and that the plaintiff’s intended single unit price was $86. Ms. Bernicky was unaware that the Town was not entitled to clarify or adjust the bid to give effect to the bidder’s intention.
Ms. Bernicky deposed that in the course of this telephone conversation a representative of the plaintiff acknowledged that they had completed the form erroneously. As noted, she further deposed that she was unaware that she could not adjust for this error. If Ms. Bernicky’s evidence is accurate, the plaintiff’s bid was non-compliant and it should have been rejected. On the other hand, the plaintiff’s representative denied that their representative had admitted to any error in the bid and deposed that the conversation with Ms. Bernicky simply served to clarify what the plaintiff’s single unit cost was intended to be (i.e. $86).
In my view it is not necessary to resolve this credibility issue as to whether the plaintiff admitted to an error in its bid preparation. What is common ground is that the plaintiff did not indicate a single unit rental price on the bid form and that Ms. Bernicky and her employer, the Town, proceeded to work with the $86 figure (the plaintiff’s single unit price), which they ascertained or at least confirmed in their conversation with a representative of the plaintiff. Ms. Bernicky used the $86 per unit as the bid amount attributed to the plaintiff when preparing publically available documentation comparing the respective bids of all bidders. Proceeding in this fashion, the plaintiff’s bid was the lowest. It is not disputed that had Ms. Bernicky used the figure the plaintiff had inserted in the bid form, the plaintiff would not have been the lowest bidder. (paras. 11-13)
The court determined that the initial attempt to correct the pricing error did not cure the non-compliance since, as it noted, even obvious mistakes cannot be corrected after the bid deadline:
On the evidence the Town found itself in an unfortunate legal position resulting from its own missteps. Missteps do not equate with bad faith. In particular, the plaintiff had initially been treated preferentially by accepting the “intended” per unit price for dumpster rental at an amount of $86, thereby allowing all concerned to think that the plaintiff was the lowest bidder. The case law is clear that mistakes, however obvious, cannot be corrected after bid closing. The rationale is that the integrity of the bidding process is dependent on the complete equality of treatment among bidders. See Maystar General Contractors Inc. v. Newmarket (Town) 2009 ONCA 675 (Ont. C.A.); Vachon Construction Ltd. v. Cariboo (Regional District) (1996), 136 D.L.R. (4th) 307 (B.C.C.A) and B.A. Blacktop Kamloops v. R., 1996 CanLII 1751 (B.C.S.C.). (para. 24)
The court therefore granted the Town’s request for summary judgment and dismissed the rejected bidder’s claim. As this case illustrates, bidder non-compliance renders a bid legally incapable of acceptance and can prove fatal to any subsequent legal claims launched by the rejected non-compliant bidder. Where the facts behind the non-compliance are clear, this presents an opportunity to launch a pre-emptive strike against the non-compliant bidder’s claim and obtain a summary dismissal of the lawsuit.
