This article is an excerpt from the 2021 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its July 2020 decision in Facchini v. Canada (Attorney General), the Ontario Court of Appeal rejected the appeal of a trial court decision to summarily dismiss a contractor’s negligent misrepresentation claim against the federal government. The dispute involved a federal Request for Standing Offer (RFSO) for the award of multiple contracts for the provision of real estate advisory services. The government advised prospective bidders that subcontractors could appear in more than one bid and that contractors could also appear as consultants on other bids. The plaintiff responded to the bidding opportunity but was then charged, along with another company, with bid-rigging under the Competition Act after the government found identical sections and other similar content within the two bids. The other company pleaded guilty to bid-rigging, but charges against the plaintiff were ultimately stayed. The plaintiff, whose charges were reported in the press, sued the government and the government employee involved in the process for misrepresentation and defamation and sought $2 million in damages.
After the trial court dismissed the claim, the Court of Appeal upheld that dismissal, finding that the government owed no duty of care to the bidder and that the representations permitting involvement in multiple bids did not constitute permission to breach the Competition Act and allow one bidder to draft the content of another bidder’s bid. The Court of Appeal also upheld the trial court’s dismissal of the defamation claim, finding that the plaintiff had failed to show the required malice on the part of the government employee in question. As this case illustrates, competition rules prohibit improper collaboration between bidders. When giving guidance to bidders on permissible bidding conduct, public institutions should exercise caution and remind bidders that they should seek their own legal advice and need to satisfy themselves regarding compliance with bid-rigging rules.
