This article is an excerpt from the 2023 edition of The Art of Tendering: A Global Due Diligence Guide.
This discussion summarizes government procurement case law developments in the Caribbean, highlighting how the courts have enforced global public procurement standards and regulated public institutions in the region by using both contractual lost profit remedies and administrative law procedural remedies.
In its March 2000 decision in Star Telecommunications Company Limited v. Trinidad, the Trinidad and Tobago High Court of Justice upheld the government’s decision to reject the plaintiff’s late tender. The case involved a Request for Proposals for licences to provide a cellular telecommunications system for Trinidad and Tobago. After a detailed consideration of the evidence, the Court determined that the bidder’s representative arrived late at the bid submission office. The case highlighted the high level of scrutiny that can apply to bidding procedures.
In its May 2001 decision in Caribbean Communications Network Limited v. The Attorney General of Trinidad and Tobago, the Trinidad and Tobago Court of Appeal upheld a trial judge’s decision that found that the Prime Minister’s negative public remarks about a proponent constituted an apparent bias that compromised the evaluation process and prejudiced the proponent’s right to an impartial evaluation. The case highlighted the importance of avoiding political interference in the bid evaluation and award process.
In its December 2003 decision in Pratt Contractors Ltd. v. Transit New Zealand, the Judicial Committee of the Privy Council recognized that the duty to evaluate tenders fairly and in good faith is an integral term of the tendering process under the Contract A process contract. This case set a precedent across the Commonwealth Caribbean by recognizing the “Contract A” process contract that can give rise to lost profit claims by losing bidders.
In its March 2004 decision in Moores Air Express Services Limited v. The Postmaster General, the Supreme Court of Jamaica upheld the government’s rejection of a late bid that was submitted by a long-term incumbent. The case dealt with a tender call by the Jamaican Postmaster General for the provision of mail transportation services. The legal challenge was launched over the rejection of the incumbent’s bid, which it had attempted to submit on behalf of a large group of mail contractors across Jamaica. This case provided another example of the strict due process standards that apply to public bidding procedures.
In the March 2006 decision of the Trinidad and Tobago Court of Appeal in NH International (Caribbean) Ltd. v. Urban Development Corporation of Trinidad and Tobago, the government’s urban development agency successfully defended itself against a legal challenge by a losing bidder. While the Court of Appeal determined that the agency was a public body and therefore potentially subject to judicial review, it determined that the contract in question lacked a sufficient public element, in the absence of allegations of fraud, corruption, or bad faith, to attract a judicial review of the agency’s commercial activities.
In its February 2007 decision in Massai Aviation Services & Anor v. The Attorney General & Anor (The Bahamas), the Judicial Committee of the Privy Council found The Bahamas liable for breach of contract in an airport development deal after the government awarded rights to run an airport to a winning bidder without first securing the required rights over the airport facilities from existing operators. The case underscored the importance of proper project planning to confirm the authority of a project team before engaging in a bidding process.
In its November 2009 decision in National Transport Co-operative Society Ltd v. The Attorney General of Jamaica, the Judicial Committee of the Privy Council found the Jamaican government liable for improperly terminating a bus transportation services contract that was awarded pursuant to a tendering process. A dispute arose with the contractor over service rates, which led to an arbitration ruling against the government. The government improperly relied on its original lack of statutory authority to terminate the tendered deal and was found liable for the improper termination.
In its April 2014 decision in Zephyr Services Limited v. Ministry of Forestry, Fisheries and Sustainable Development, the Supreme Court of Belize found that the government imposed hidden requirements on a top-ranked proponent during contract award negotiations. These new requirements resulted in higher bid costs. Citing budgetary constraints, the government then denied the proponent an award. The Court found that this breached the legitimate expectation of award under administrative law rules and entitled the proponent to lost profits under private law contractual remedies.
In its October 2015 decision in The Central Tenders Board & Anor v. White (t/a White Construction Services) (Montserrat), the Judicial Committee of the Privy Council upheld prior lower-court rulings that found the government of Montserrat liable for improperly rescinding a contract award. The dispute involved a construction contract that was awarded to the low bidder pursuant to a public tendering process. The trial and appeal courts both found the government liable for improperly rescinding the deal when a losing bidder challenged the initial award decision. The Privy Council upheld those rulings.
In the September 2016 ruling in Tropical Orchard Products Company Limited. v. The Ministry of Education, Guyana’s bid protest committee upheld a complaint and annulled an evaluation decision after finding that the government unlawfully relied on undisclosed past performance criteria. The case involved a solicitation for boxed juice for schools. The complainant’s bid was deemed non-responsive due to past performance issues, including expiry dates and spoilage. However, after relying on a series of Canadian and UK decisions, the Committee ruled the evaluation breached the Procurement Act and was therefore void.
In its July 2016 ruling in Cevons Waste Management v. The Ministry of Communities, Guyana’s bid protest committee upheld the award of a waste management contract to the lowest compliant bidder. A competing bidder launched a bid protest, arguing that the low bidder’s price was too low and that it should have been awarded the contract due to its superior technical proposal. The Committee disagreed, noting that the Procurement Act required that bids be awarded accordance with the criteria specified in the bid solicitation, which in this instance held that the award would go to the lowest bidder.
In its July 2016 decision in Lutchmeesingh’s Transport Contractor’s Limited v. National Infrastructure Development Company Limited, the Trinidad and Tobago High Court of Justice recognized the application of the Contract A process contract to the challenged tendering process. However, the Court ultimately rejected the bidder’s claim after finding that the government was under no duty to provide reasons for terminating contract award negotiations when the parties failed to reach an agreement on price.
In its July 2020 decision in Attorney General of the Virgin Islands v. Global Water Associates Ltd, the Judicial Committee of the Privy Council found the British Virgin Islands liable for improperly terminating a long-term arrangement for the design, construction, and operation of a water reclamation treatment plant. The Government failed to provide a properly prepared project site for the installation of the plant. It was therefore found in breach of development agreement and liable for the contractor’s reasonably foreseeable lost profits.
In its July 2020 decision in Gorstew Limited v. The Contractor-General, the Supreme Court of Jamaica ruled that the Office of the Contractor-General (OCG) did not have the jurisdiction to investigate government land sales or land purchases since those contracts fell outside of Jamaica’s procurement statute and outside of the OCG’s procurement review powers. This case underscored a regulatory gap in Jamaica’s contracting practices.
As these case law developments illustrate, public institutions in the Caribbean remain subject to the same standards and the same remedies as public institutions in other regions. Future case law rulings in the region will likely serve to further harmonize Caribbean due diligence standards with those broader global standards.
