This article is an extract from the 5th edition of Government Procurement.
In its March 2018 decision in Maglio Installations Ltd. v. The Corporation of the City of Castlegar, the British Columbia Court of Appeal upheld a trial court’s finding of liability against the City of Castlegar for awarding to a non-compliant bid. The dispute dealt with a bidding process to award a contract for the construction of a recreational swimming area. The tender call required bidders to submit preliminary construction schedules. The City awarded to the low bidder even though that bid was missing the required schedule.
While at trial, the City argued that that the missing project schedule was a minor irregularity that could be waived, however the trial court ruled that this was a material defect in the low bid. The trial court also ruled that the City breached the tendering rules by awarding to a non-compliant bid, and that the competing bidder should be awarded its lost profits because of that breach.
The Court of Appeal agreed with the trial court’s ruling, finding that the privilege clause in the tender call did not give the City the right to waive material non-compliance.
As this case illustrates, asking for non-price information in a low-bid tendering process without defining the significance of that information leaves the process open for bidders to challenge the compliance of competing bids that fail to provide that non-price information. Purchasing institutions should carefully define the significance of all information that is requested during a tendering process to guard against after-the-fact arguments regarding whether that information was properly used by evaluators in their award decisions.
