This article is an excerpt from Government Procurement, which is available for purchase.
In its November 2013 judgment in 1634584 Ontario Inc. v. Canada (Attorney General), the Ontario Superior Court of Justice granted the federal government’s application for summary dismissal of a lawsuit filed by a rejected bidder. The case dealt with a Department of Public Works and Government Services tender call for the lease of office space in Peterborough, Ontario. The government determined that all of the initial bids were non-compliant and decided to cancel the process and retender. The plaintiff, 1634584 Ontario Inc., had submitted a bid on the initial cancelled process but decided not to bid on the retender. Instead, it sued for $4 million in lost profits over the initial cancellation. The government brought a motion for summary judgment, arguing that the plaintiff’s bid was non-compliant, that its claim therefore could not succeed and that its lawsuit should accordingly be dismissed. The court agreed. It found that it could assess the case based on the summary motion documents and that there was no need for the matter to proceed to trial:
39 In this case, the issue is whether PWGSC breached its duty of fairness and good faith owed to 163 by the manner in which it administered the tender. The evidence 163 relies on to show bad faith is that PWGSC disqualified 163’s bid despite 163’s commitment to develop the leased premises on time; clarification was not sought from 163 regarding the severance condition in its APS contrary to DOJ-Legal’s advice; Winterstein forwarded emails inquiring about Farhi’s bid; PWGSC failed to communicate acceptable APS conditions and the winning bidder would be awarded tenant improvement work; and Ellis chose not to answer whether she agreed with the decision to disqualify 163 on cross-examination.
40 PWGSC’s evidence that it administered the tender properly and fairly is contained in the Tender Package (which establishes the rights of PWGSC and the duties and obligations between the parties); 163’s APS; Ellis’ confirmation that she did not feel comfortable with Farhi; and other tender-related documentation suggesting that another bidder would have won the first tender if the bids were accepted.
41 Based on the record before me, there is little, if any, conflicting evidence requiring multiple findings of fact. There are limited witnesses, the nature of the allegations is straight forward, and the issues can be appropriately resolved upon review of the Tender Package. The trial process, in my view, given that this is a document-driven case, it is not necessary for a motions judge to become familiar with the duty of fairness issue.
42 The relevant, key evidence necessary to make a determination is largely preserved in written form in the record. This consists of 163’s APS; the Tender Package; the communications of PWGSC, DOJ-Legal, 163, and Farhi; as well as the cross-examination transcripts of Ellis. Oral evidence of all individuals involved with the tender process including employees, managers, and supervisors is not, in my view, necessary in order to reach a decision.
The court’s summary dismissal determination turned on whether the rejected bidder’s tender was non-compliant. While the government’s solicitation document reserved the right to seek post-bid clarifications, the court concluded that this reserved right did not place the government under a positive legal duty to seek clarifications about information provided in a bid:
46 Flowing from PWGSC’s receipt of bids, PWGSC had a clear duty to treat all the bidders in the tender process fairly and equally. This, in my view, does not, however, mean that PWGSC owed a specific duty to properly evaluate and understand 163’s bid nor does it mean that PWGSC was required to seek clarification from 163 regarding the severance condition. Since section 10.1 of the Invitation gives PWGSC the choice to seek clarification about any information provided by bidders, PWGSC’s choice not to follow up with 163 was within their discretion. The advice from DOJ-Legal stated that PWGSC could seek clarification from 163, not that PWGSC was, in fact, required or obligated to seek such clarification. This is an important distinction.
The court ultimately agreed with the government’s assessment that the plaintiff’s bid was non-compliant since, among other things, it contained conditions or qualifications to the requirements set out in the tender call document that rendered it non-responsive. As this case illustrates, tender non-compliance can serve as a complete answer to a rejected bidder’s claims and, when that non-compliance is clear on the written record, can be the basis for a successful summary dismissal by a defendant purchaser of a rejected bidder’s claim.
