By: Paul Emanuelli
This article is an extract from the 5th edition of Government Procurement.
In its January 2020 decision in Taggart Construction v. City of Kingston, the Ontario Superior Court of Justice summarily dismissed the legal claim of a losing low bidder. The dispute dealt with a Request for Proposals (RFP) for the third phase of an ongoing construction project in Kingston, Ontario. The losing bidder challenged the award to Concoran Excavating Ltd, a contractor who had previously won the first two phases of the project and had scored highest for the third phase of the project on a combination of price and technical factors according to the RFP evaluation criteria. The plaintiff argued that the City had breached its own tendering rules by using a high-score RFP rather than a low bid evaluation process and asserted that it should have been awarded the contract as low bidder.
The Court disagreed and summarily dismissed the claim. The Court found that the plaintiff’s proposal, while containing the lowest price, scored below the winning proposal in a several of the technical factors set out in the RFP evaluation criteria. As the Court noted, while the plaintiff was approximately $1 million lower in price, its proposal had no cold weather construction plan, was weak in the areas of subsurface investigation, and proposed a longer overall construction schedule when compared to the winning proposal. The Court concluded that the technical factors in the RFP evaluation criteria supported the selection of the winning proposal over the lowest bid proposal.
Furthermore, the Court concluded that the City’s use of an RFP instead of low-bid Invitation to Tender (ITT) bidding format did not breach the City’s purchasing by-law. Rather, the use of the high-score RFP was reasonable in the circumstances given the complexity of the project and the need to evaluate non-price factors in the contract award decision:
The City of Kingston argues it was reasonable to find that the downtown Princess Street Project involved ‘unique and complex’ considerations, justifying use of RFP in place of a tender process. The City noted the Report to City Council its reasons for choosing procurement by way RFP:
RFPS are used where there is a desire to obtain problem solving techniques for strategies; where new or alternative methods, technologies, innovations or creativity are sought; where some of the outcomes cannot be clearly defined; and where there are multiple evaluation criteria on which the award will be based. The use of an RFP has allowed the City and Utilities Kingston to seek out contractors who can (a) demonstrate an in-depth understanding of the sensitivities and complexity of road and utility reconstruction work in a congested downtown core, (b) provide continued access to business, (c) provide a project execution plan that deals with special and/or unique parameters (ie aggressive project completion date, cold weather (winter ) work plan), and (d) provide a plan that identifies project risks. The consideration of these factors, including but not limited to the price bid to complete the project, represents a ‘best value’ assessment of the proposals received and has led to the successful completion of the previous Princess St. projects.
I conclude that non-price factors were deemed by the City to be important considerations in this Project, given it involved construction and disruption in the downtown core and the major street in that core, namely Princess Street. The City sought flexibility in selection of a contractor, considering these non—price factors, including disruption to citizens, shop owners and the length of the disruption and extent of disruption. I find on the evidence that proceeding by way of the ‘Request for Proposal’ was an available option to the City, pursuant to its By-Law, in this case. The request detailing a supply of service (the Phase 3 Project) could not be fully defined or specified at the time of the request. I conclude the City was justified in proceeding with the method of procurement that it did.
As the Court noted, at the time of bidding, the plaintiff was well aware that the contract would be awarded to the highest scoring proposal since the technical non-price factors were set out in the RFP:
Next, Taggart knew full well before it prepared and submitted its Proposal, the terms of the RFP and the Price and Non-Price factors the City required. Taggart participated in the RFP process fully aware that only 40 percent of the Evaluation Criteria would be based on price, while the other 60 percent of the Evaluation Criteria would be based on factors other than price. There is nothing unfair to Taggart, notwithstanding its proposed price was better than Corcoran’s.
Additionally, in concluding that the use of an RFP was appropriate in the circumstance, the Court cautioned that courts should exercise caution in second-guessing the tendering format selection decisions of purchasing institutions:
In Northland Road Services (Robson) Ltd v. British Columbia (Minister of Transportation), (2004) BCSC 595 at para 20, the Supreme Court of British Columbia considered a scenario where a contractor argued that the RFP process used by the Ministry of Transportation was illegal because it did not comply with the governing statute. The statue provided that tenders must be used unless one of a number of exceptions were satisfied. One of which was that the Minister determined that an alternative contracting process would result in competitive costs for the performance of the work. In deciding to uphold the decision to use the RFP and concluding the decision complied with the governing statute, the Court stated:
The Ministry of Transportation has clearly put a lot of thought and effort into developing the RFP process which it has used over the years to award maintenance contracts. This process clearly offers a method of securing contractors that is more flexible than the tender process. The court is not equipped to determine what alternative contracting process will produce the result desired, nor is it empowered to do so. Northland has not demonstrated any failure to comply with the statutory requirements in establishing the RFP process.
I conclude that the RFP process used by the City of Kingston offered a method of securing contractors that was more flexible than the tender process. I also adopt the dicta in Northland, the court is often not equipped to determine what alternative contracting process will produce the result desired. Courts ought to be cautious about interfering in Municipal decisions on procedure for procurement, whereas here, flexibility and non-price factors are deemed important both subjectively, but also objectively.
Finally, the Court found no flaws in the manner in which the proposals were evaluated, and rejected the plaintiff’s assertion that the incumbent bidder was given an unfair advantage in the evaluation because its past performance on the prior stages of the project was taken into account in scoring the new proposals. As the Court noted, the fact that incumbents may enjoy certain inherent advantage does not automatically mean that the bidding process is unfair:
I find there is no evidence that the evaluation procedure established by the City in the RFP was either unfair by design, or that the evaluators individually or together unfairly treated the Plaintiff proposal.
The evaluation criteria were clearly set out in the RFP.
Corcoran’s experience was properly considered on Phases 1 and 2 of the Project. The RFP required that proponents provide their experience on similar projects. The City was entitled to consider Corcoran’s previous work on the first two phases as ‘similar’. Incumbents are not entitled to special treatment, but there can be legitimate inherent advantages which factor against the absolute equality of opportunity between incumbents and other bidders: see P. Emanuelli, Government Procurement, 4th ed (Toronto: LexisNexis, 2017) at 683-684.
As this case illustrates, the defensibility of an evaluation and award decision turns on the transparency of the evaluation criteria relied on in making a contract award. Where the bidding rules are clear and the evaluation criteria specify that the contract will be awarded to the highest score, this will typically serve as an effective response to low bidders who later claim that they should have been awarded the contract based solely on price considerations.
