Procurement Law – Latest developments in

contract law / competitive bidding

18th Annual BC Institute PMAC Workshop

Presented by Roy Nieuwenburg

October 6th - 8th, 2010

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The Buffalo Bill Dam on the Shoshoni River at Cody, Wyoming.... 

 

downstream face of the dam and those dots are big horn sheep WALKING ACROSS IT.  They're licking the surface - salt, maybe?  Wow..

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Outline

– overview of what we will do in today’s session

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no small expectation for today: ☺

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first,

any burning questions?

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Biggest case this year:

Tercon Contractors Ltd. v. The Province of BC – Supreme Court of CanadaFebruary 22, 2010

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Why is the Tercon case important?

An exercise:

–the “Tender Trap”

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What can you do to manage risk in competitive bidding processes?

The three lines of defence etc. • (later, if we have time)

Sample language• (later, if we have time)

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The Tercon case - a brief description

• Brentwood asked the Province if Brentwood could submit a bid as a joint venture with Emil Anderson Construction

• what exactly was the egregious conduct in Tercon?

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What I take from the Tercon case

Since bidding and tendering is inherently risky, you need to build in flexibility language

“There is nothing inherently unreasonable about exclusion clauses.”

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“… a court has no discretion to refuse to enforce a valid and applicable contractual exclusion clause unless the plaintiff (here the appellant Tercon) can point to some paramount consideration of public policy sufficient to override the public interest in freedom of contract … ”

The Tercon case - a brief description - cont’d

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The Tercon case - a brief description - cont’d

If you choose to contract out of "The Contract A – Contract B framework", you can.

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bottom line:

IT'S FOGGY OUT THERE, SO DRESS FOR IT

business as usual

The Tercon case - a brief description - cont’d

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Airport Authority and Budget Rent-a-Car case

• Clark Wilson LLP’s wording upheld– no “Contract A”– subject to authorized signatories

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Continental Steel Ltd. v. Mierau Contractors Ltd. and

James A. Brown Ltd. v. Caisse Populaire Welland

“reasonable exercise of business judgement” upheld

– “the disparity between … ” - tab J

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Is Your General Contractor Covered?

• might not cover Progressive for the cost of fixing the deficiencies that led to the water ingress, they would cover the resulting rot, infestation, and deterioration.

• reasoning would also apply to CGL policies held by developers and construction managers (not just contractors)

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TILMA expands to Saskatchewan

New West Partnership Trade Agreement

Tylon Steepe Homes Ltd. v. Pont 2009 BCSC 253

BUILDERS LIENS

no need to post any additional funds – i.e.

10 – 15% - to stand as security for costs

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Hub Excavating Ltd. v. Orca Estates Ltd. 2009 BCCA 167

• No Duty to Assess Feasibility of Project Before Tendering

• Hub: owner knew or should have known at the outset that the project was unfeasible and so they breached their duty of fairness to Hub by calling for bids

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Sample language for RFP

• “fax sent from kinkos” example• “you can’t differentiate among prequalified

bidders” example/• no contract A• limitation of liability (to manage / mitigate

“the tender trap”• etc.• etc.

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compliance assessment and bid evaluation

It is my pleasure to provide you with the photo image that I used to visualize the difference between compliance assessment and bid evaluation in my presentation Tender Anomalies at MHPM’s professional development day 2010.

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… the difference between compliance assessment and bid evaluation …

Regards,  David Todtmann,

MHPM PROJECT MANAGERS INC. M.Prop.Dev., Dipl.Ing. Architecture, PMP, LEED APProject Manager | Pacific

THANK YOU

Questions or Comments:

Roy Nieuwenburg, Clark Wilson LLPran@cwilson.com | 604.643.3112

www.cwilson.com