TRAINING.

Overview

After participating in this course, you will be able to:

• Understand the essential legal principles governing tendering
• Know when a bid is non-compliant and cannot legally be accepted, and know when an owner can reject a low compliant bid
• Evaluate tenders fairly to minimize claims from unsuccessful bidders
• Understand the role of the architect or engineer in the tendering process and their potential legal liability
• Know what clauses an owner must have in its tender documents to limit liability and minimize claims

Description
Canada's adoption in 2017 of both the Comprehensive Economic and Trade Agreement with the European Union and the Canada Free Trade Agreement among Canadian Provinces and Territories, as well as other inter-Provincial and Territorial trade agreements, have significantly changed the practice of Public Sector Procurement.

This is the most significant change to Tendering Law across Canada since the Supreme Court's 1981 decision in Ron Engineering.

New rules, new remedies, and new technologies require a clear understanding. Contractors will have to know how to avoid bid rejection and their rights to a post-bid debrief and, if necessary, to protest owner misconduct. Owners will have to know the rules limiting their flexibility in designing procurement invitations and performing bid evaluations, their disclosure obligations under debriefing provisions, and the remedies under a successful bid protest that might hinder or delay the project.

Who Should Attend
Project Officers and Managers • Construction Managers • Consultants • Business Owners • Operations Managers • Municipal Engineers

Please note: You can check other time zones here.

Syllabus

Introduction to Tendering

• What is tendering?
• Pricing
• Set Price
• Negotiated Price
• Competition
• The financial rationale
• Tenders as a form of Auction
• Auctions
• Auction Strategy
• The political rationale
• Public v Private Sector
• History of Construction Procurement
• Terminology: tenders, RFPs, and other terms of art
• Some international perspective

Introduction to the Law of Tendering (The Theory)

• The legal rules governing tendering
• The Hierarchy of Rules
• Treaties, Statutes, regulations, by-laws, and policy
• [can mimic/adapt rules from both public law and private [common] law]
• Government Regulation by Treaty Internationally and Federally
• NAFTA and CETA
• Government Regulation by Treaty Within Canada
• CETA, CFTA, NWPTA, etc.
• Government Regulation by Statute
• Judicial Regulation Under Common Law
• Public Law – Judicial Review under Administrative Law
• Private Law – Contract
• Private law applies to public entities
• Remedies under contract law
• How the law resolves conflicts between different sources of legal rules

Rules Established by Canadian Adoption of Trade Agreements

• Why trade agreements are the main source of rules now
• How the Trade Agreement Rules Supersede and Overwrite the Traditional Canadian Contract Law-Based Tendering Regime
• Statute, regulation, and bylaw rules (in some jurisdictions)
• the details (in what jurisdictions and what rules)

The Practice of Tendering – Step One: Before the Bids Are Opened

• What Are the Rules of Procurement Design Now?
• Choosing the Best Option
• Traditional firm bids, negotiated tenders, electronic tenders
• The exceptional and risky option: limited tendering
• Using the Right Technology
• Paper or electronic or a combination of both
• Document preparation - best practices
• Establishing appropriate evaluation criteria
• Practices to protect against conflict of interest
• Prequalification - letting in the good suppliers
• Bidder barring - keeping out the bad
• Bid amendment and withdrawal
• Time and place of bid submission
• Bid security - what’s the point, and what are the options?
• Third-party regulation and review before bidding closes

The Rules, Step Two: Opening and Evaluating Bids

• Time is of the essence
• late bids must be rejected
• one unique scenario where a late bid must be considered
• determining whether the bid is late or not
• The threshold issue – Bid Compliance
• Owner’s obligation to reject non-compliant bids
• Determining compliance - a minimum requirement
• Strict versus substantial compliance
• The most important issue: when must an owner reject a bid as non-compliant versus when may an owner accept a bid with a non-material irregularity
• Limits to the owner’s discretion
• 99 Problems with bids
• How to fairly evaluate bids
• the inability of the contractor to force the owner to exercise discretion
• the right to reject all tenders
• when can an owner reject a low compliant bid?
• Special cases - because anything can happen
• what if all tenders are over budget?
• only one bidder
• tied bids
• Scoring bids on multiple criteria
• Best practices
• Worst practices
• Where post-tender negotiation is available
• Options
• Best practices
• Abnormally low bids
• The process that must be followed before awarding a contract to a bidder with an abnormally low bid
• What constitutes an abnormally low bid?
• How this aspect of trade agreements reverses almost 40 years of Canadian tendering law

The Rules, Step Three: Awarding the Contract

• Disclosure of Bid results
• Mandatory disclosure of bid results and details under Trade Agreements
• Public notice
• Losing bidders’ right to a debriefing
• Potential additional disclosure
• Freedom of Information legislation
• In the litigation process

The Rules, Step Four, Hopefully Rarely-exercised, Bid Challenges

• Bid challenges in theory
• Bid challenges in practice
• 14 different jurisdictions, 14 different regimes
• The importance of the Canadian International Trade Tribunal
• Challenges by losing bidders after award of contract
• “A stitch in time”: bid challenges prior to award

The Residual Application of Common Law Breach of Contract Remedies

• The persistence of court actions as an option
• for the private sector
• for the public sector
• where procurements are below the trade agreement thresholds
• where common law judicial review administrative law remedies persist, as a parallel route to bid protest under trade agreements
• between contractors and subcontractors (discussed in detail below)
• Private law - the common law - contracts
• traditional contract law: privity, enforceability, remedies
• The usual remedies: damages for breach of contract
• The exceptional remedies
• An ounce of prevention: applications for judicial approval of bids
• Injunctive relief
• A Historical Tangent: 40 Years of Canadian Tendering Law Lost in the Wilderness
• The Ron Engineering [1981] revolution - the Supreme Court makes the rules
• Measure of damages - Substantial Liability for Trivial Mistakes
• Only in Canada, eh? The rest of the world wisely rejects Canada’s approach
• The Ron Engineering paradigm in practice
• Best Practice versus Insistence on Enforcing Strict Legal Rights
• The limits of Ron Engineering: exceptions to the rule
• Unintended Consequences for Owners
• Substantial and arbitrary liability for honest errors
• Contract Law to the Rescue: Exclusion of Liability Clauses
• Current best practices
• Clauses an owner’s bidding documents must have
• A Recent Development: the overarching principle of good faith in contractual performance

Subcontractors’ Rights and Obligations in the Tendering Process

• No rights (yet) against owners: Design Services v. Canada [2008]
• Subcontractors’ obligations to contractors
• Contractors’ obligations to subcontractors

Architects and Engineers

• Hiring architects and engineers - competitive procurement of design services
• The consultant’s role (and legal jeopardy) in the procurement process

Instructor

Michael MacKay practiced law in Toronto for over 21 years, the last 19 almost exclusively in the field of construction law and the last 14 at his own firm. He was a member of the Ontario Bar Association’s Construction Law Section’s Executive Committee from 1993 to 2009 and for most of that time co-edited its newsletter “Nuts & Bolts.” He is a frequent contributor to the Construction Law Letter.

For over 20 years, he has travelled all across Canada to talk on construction law topics – including a complete construction law course for EPIC.