Court of Appeal of Quebec

Ville de Montréal c. EBC inc.

500-09-027239-177

Rochette, Healy, Ruel

Appeal from a judgment of the Superior Court condemning the appellant to pay $1,550,000. Dismissed.

In 2013, the appellant city issued a public call for tenders to build a multipurpose sports complex. The contract was awarded to the bidder with the lowest tender, Unigertec Inc. The trial judge concluded that, contrary to what had been required in the tender documents, this tender did not include any evidence of proficiency. Because the respondent had filed the second lowest compliant tender, the judge ruled that the contract should have been awarded to that bidder.  

It is trite law that a public body must reject any tender containing a material irregularity, but that it maintains a discretionary power with respect to minor ones. A material irregularity is a [translation] “failure to comply with an essential or substantial requirement of the call for tenders” affecting the equality between the bidders and the integrity of the process.

The applicable test when determining whether a requirement set out in tender documents is mandatory is the following: (1) is the requirement of public order?; (2) do the tender documents expressly indicate that the requirement is an essential element?; (3) if both answers are negative, in light of uses, implicit obligations, and the intention of the parties, does the requirement convey an element that is essential to the call for tenders or only ancillary?  With respect to the last question, while the reasonable understanding and conduct of the bidders may constitute elements to be considered to determine whether a requirement is mandatory or ancillary, if there is no express requirement, it is necessary to examine the intention expressed by the offeror, which may appear more broadly from the context of the call for tenders. The context includes examining the tender documents, as well as the description, nature and scope of the project.

In this case, the very wording of the proficiency clause suggests that it was mandatory. It is logical that this would be the case in the context of a major and complex infrastructure contract. Furthermore, prior to receiving a legal opinion, the the appellant’s representatives considered the clause to be mandatory, to the point of asking Unigertec to improve its tender in this respect. The appellant wrongly limited its analysis of the public interest to the single issue of price. The general public interest concerning public contracts requires that bidders have the ability, expertise, and solvency required to carry out the contract.

The judge, therefore, did not commit a palpable error in finding that the disputed clause was a mandatory condition and that failure to comply therewith was a material irregularity that should have resulted in Unigertec’s tender being rejected. To find otherwise would undermine the tender process. Finally, the judge properly directed himself by accepting that the respondent’s tender complied with the appellant’s requirements.

*Summary by SOQUIJ
Text of the decision: Http://citoyens.soquij.qc.ca

 

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