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Law Column

March 2009 Law Column

INVITATIONS TO TENDER

Pay attention to the terms for execution!

Me Albert Prévost, lawyer

 

 

On January 27, 2009, , in the matter of Municipalité de Sainte-Agathe-de-Lotbinière c. Construction BSL inc., J.E. 2009-303, the Appeal Court of Quebec confirmed a decision of the Quebec Superior Court holding the Municipalité de Sainte-Agathe-de-Lotbinière responsible in the following situation.

 

On October 16, 2003, the municipality issued a call for tenders for the replacement of a water reservoir. It was important that the work be done quickly because, since 2001, the municipality frequently had been obliged to publish notices warning citizens to boil their water before drinking. Therefore the call for tenders specified that the work had to be completed before December 12 2003.

 

On November 10 2003, the contract was awarded to Construction BSL inc. (BSL) for $523 363.75. BSL started the job on November 12th. However on November 14th, the engineer mandated by the municipality asked BSL to suspend work because the certificate of authorization required by the Environment Quality Act had not yet been obtained. BSL stopped work and, on November 25, 2003, advised the municipality that the delay would entail supplementary costs due primarily to winter work conditions.

 

The municipality obtained the certificate of authorization on December 5 2003. Work recommenced on December 8th and the job was completed on February 6 2004. BSL then claimed an amount of $112 010.81 for costs incurred due to winter conditions up to February 6 2004, because when they presented their bid, they were within their rights to believe the work would be completed by December 12 2003.

 

The Superior Court decision, confirmed by the Court of Appeal, concluded that the municipality was at fault regarding the obligation to provide information, because the bidders were not advised that the certificate of authorization required by the Environment Quality Act had not been obtained before the bids were deposited. The Court added that the bidders were right to believe that the job had to be completed before December 12 2003 and that municipality had already obtained the certificate.

The Court of Appeal came to this conclusion even though the tender specifications included a clause stating bidders must take winter conditions into account and the resolution awarding the contract to BSL stated that the job was conditional to obtaining a certificate of authorization. Because BSL had not been advised before depositing their bid, in preparing the bid they could not have foreseen a delay, and more significantly, the call for tenders expressly specified that work was to be completed before December 12 2003.

 

Consequently, municipalities must act carefully when preparing documents for calls to tender, particularly with regard to establishing terms for execution.