City of Kelowna v. Maple Reinders is the latest in a series of pronouncements by the British Columbia courts on the effect of bidder non-compliance on the tendering process. The application was heard on November 18, 2004 and judgment was rendered December 3, 2004.
The City of Kelowna called for tenders for the construction of a UV disinfection system; the only two bidders were Maple Reinders Inc. (Maple) and Graham Construction and Engineering Inc. (Graham). The instructions to bidders included two privilege clauses; a requirement that the bid be broken into component parts; and a clause indicating that the bid analysis was to be based on total bid price. The price for owner pre-selected materials was one of the components, which the City, subsequent to the tender call, reduced via an amendment to the bid form. Use of this amended form was mandatory. While Graham used the correct form, Maple used an earlier form with a higher price for owner pre-selected materials. Had Maple used the proper bid form, its bid would have been the low bid. The City, once notified of the error, purported to revise Maple’s bid by substituting the correct price for owner pre-selected materials. Graham then indicated its intention to challenge a decision to award the contract to Maple.
The City responded by applying for a declaration that Maple’s error was not material and that Graham had suffered no prejudice as a result of the error because the price for pre-selected materials was beyond the bidders’ control. The City also sought a declaration that it could award the contract to Maple at the lower price. The Supreme Court of British Columbia dismissed the application, finding that the Maple bid was non-compliant and not capable of acceptance. It found that by having made the use of the new bid form mandatory, the City had indicated that its use was a material requirement. Applying the test for materiality as outlined in Silex Restorations Ltd. v. Strata Plan VR 2096 and Graham Industrial Services Ltd. v. Greater Vancouver Water District, the court held that Maple’s use of the wrong bid form rendered its bid materially non-compliant. The court also refused to sanction the City’s amendment to Maple’s bid price. There was no arithmetical error in the bid, thus nothing for the City to waive or ignore pursuant to the privilege clause. The court was of the view that allowing the declaration would in effect allow a bidder to amend its bid after it knew the total bid price of its competition, which threatened the integrity of the tendering process. The fact that the price for pre-selected materials was outside the bidders’ control was of no consequence.
Graham was represented by Christopher J. O’Connor (litigation) of Borden Ladner Gervais LLP, with the support of Rob Deane and David Miachika (litigation). The City was represented by Barry Williamson of Lidstone, Young, Anderson, and Maple was represented by Jonathan Speigel of Speigel Nichols Fox.
The City of Kelowna called for tenders for the construction of a UV disinfection system; the only two bidders were Maple Reinders Inc. (Maple) and Graham Construction and Engineering Inc. (Graham). The instructions to bidders included two privilege clauses; a requirement that the bid be broken into component parts; and a clause indicating that the bid analysis was to be based on total bid price. The price for owner pre-selected materials was one of the components, which the City, subsequent to the tender call, reduced via an amendment to the bid form. Use of this amended form was mandatory. While Graham used the correct form, Maple used an earlier form with a higher price for owner pre-selected materials. Had Maple used the proper bid form, its bid would have been the low bid. The City, once notified of the error, purported to revise Maple’s bid by substituting the correct price for owner pre-selected materials. Graham then indicated its intention to challenge a decision to award the contract to Maple.
The City responded by applying for a declaration that Maple’s error was not material and that Graham had suffered no prejudice as a result of the error because the price for pre-selected materials was beyond the bidders’ control. The City also sought a declaration that it could award the contract to Maple at the lower price. The Supreme Court of British Columbia dismissed the application, finding that the Maple bid was non-compliant and not capable of acceptance. It found that by having made the use of the new bid form mandatory, the City had indicated that its use was a material requirement. Applying the test for materiality as outlined in Silex Restorations Ltd. v. Strata Plan VR 2096 and Graham Industrial Services Ltd. v. Greater Vancouver Water District, the court held that Maple’s use of the wrong bid form rendered its bid materially non-compliant. The court also refused to sanction the City’s amendment to Maple’s bid price. There was no arithmetical error in the bid, thus nothing for the City to waive or ignore pursuant to the privilege clause. The court was of the view that allowing the declaration would in effect allow a bidder to amend its bid after it knew the total bid price of its competition, which threatened the integrity of the tendering process. The fact that the price for pre-selected materials was outside the bidders’ control was of no consequence.
Graham was represented by Christopher J. O’Connor (litigation) of Borden Ladner Gervais LLP, with the support of Rob Deane and David Miachika (litigation). The City was represented by Barry Williamson of Lidstone, Young, Anderson, and Maple was represented by Jonathan Speigel of Speigel Nichols Fox.
