Unsuccessful Bidder Turns To Judicial Review Following Tender Process feature image

Unsuccessful Bidder Turns To Judicial Review Following Tender Process

When the government of Alberta seeks outside parties to perform work, it must follow a tendering process established in a 1981 Supreme Court of Canada decision. The tendering process essentially involves two contracts. The first, known as “Contract A” is an agreement between the party looking to collect tenders (in this case, the Minister of Environment and Parks) and those seeking to provide the goods or services (in this case, the plaintiff and other parties who responded to the tender). The second contract, known as “Contract B” is an agreement between the party looking to have goods or services provided and the successful bidder.

Occasionally, a business might have to go through the tender process to provide services they have already been providing (for example, when a contract comes to its conclusion and has to be renegotiated). In a recent issue heard by the Court of Appeal of Alberta, an unsuccessful bidder accused the Minister of not following the tender process when it accepted a bid from a rival.

The unsuccessful tender

The plaintiff had been performing the services required under the tender for 16 years up until the date the tender was released. It was unsuccessful in the tendering process, losing to another company (“the competitor”). However, the plaintiff argued that the competitor did not comply with a mandatory requirement in the request for proposals sent out by the Minister. Rather than suing the Minister for breach of contract, the plaintiff applied for judicial review of the successful contract between the competitor and the Minister.

The plaintiff’s argument hinged on a provision in the proposal requiring bidders to have at least five in-house certified operators to perform the services set out in the proposal, and that the names of those operators be included in the submission. The competitor did not include the names of its operators, and the plaintiff was of the position that this resulted in a failure to comply.

Was the winning submission able to stand?

When the matter was heard before a chambers judge for judicial review, the competitor argued that it did not provide the names of the operators, but that it was not required. The chambers judge agreed, finding that the relevant provision in the tender did not require the successful bidder to have five qualified operators at the time the bid was submitted. Instead, it found that a successful bidder could abide by the requirements by having the operators in place when the work began.

What’s more, the chambers judge found that the competitor had provided information concerning its staffing and recruiting methods, as well as a list of nine people who exceeded the requirements asked for.

The chamber judge found that in the alternative, the Minister could have waived that requirement if the successful bidder did not provide the names of qualified operators.

Were there any reviewable errors?

The Court of Appeal found there were no reviewable errors in the chamber judge’s reasoning. Since the plaintiff did not believe it could pursue the matter under contract law, it decided to pursue judicial review, which made it a matter of administrative law. The court found the chambers judge to have accepted the bid as reasonable under the conditions set out in a 2008 Supreme Court of Canada decision.  

The commercial disputes team at HMC Lawyers has over 130 years of combined experience advising clients and litigating on their behalf. Our lawyers know that strategic action at an early stage can help settle matters early and expeditiously, and help prevent prolonged and expensive litigation. We work closely with clients to help them make good business decisions when facing a legal dispute.

To make an appointment with one of our lawyers about a commercial or business litigation matter, contact us online or call 1-800-480-3534.


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