of Queen’s Bench, did arise in the tendering context. Elan
Construction Limited (“Elan”) was one of a number of contractors
that submitted a bid in response to a call for tenders
from South Fish Creek Recreational Association (“SFCRA”)
to expand a recreational facility. The tender documents disclosed
that the bids would be reviewed using an evaluation
matrix based on the criteria of price, completion date, experience
and references. Ultimately, the general contract was
awarded to a bidder other than Elan.
The parties agreed that, by virtue of the bid submitted by
Elan in response to the call for tenders, a Contract A of the
sort described by the Supreme Court in Ron Engineering arose.
The issue before the court was whether SFCRA breached the
contract by, among other things, assessing the bids on the
basis of undisclosed criteria and negotiating with another
bidder during the bid evaluation process. Elan argued that,
had the bids been evaluated fairly and in accordance with
the evaluation criteria set out in the bid documents, it would
have been awarded the general contract (Contract B under
the Ron Engineering framework).
In denying that it breached Contract A, SFCRA relied on
the wording of Article 5 of the Invitation to Bidders, which it
said operated as a full defence to the claim:
LEGAL
• 5.1) The Owner reserves the right to reject any or all
Bids received and also reserves the right, if it is in its
interest to do so, to waive informalities in the Bid or
failure to comply with all bidding requirements. The
lowest Bid will not necessarily be accepted.
• 5.2) By submitting a Bid, the bidder acknowledges
and agrees that the Owner has, and is hereby entitled
to exercise, the sole and unfettered discretion
to award the points for the evaluation of the criteria
noted below.
• 5.3) By submitting a Bid, each bidder acknowledges
and agrees that it waives any right to contest any legal
proceedings regarding the decision of the Owner to
award points under the criteria noted below.
Elan took the position that the bid documents, read as a
whole, demonstrated an intention on the part of SFCRA to
evaluate the bids in accordance with the evaluation matrix,
which is not what happened. Elan further argued that Article
5 did not confer upon SFCRA an unfettered discretion, but
rather a discretion that had to be exercised in good faith and
on the basis of pertinent considerations to ensure fairness to
all bidders and protect the integrity of the tendering process.
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