RC106 MayJune2023 - Magazine - Page 27
environments where qualified bidders have no shortage
of opportunities. Potential bidders will not want to waste
money and time participating in a competition in which
the ‘rules of the game’ may not be properly followed.
Possible Protection – Privilege Clause
The seminal case Tercon Contractors Ltd v British Columbia
(Transportation and Highways) left open the possibility
that a broadly worded privilege clause in the invitation
to tender could be sufficient to limit the owner’s liability,
including liability for breach of the duty of fairness.18
A privilege clause permits the owner to not accept the
lowest, or any bid, and to choose between bids on an
unspecified basis. In Tercon, the Supreme Court of Canada
said that clear language is necessary to exclude liability
for breach of the duty of fairness because it is such a basic
requirement of the tendering processes.
However, cases since Tercon, whether in B.C. or
other Canadian jurisdictions, have not yet directly
addressed the issue of whether a privilege clause that
excludes liability for a breach of the duty of fairness is
enforceable.19
Best practice for an owner is to avoid situations where
they must rely on a privilege clause. Privilege clauses
should always be included in the bid documents but
relied on only as a last resort.
Conclusion
The above discussion is limited to common law considerations only. It does not consider specific policies, laws,
or agreements which may be incorporated into tendering
documents or otherwise apply to public owners.
This article also only focuses on a classic tendering
process. However, another common way to procure
goods and services is by issuing a request for proposals
(“RFP”). A true RFP permits more flexibility after the
receipt of proposals than does a tender. RFPs solicit
interest in negotiating the final contract, whereas a tender
results in a binding commitment that the owner will
award a contract to the lowest compliant bidder and the
bidder will enter the contract as presented in the tender
documents.
To minimize risk in any circumstance, owners should
obtain expert advice and carefully draft and prepare
tendering documents, so mistakes are less likely to
occur. Owners should also always proceed as though the
common law of tendering applies and they do not have
protective language in their bid documents, even if they
have issued an RFP and the documents contain exculpatory clauses.
For footnote information visit renewcanada.net/mj23resources
PROTECTING
PEOPLE AND
THE ENVIRONMENT
www.nwmo.ca
@nwmocanada
/company/nwmocanada
RENEWCANADA.NET
MAY/JUNE 2023 – RENEW CANADA 27
