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Call for Tenders : Compliance of tenders and its irregularities

Contractors know, when it comes to call for tenders, the competition is steep and the clients are demanding.  It is important to offer the best price in the best time, without forgetting that it must be the best quality.

However, when a call for tenders is launched, there is something even more important than pricing: the compliance of the bid.

In fact, if the bid is not in compliance with the call for tenders, the bid will not even be considered by the contract provider. In such a case we have a bid that is tainted with an irregularity. It is therefore important to understand that the bid that is sent must correspond to all the criteria in the call for tenders in order to be valid and go to the next step, because only a compliant bid can be accepted[1]. This can all be explained by the fact that the reason call for tenders exist is to give an equal chance to all bidders, therefore avoiding favouritism.

Two types of irregularities can be found in a bid, that is, a minor irregularity or a major irregularity.

On one hand, a major irregularity eliminates any chances for the bid to be submitted to the selection process[2]. A major irregularity is often related to non-compliance of an essential element of the call for tenders[3]. For example, if the call for tenders requires the use of a certain product for technical reasons, the bidding contractor using a different product will automatically be out of the running.

On the other hand, the organization can choose to consider or reject a bid with a minor irregularity[4]. In these cases, the irregularity doesn’t have an impact on the bidder’s equal chance of winning the contract.  For example, a case that is frequently seen is in the case of an error in the suretyship amount. That is, the suretyship offered is less than what is required in the call for tenders, but that purpose of guarantor is still fulfilled[5].

While certain irregularities can be forgiven, the best practice remains to follow the call for tenders’ instructions to the letter and fill out the bid with precision in order to avoid the possibility of rejection.

[1] M.J.B. Enterprises Ltd. v. Construction de Défense (1951) Ltée, [1999] 1 R.C.S. 619, Supreme Court of Canada.

[2] Ste-Euphémie-sur-Rivière-du-Sud (Municipalité de) c. Raby, EYB 2008-148179, Quebec Court of Appeal

[3] Ibid.

[4] R.P.M. Tech inc. v. Ville de Gaspé, [2004] J.Q. no 395, Quebec Court of Appeal

[5] [5] Rimouski (Ville de) v. Structures GB ltée 8 février 2010, Court of Appeal EYB 2010-169350, also see : Couvertures Victo Inc. v. Société d'énergie de la Baie James, 15  octobre  2004, Superior Court.

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