Transcript Be Cautious With The Incumbent

Procurement in Practice: Avoiding
Pitfalls
June 4, 2013
Case Law Update
Vincent DeRose
Lexpert
Toronto, ON
June 4, 2013
30 Years of SCC Tendering Law Decision
Ron
Engineering
1981
• SCC establishes
Contract “A”/“B”
Model
• Goal: Preserving
integrity of competitive
bidding system
MJB
1999
Martel
2000
• SCC states that it will
not interfere with owner’s
stated right under a
“privilege clause”
provided owner does not
breach terms of Contract
“A” by accepting noncompliant bid
• SCC finds implied
obligation on owner to
treat all bidders within
Contract “A” fairly,
equally and consistently
• Goal: Protecting and
promoting integrity of
bidding system
• “Privilege clause” must
be read in harmony with
rest of tender documents
• SCC does not examine
degree of required
compliance (strict vs.
substantial)
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Design Services
2008
• Duty of Care by tendering
authority does not extend to
subcontractors
Double N
Earthmovers
2007
Tercon
2010
•5:4 Decision
• 5:4 Decision
• When assessing
compliance, no duty on
owner to investigate
representations on face of
bid, although right to do so
• Would encourage attacks
by rival bidders and
potentially frustrate
integrity of the bidding
process
• Avoid subjecting Parties
in Contract “B” to constant
surveillance and scrutiny by
unsuccessful bidders
• Court agree in
principle that
exclusion of
liability clauses are
enforceable
• Disagree on
whether clause in
issue applicable to
Tercon’s claim
• Preserved
integrity of
bidding system?
Be Cautious With The Incumbent
Envoy Relocation Services Inc. v. Canada (Attorney General) (Ont. 2013)
• An action for damages.
• In 2002, the Crown issued an RFP seeking bids on a contract to provide
services related to re-location of federal employees who had been
transferred.
• The 2002 RFP resulted in a contract awarded to the incumbent, Royal
LePage. That contract was eventually cancelled because of a conflict of
interest.
• A second RFP for same services was issued in 2004.
• The RFP requested that bidders include provision for “property
management services.” The RFP estimated that such services were
required for 7,200 moves per year.
• On that basis, the Plaintiff Envoy submitted a bid that included provision
of $42 million for property management services in 2002 and $48 million in
2004.
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Be Cautious With The Incumbent
Envoy Relocation Services Inc. v. Canada (Attorney General) (Ont.
2013)
• Royal LePage had been the incumbent service provider prior to
the issuance of the RFP and was the successful bidder in 2002 and
2004.
• Royal LePage’s participation in the pilot project for the re-location
program, and its position as incumbent, led to advantageous
knowledge of the assessment process and an unfairly close
relationship with personnel who assessed the bids.
• The Auditor General subsequently determined that Royal LePage
possessed inside knowledge showing that between 1999 and 2005
only 183 of the 81,000 relocations utilized property management
services instead of the 7,200 moves contemplated by the RFP.
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Be Cautious With The Incumbent
• Envoy Relocation Services Inc. v. Canada (Attorney General) (Ont.
2013)
The bids submitted by Royal LePage in 2002 and 2004 were successful
because it had allocated $0 towards those services. Moreover, when it
provided such services they were nevertheless billed and paid.
In allowing the action for damages, the Court made the following
findings:
1. Royal LePage’s bid of $0 value for property management services did
not reflect a fair market value;
2. The $0 was unknown to the Plaintiff and competing bidders;
3. The bid submitted by the Plaintiff was based on grossly inflated
estimated volumes of contemplated property management services. At
trial, no explanation was given by the Crown for this discrepancy which
constituted a misrepresentation and conferred an unfair advantage
upon Royal LePage;
•
•
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Be Cautious With The Incumbent
Envoy Relocation Services Inc. v. Canada (Attorney General) (Ont. 2013)
4. Information concerning the repetition of the $0 bid by Royal LePage in
the 2004 tender was suppressed from key individuals within
government;
5. Royal LePage actually charged for property management services
despite its $0 quote - and the Crown knowingly paid;
6. The Crown acted in bad faith in a matter akin to the tort of deceit;
7. Liability was grounded in contract based on a breach of the implied
duty of fair and equal treatment in the tender process;
8. The Crown failed to conduct the tender process in a transparent and
fully documented fashion. It intentionally misled bidders and refused to
acknowledge or seriously consider a conflict of interest in favour of
Royal LePage as the incumbent.
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Be Cautious With The Incumbent
Envoy Relocation Services Inc. v. Canada (Attorney General) (Ont.
2013)
• Damages were assessed based on lost profits with
contingencies to reflect start-up costs and profits from one of
the two available option years. The total award was $32.1
million.
• In addition to damages, Envoy was awarded pre-judgment
interest of approx. $3 million and costs of approx. $4.7 million.
• Although the conduct of the Crown was “high handed” and
“arbitrary”, an award of punitive damages would serve no
purpose in terms of deterrence and denunciation.
• No award for bid preparation costs as they were a necessary
cost for doing business to win the tender.
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A Rough Ride
Friends of Lansdowne Inc. v. Ottawa (City) (2012 Ont. C.A.)
• City proposed to redevelop Landsdowne Park through a public
private partnership between the City and Ottawa Sports and
Entertainment Group (OSEG).
• June 2010 City passed a by-law advancing the development.
• Friends applied to quash the by-law.
• Friends’ application was dismissed. Friends appealed arguing:
1. The approved development provides a “bonus” to OSEG.
2. The City did not follow its own procurement by-law.
3. The City acted in bad faith in approving the proposed
development.
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A Rough Ride
Friends of Lansdowne Inc. v. Ottawa (City) (2012 Ont. C.A.)
• The applications judge and the Court of Appeal both set out
lengthy reasons for the determination that there was no valid
“bonus” being made to OSEG.
• The courts found that the Plan provided that OSEG was not
receiving “something for nothing”, rather it contained a
complicated matrix of covenants and intertwining and pooling
of revenues and losses creating a “balance” between the
benefits and obligations.
• The courts also found that the did not act in bad faith.
• The Court of Appeal stated that it is not for the courts to
second guess or re-weigh policy and financial considerations.
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A Rough Ride
Friends of Lansdowne Inc. v. Ottawa (City) (2012 Ont. C.A.)
• Friends also argued that the City failed to follow its own
procurement by-law.
• Procurement policies designed to ensure “integrity and
transparency” of a municipality’s procurement process.
• The objective of the City’s Purchasing By-Law is to obtain the
“best value” while treating all suppliers equitably.
• Guiding principle - purchases made using a competitive
process that is open, transparent and fair to all suppliers.
• The City may waive competitive bidding process and replace
with negotiations where there is an absence of competition for
technical or other reasons and goods, services or construction
can only be supplied by a particular supplier.
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A Rough Ride
Friends of Lansdowne Inc. v. Ottawa (City) (2012 Ont. C.A.)
• City relied on the Purchasing By-law for negotiation as OSEG
was the only entity that could bring the sports franchises to the
table. Court agreed that this was sufficient to trigger
exemption.
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When To Cancel?
Glenview Iron & Metal Ltd. v. Smiths Falls (Town) (Ont. 2012)
• The Town issued a RFP for the collection and haulage of garbage. Plaintiff
was one of 13 bidders. The RFP included mandatory bid forms, and stated
that errors in completing the forms could not be correct unless the bid
document was completely withdrawn and re-submitted before bid closing
time. It also included a “privilege clause”.
• One of the bid forms required bidders to quote a monthly rental fee for
various sized steel containers (dumpsters). For each size dumpster, the
Town provided an approximation of the number of units normally rented.
• For the sum of (all applicable taxes included)
SIZE: (a) 3.06 m3 (4 yd3) (6 units approximately) $10/60 (per unit/month)
(b) 4.59 m3 (6 yd3) (10 units approximately) $10/100(per unit/month)
(c) 7.65 m3 – 22.94 m3 (10 yd3 – 30 yd3)
$_____ (per unit/month
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When To Cancel?
Glenview Iron & Metal Ltd. v. Smiths Falls (Town) (Ont. 2012)
• Town employee called Glenview to clarify expensive dumpsters – told there
was an error. That employee erroneously fixed the error.
• The Town initially entered into negotiations with another bidder that offered an
option whereby much of the garbage would be converted into “green energy”.
• Glenview complained and threatened litigation, which lead to a re-examination
of all of the bids.
• As part of that process, Glenview’s error and the repair of their bid was
discovered.
• Further, the Provincial Government had recently issued policy statements
promoting recycling and other environmentally friendly waste management
solutions. The Town was concerned that their failure to act could prejudice its
ability to obtain provincial grants for waste disposal.
• Consequently, the Town cancelled the entire RFP.
• The Town brought a motion for summary judgment.
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When To Cancel?
Glenview Iron & Metal Ltd. v. Smiths Falls (Town) (Ont. 2012)
• The Court agreed that the Town was entitled to cancel the bid
unless it was acting in bad faith.
• The Town found itself in an unfortunate legal position resulting
from its own missteps. However, missteps do not equate with
bad faith.
• Re-tendering was seen as a mechanism as protecting the
interests of all parties and protecting the integrity of the
tendering process.
• Policy decisions that fall within the legitimate purview of
municipal councils are not open to review by Courts or
required to approach this type of municipal decision making
with deference.
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Let me out!
Manitoba Eastern Star Chalet Inc. v. Dominion Construction Co.
Inc. (2011 Man. Q.B.)
• Manitoba, a non-profit organization, owns and operates a seniors housing
•
•
•
•
•
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complex, the Eastern Star Chalet, in the City of Winnipeg.
Manitoba retained a Consultant to prepare the drawings, designs,
specifications and tender process with respect to expanding the complex.
Project budget $2 Million.
Three companies submitted proposals, including Dominion.
Dominion’s bid ($2,450,000) was lowest. The next lowest bid was
$3,097,000.
The Consultant reviewed the proposals finding that they were compliant,
but noted that the Dominion bid failed to list addendum no. 4, which
“should mean credit”.
Let me out!
Manitoba Eastern Star Chalet Inc. v. Dominion Construction Co.
Inc. (2011 Man. Q.B.)
• The next day Dominion contacted the Consultant’s office and
was told that it was “low and probable”. Dominion advised
there was a problem with its bid.
• Dominion then wrote to Manitoba advising that it had made a
mathematical error and was withdrawing its bid. According to
Dominion, there was an error in its computer program and its
bid should have been about $600,000 higher.
• Dominion did not rely on its error to withdraw, but rather
argued that its bid was not compliant since (1) its bid was not
signed by an authorized signing officer, and (2) it failed to list
addendum no. 4 in its bid.
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Let me out!
Manitoba Eastern Star Chalet Inc. v. Dominion Construction Co. Inc. (2011
Man. Q.B.)
• The instructions to bidders required that the Bid Form be signed under
seal by the bidder and, in the case of a limited company, be signed by a
duly authorized signing officer. Dominion contended that the chief
estimator signed the bid, but he was not a duly authorized signing officer.
• The court rejected Dominion’s argument finding that:
1. It was Dominion’s custom to act as it did and have the chief estimator sign
bids. Thus, Dominion intended to make and execute the bid in the manner
it did.
2. Manitoba reserved to itself the ability to waive such non-conformity.
3. The instructions did not require bidders to submit proof of signing authority.
• Allowing the withdrawal would allow contractors to “lie in the weeds”.
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Let me out!
Manitoba Eastern Star Chalet Inc. v. Dominion Construction Co. Inc.
(2011 Man. Q.B.)
• Dominion contended that its failure to list addendum no. 4, which
included work relevant to its bid, made its bid non-compliant.
• The court found that it was clear that Dominion had received and
considered addendum no. 4 in preparing its bid.
• The court was also satisfied that Dominion’s bid encapsulated all
four addenda and failure to list addendum four in its bid was a
typographical error.
• The cost of any change from addendum no. 4, at most $30,000,
was not substantial so as to account for a $647,000 price variance.
• Therefore, the court found for Manitoba and awarded damages.
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Let me out!
Manitoba Eastern Star Chalet Inc. v. Dominion Construction Co.
Inc. (2011 Man. Q.B.)
• As for damages, Manitoba claimed the difference in price
between Dominion’s bid and the next lowest bidder.
• However, Manitoba had negotiated a lower price with Bird
($2,905,571).
• The project also included change orders that increased this
price to a final adjusted contract price of $2,968,059.85.
• The court rejected Manitoba’s damages amount, but awarded
the difference between Dominion’s bid price and the final
adjusted contract price.
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Excuse me sir, do you have the time?
Moorefield Excavating v. Municipality of Arran-Elderslie (Ont. 2012)
• Municipality issues tender for replacement of water main.
• Genivar prepared tender documents and supervised tender process.
• Tender documents contained a discrepancy with respect to the
closing time for tenders.
• Municipality issued an Addendum replacing the Form of Tender which
providing for a closing time of 2 p.m. and not 1 p.m.
• On the closing date representatives of Genivar and the Municipality
believed the closing time was 1 p.m.
• Four tenders were received before 1 p.m. and all were opened publicly
shortly after 1 p.m.
• Moorfield’s bid was the lowest of those received and one of the
Municipality representatives departed the room to call Moorefield to
advise it was the low bidder.
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Excuse me sir, do you have the time?
Moorefield Excavating v. Municipality of Arran-Elderslie (Ont. 2012)
• After the bids were opened, two new bidders submitted bids taking the
position that the closing time was 2 p.m. and not 1 p.m.
• Genivar and the Municipality reviewed the tender documents and
concluded that the correct closing time was 2 p.m. and not 1 p.m. and
accepted the 2 bids.
• Genivar and the Municipality had determined that following the order
of precedence contained in the tender documents, Addenda, ranked
ahead of the Instructions to Bidders (which contained the
discrepancy) and therefore since the Addendum replaced the Form of
Tender, which provided for a 2 p.m. closing time, that time governed.
• The 2 bids were opened immediately (not waiting for 2 p.m.) and the
contract was awarded to Harold whose was lower than Moorefield’s
bid.
• Moorefield sued the Municipality.
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Excuse me sir, do you have the time?
Moorefield Excavating v. Municipality of Arran-Elderslie (Ont. 2012)
• The court found that the revised Form of Tender did not resolve
the conflict in favour of a 2 p.m. closing date.
• The Addendum itself was silent on any change to the closing time.
• The Addendum merely provided that the revised Form of Tender
was “enclosed” and did not specifically advise that it was
“attached hereto and forms part of” the Addendum.
• Merely enclosing the revised Form of Tender to the Addenda it did
not elevate the Form of Tender to an Addendum. Form of Tender
ranked behind the “Instructions to Tenderers.”
• Since the discrepancy would otherwise be resolved to provide for
a 1 p.m. closing time, that was the correct time.
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Excuse me sir, do you have the time?
Moorefield Excavating v. Municipality of Arran-Elderslie (Ont.
2012)
• In arriving at its decision, the court considered the intent of the
Municipality and noted that the Municipality and Genivar both
believed that the closing time was 1 p.m.
• Since the Municipality opened the four tenders after 1 p.m. it
committed itself to the 1 p.m. closing time and was estopped
from awarding to a bidder whose bid was received after this
time.
• Damages were not determined on the motion.
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Evaluate – and Re-Evaluate –
Everyone the Same
Mastermeter Products Canada Inc. v. North Bay (City) (Ont. 2012)
• Judicial Review of the City to purchase water meters from
Neptune.
• Mastermeter alleged that it was denied procedural fairness
because of the way in which the City conducted the bidding
process for the contract.
• North Bay issued an RFP for the supply and installation of water
meters.
• Three companies submitted proposals.
• The City initially assessed the net present value (“NPV”) of the
proposals on a 15-year evaluation period. The NPV assessment
was subsequently re-assessed on a 5-year evaluation period.
• Neptune received the best score under both the 15 and 5-year
evaluation period.
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Evaluate – and Re-Evaluate –
Everyone the Same
Mastermeter Products Canada Inc. v. North Bay (City) (Ont. 2012)
• Further, during the course of negotiations with Neptune, the
City discovered nominal additional costs that would be
incurred that were not reflected in Neptune’s proposal. On this
basis, the Evaluation Committee re-evaluated all three
proposals. Neptune still had the highest technical rating.
• Mastermeter argued that the NPV and re-assessment of
nominal costs constituted improper undisclosed evaluation
criteria
• The Court concluded that the RFP was fair and the decision to
award the contract to Neptune was reasonable. In coming to its
conclusion, the Court observed that the Evaluation Committee
applied the same set of criteria and undertook the same
evaluation for all three proposals.
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Changes in the Procurement Dynamic
Rick Shaban
Case Study – You Be the Judge
Gerry Stobo
Lexpert
Toronto, ON
June 4, 2013
Case Study – You Be the Judge
• Your role is Chief Procurement Officer for Clearview
Condominiums “Clearview”. The Chief Executive Officer of
Clearview has asked that you oversee the procurement process
to identify a contractor to build a condominium tower. The RFP
has been issued and three bids have been received.
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Case Study – You Be the Judge
(cont’d)
The following mandatory requirements were in the RFP:
• Bidders are required to indicate their total price (including HST).
Although not stated to be a mandatory requirement, the bid form
broke down the price into five components and bidders were asked to
provide the pricing for each of those components;
• Bidders were required to post a bid bond for $500,000 valid for 90
days;
• Bidders were required to have bids sealed with the company seal and
signed by a duly authorized officer of their company;
• Bidders were required to attach all addenda issued before bid closing;
• Bidders were prohibited from bidding if the key personnel of the
company, or the company itself, had been convicted under the
Corruption of Foreign Public Officials Act.
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Case Study – You Be the Judge
(cont’d)
• The RFP also indicated:
i.
bids would be assessed on a substantial compliance basis,
ii. the lowest-priced bid would not necessarily be accepted, and
iii. the owner may negotiate with bidders on any item.
• Before the bids were submitted, one of the builders – Smith Co.
– wrote to the contract authority saying: “I hear that Brown Ltd.
is going to submit a bid. I heard from my head office in New
York that Brown Ltd.’s Indonesian subsidiary was convicted
last week in Indonesia for bribing a member of the Royal Family
to get a mining concession. They shouldn’t be allowed to bid.
Keep this strictly confidential.”
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Case Study – You Be the Judge
(cont’d)
• Three bids were received as follows:
• Jones Inc. – $4,150,000;
• Smith Co. - $4,900,000;
• Brown Ltd. - $5,250,000.
• As Chief Procurement Officer for Clearview, you opened the
bids publicly and the bid prices were read out. All three
bidders were present.
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Case Study – You Be the Judge
(cont’d)
• When the prices were read out, the representative from Jones
Inc. was surprised that its bid was so much lower than the next
closest bid price. He thought that something must have been
missing from Jones’ bid and looked at the bid form his
company had submitted with its bid. In reviewing this, he
noticed that his company had failed to include pricing for one
of the five components, an item that would typically have been
priced at about $800,000. Recognizing this mistake he shouts
out: “There has been a mistake in our bid price.
I withdraw our bid.”
• You and other bidders are surprised at that outburst and
perplexed about next steps. You say that you need to think
about what has just happened.
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Case Study – You Be the Judge
(cont’d)
• The Jones representative runs back to his office, called his
lawyer and, upon instructions from his lawyer, writes a letter to
Clearview saying that the bid was withdrawn. The letter also
said the bid could not be accepted in any event because it was
non-compliant for the following reasons:
i. it failed to include all of the addenda;
ii. although the bid did have the company seal, the person
who signed the bid on behalf of Jones had not been
authorized by the Board of Directors to sign proposals on
behalf of the company; and
iii. the required bid bond was valid for 60 rather than 90 days.
The letter concluded by saying the price was clearly a
mistake and should not be accepted in any event.
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Case Study – You Be the Judge
(cont’d)
• The Clearview CEO wants to accept this bid as it is the only one
within the company’s budget for this condominium project.
That budget is $4,750,000.
• You have been instructed to communicate with Jones to say
that the company cannot withdraw the bid and you intend to
award it the contract. You include in your letter a copy of the
construction contract and ask Jones to sign and return it.
Jones refuses to sign the construction contract.
• In view of this position, you communicate with the other two
bidders saying that Jones has refused to sign the construction
contract but Clearview still needs the work done. You go on to
state however that the prices of Smith and Brown are too high
and you want them to go back and sharpen their pencils, and
give Clearview their “best and final offer” (“BAFO”).
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Case Study – You Be the Judge
(cont’d)
• You did not ask Brown about the bribery conviction in
Indonesia. There is nothing in its bid about the bribery
conviction.
• Smith, the second lowest bidder, responds saying “No, the RFP
didn’t provide for a BAFO process and if we participate all we
are really doing is bidding against ourselves. We request that
the contract be awarded to us for the price indicated in our
bid.”
• Brown says that it will participate in the BAFO process and
submits a revised price of $4,750,000. Clearview then decides
to award Brown the contract.
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Case Study – You Be the Judge
(cont’d)
• Clearview then instructs its lawyers to sue Jones for the
difference between its bid and Brown’s bid. Smith sues
Clearview for breach of contract saying that it should have
been awarded the contract because the RFP did not provide for
a BAFO process.
• Smith also sues Clearview for awarding the contract to a
company convicted of bribery and, as a result, did not meet the
mandatory requirements of the RFP.
• You be the judge.
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Procurement Document Drafting
Tool Kit
Ian J. Houston
Lexpert: Tendering and Procurement
June 6, 2012
Overview
A. Preliminary Considerations
B. Template vs. Customized
C. Selection of Process
D. Proposal Form and Content
E. Evaluation
F. Contract Form
G. Key Provisions
H. Conclusion
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A.
Preliminary Considerations
1. RFP, tender or hybrid
2. Regulatory context
3. Prequalified proponents or open process
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1. RFP, Tender or Hybrid
• Considerations:
• Objectives and constraints of procurement process
• Market conditions
• Evaluation criteria
• Intention to initiate contractual relations?
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2. Regulatory Context
• Trade Agreements (AIT)
• Procurement Directive
• Procurement By-Law
• Fairness Monitor
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3. Prequalified vs. Open
• Technical, commercial/financial, process considerations
• Special technical skill set, experience, proprietary rights
needed?
• Given nature and size of procurement, does it make sense to
identify short list (cost to bid)?
• Complexity of evaluation
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B.
Template vs. Customized
• Template/precedents are important “tools” but beware of heavy
reliance on boilerplate
• Procurement document needs to be tailored to the objectives
and requirements of specific procurement
• Revisit template wordings and obtain debriefs from previous
procurements
• Invest time and thought up front
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C.
Selection of Process
• Timetable
• Communications protocol
- Prohibited contacts and lobbying prohibition
- Media releases, public disclosures
- No collusion
- Data room
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Selection of Process (cont’d)
• Meetings with proponents/bidders
- Pre-bid meetings
- Commercially confidential meetings
- Scheduled site visits
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Selection of Process (cont’d)
• Changes to proponent/bidders or their teams
-
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No changes without consent
Change request protocol
Dealing with changes made without consent
Post submission changes
Selection of Process (cont’d)
• Conflict of interest and ineligible persons
-
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Prompt disclosure
Discretion to deal with conflicts
Ineligible persons list
Conflict adjudicator
D.
Proposal Form and Content
• Submission requirements
-
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Submission deadline
Withdrawal
Amendment
Irrevocability
Format and context
E.
Evaluation
• Evaluation team
• Clarification and verification
• Evaluation process
- Compliance review (mandatory criteria)
- Substantive review and scoring (financial and technical)
- Final score and ranking
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F.
•
•
•
•
•
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Contract Form
(Finalizing Contract B)
Simple award (tender)
Invite comments and feedback
CCMs
Negotiation with preferred proponent
Multiple negotiations
G.
Key Provisions
1. Privilege clause
2. No liability/limit of liability
3. Litigation exclusion
4. Bid protest procedure
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1.
•
•
•
•
•
•
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Privilege Clause
Discretion re management of process – disqualification
Discretion re evaluation – non-compliance
Discretion re award – negotiation
Post-submission addenda, re-issuance of process
Cancellation
Don’t overreach!
Sample Privilege Clause
• The Sponsors may, in their sole discretion:
a) reject any or all of the Proposals;
b) reject an Innovation Submission in any Proposal;
c) reject the Key Personnel proposed in a Proposal and, if not
satisfactorily substituted, reject the Proposal;
d) reject the Financing Plan contained in a Proposal and thereby
reject the Proposal;
e) request a replacement Financing Plan if the Financing Plan
contained in the Proposal is, in the opinion of the
Sponsors, uncompetitive or incomplete, or both;
f) accept any Proposal;
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Sample Privilege Clause (cont’d)
g) if only one Proposal is received, elect to accept or reject it
or enter into negotiations with the Proponent;
h) elect to discontinue the RFP Process at any time before the end
of the RFP Process, including after the identification of a
Preferred Proponent but before Commercial Close;
i) at any time prior to Commercial Close, engage, on behalf of the
Clients, any one or more of the Proponents to perform any part
of the Work or other related work as early start works provided,
however, that in the event that the Sponsors do so nothing
therein shall create any obligations under this RFP or otherwise
with respect to any of the Proponents other than as set out in
the express agreement with respect to the early start works;
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Sample Privilege Clause (cont’d)
j) alter the Timetable, the RFP Process or any other aspect of this
RFP; and
k) cancel this RFP Process and subsequently advertise or call for
new submission(s) for the same or different subject matter of
these RFP Documents with the same or different participants.
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2.
No Liability/Limit of Liability
• Consider enforceability – be specific (Tercon)
• Be commercially reasonable – don’t overreach
• Limitation of liability and honoraria/bid fees
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Sample Limit of Liability Clause
• Except as provided in Section [.], the Proponent agrees that if
the City commits a material breach of its obligations under or in
connection with this RFP (that is, a material breach of the
bidding contract or Contract A), the City's liability to the
Proponent and the aggregate amount of damages recoverable
against the City for any matter relating to or arising from that
material breach, whether based upon an action or claim in
contract, warranty, equity, negligence, intended conduct or
otherwise, including any action or claim arising from the acts
or omissions, negligent or otherwise, of the City, shall be the
lesser of:
a) the Proposal preparation costs that the Proponent seeking
damages from the City can demonstrate; and
b) [$.] or the Honorarium, if applicable.
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3.
Litigation Exclusion
• Consider issue at pre-qualification stage
• Any litigation versus relevant matters
• Make it part of submission requirements and evaluation
methodology
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Sample Litigation Exclusion
• The City may, in its absolute discretion, reject a Proposal
submitted by Proponents if the Proponent, or any officer or
director of the Proponent is or has been engaged either directly
or indirectly through another corporation in a legal action
against the City, its elected or appointed officers and
employees in relation to:
• Any other Contract for works or Services; or
• Any matter arising from the City's exercise of its powers, duties
or functions under the Local Government Act or another
enactment within five years of the date of this Request for
Proposal.
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Sample Litigation Exclusion (cont’d)
In determining whether to reject a Proposal under this clause, the
City will consider whether the litigation is likely to affect the affect
the Proponent's ability to work with the City, its consultants and
representatives and whether the City's experience with the
Proponent indicates that the City is likely to incur increased
employees and legal costs in the administration of this Contract if
it is awarded to the Proponent.
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4.
Bid Protest Procedures
• May be required (Ontario Procurement Directive)
• Process of directing disputes to achieve early identification and
resolution
• Use of debriefing
• Expedited mediation/arbitration
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Sample Bid Protest Procedures
• In the event that a Bidder wishes to review the decision of the
Purchaser in respect of any material aspect of the RFT process,
and subject to having attended a debriefing, the Bidder shall
submit a protest in writing to the Purchaser within 10 Days
from such a debriefing. Any protest in writing that is not timely
received will not be considered and the Bidder will be notified
in writing.
• A protest in writing shall include the following:
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Sample Bid Protest Procedures
(cont’d)
• A specific identification of the provision and/or procurement
procedure that is alleged to have been breached;
• A specific description of each act alleged to have breached the
procurement process;
• A precise statement of the relevant facts;
• An identification of the issues to be resolved;
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Sample Bid Protest Procedures
(cont’d)
• The Bidder's arguments and supporting documentation;
• The Bidder's requested remedy;
• Purchaser shall respond to Bidder’s protest, in writing, within
10 days of receipt of the protest, and such response shall
contain an explanation of Purchaser’s reasons for agreeing
with or rejecting Bidder’s protest (the “Response”). In the event
that the Response does not resolve the protest, either party
shall be at liberty to pursue any other method of dispute
resolution to resolve the protest.
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Conclusion
•
•
•
•
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Customized over boilerplate
Plain language over legalise
Commercially reasonable over extreme provisions
Do your homework
Procurement from the
Trenches/Complex Procurements
Kasim Salim
Lexpert/BLG Course
Tendering and Procurement:
Mastering the Complexities
Toronto - June 4, 2013
Procurement from the Trenches: the
Anatomy of a Complex Procurement
Process
Kasim Salim - Ottawa
The Public Procurement Landscape
• What does public procurement look like
• What is being procured?
• What is being spent?
• Types of projects in progress
• The forecast for future public procurement activities
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Objectives of Session
• The focus of this session is on a “complex procurement
process”, which means certain assumptions will be made, such
as:
• This may be a unique or on-off project for the sponsor
• This may be a new procurement method for the sponsor
• The sponsor will need to consider its internal structure and
capacity to implement to procurement
• This session will draw broadly from our experience in complex.
procurement processes and is not limited to any one project or
type of public procurements
• This session will focus on both practical and legal issues and
considerations
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Initial Considerations
• Understanding the legal framework for public procurements
• Legislation and regulations
• Internal and external agreements
• Policies and directives
• The rise of, and role of, public procurement offices and
agencies
• Special public procurement considerations
• Value for money
• Open, transparent, accountable and fair
• Competitive
• Policy considerations
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Overview: The Stages of a Complex
Procurement Process
• Stage 1: Procurement planning
• Stage 2: Project organization and pre-procurement activities
• Stage 3: Procurement
•
•
•
•
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The “in market” period
Evaluations
Negotiation with the preferred proponent
Award of contract / closing the deal
Stage 1: Issues in Procurement
Planning
• Planning the procurement
• What is being procured and how is it being procured?
• Determining and obtaining required internal project approvals
• Defining the scope of the project
• Authority given for project implementation
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Stage 2: Issues in Project Organization
and Pre-Procurement Activities
• Developing a roadmap for the procurement process
• Developed based on the goal/mandate of the procurement
• Identifying necessary internal and external procurement
resources (and securing those resources)
• Identifying and understanding applicable timelines and the
sequence of events
• Developing a decision-making structure within the procurement,
such as
• “Business as usual”
• Steering/advisory committees
• Separate project office/entity
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Stage 3: Issues in the In-Market Period
• The link between technical/financial specifications and the
“legal” procurement documents
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Stage 3: Issues in the In-Market Period
• Managing internal stakeholders during the procurement
process
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Stage 3: Issues in the In-Market Period
• The influence of external stakeholders on the procurement
process
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Stage 3: Issues in the In-Market Period
• Managing time and schedule: what to do when what you
thought was going to happen doesn't happen (or doesn’t
happen on time)
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Stage 3: Issues in the In-Market Period
• Managing parallel procurement processes
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Stage 3: Issues in Evaluations,
Negotiations and Award of Contract
• The importance of clear evaluation guidelines and process for
the conduct of evaluations
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Stage 3: Issues in Evaluations,
Negotiations and Award of Contract
• Managing the scope of negotiations
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• DM#5188183
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