road maintenance contract fulfilled by snowblower clearing sidewalk

Murray Percha & Son Ltd v Barriere (District), 2018 BCSC 428

In February 2016, the District of Barriere (“Barriere”) awarded a winter road maintenance contract to Defiance Enterprises Inc (“Defiance”). From 2013 to 2016, Murray Percha and Son Ltd (“Murray Percha”) had provided winter maintenance – plowing, sanding, and de-icing – on the 31.5 kilometres of road for which Barriere was responsible.

Barriere issued a new RFP for winter road maintenance on January 25, 2016, with a closing date of February 15, 2016. The RFP outlined the conditions and requirements, along with a map of Barriere’s roads. Each bidder had to submit two envelopes, the first containing completion of six key components, and the second containing pricing information, both on the services to be contracted as well as unit prices on potential additional work. A bidder needed to score at least 70 points on evaluation of envelope one for the second envelope to be opened (the maximum score a bidder could receive was 110). All of the bidders scored sufficiently high on the first envelope for the second to be opened.

At that point, each proposal’s price was adjusted according to the Proposal Factor Adjustment (“PFA”), the formula for which was set out in the RFP. Two Barriere employees calculated the pricing, which led to Murray Percha moving from the second-least expensive to the third-least. Defiance was the least expensive both initially and after the PFA. Pricing formed 90% of the weighting of bidders’ scores; ultimately, Murray Percha was scored at 93 and Defiance at 102. The two employees co-authored a report recommending Defiance, and the District of Barriere Council agreed in their in-camera meeting of February 17.

After their unsuccessful bid, Murray Percha launched a legal challenge of the contract award to Defiance. Having found that no Contract A was created by the RFP that was issued, the BCSC proceeded to a Judicial Review of the ‘reasonableness’ of Barriere’s decision. Murray Percha’s claim asked the court to set aside the contract between Barriere and Defiance, to prohibit Barriere from entering into another contract with Defiance, to disqualify Defiance, and to declare that the bid evaluation was improper. Murray Percha argued that Barriere breached its public sector obligation to act fairly, primarily because, Murray Percha argued, the scores it gave were such that no reasonable public body could have given them. Further, Murray Percha argued that Defiance’s bid was non-compliant, in that Defiance failed to provide an insurance verification (pursuant to section 5H(i) of the RFP) and failed to sign a mandatory non-collusion clause.

Barriere argued in defence first that the insurance verification issue related to terms of the contract after the bid had been awarded, and that while Defiance did not provide a document from its insurance company, Defiance did complete the insurance verification, which was all that was expressly required. Second, Barriere argued that since the non-collusion clause was set at the bottom of a page, with another clause beginning with “Further, […]” at the top of the next page. Defiance did sign below that second part. The judge held, based on the evidence provided, that Defiance’s bid was compliant in both regards.

An important part of Murray Percha’s allegations rested on Defiance’s first-envelope bid, which included two statements indicating that 3% of the price received would be returned to Barriere. As part of this note, Defiance included an approximate calculation of that 3%, thereby indirectly – and, as Murray Percha argued, improperly – potentially allowing the assessors to be aware of the bidding price, which was meant to be only part of the second envelope. Murray Percha argued that this undermined the integrity of the bidding process. The assessors testified that at the time of reading the first envelopes, they had not realized that Defiance had allowed them the means to calculate the proposed price, nor did they so calculate.

On the Judicial Review application, the judge held that the appropriate standard of review for assessing Barriere’s decision to award the contract to Defiance was reasonableness – in other words, did the decision fall within a range of possible and acceptable outcomes?

Was the decision to award the contract to Defiance unreasonable in light of the price disclosure issue? You be the judge!

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The judge held that the decision to award the winter road maintenance contract to Defiance was reasonable because it was within the range of possible and acceptable outcomes. Further, the contract had already been entered into and Defiance had been providing winter road maintenance for the past year. This case illustrates that, in the absence of Contract A obligations, the courts can still intervene in a contract award decision by a public body if they determine that decision to be unreasonable. In this case, the BC Supreme Court confirmed, however, that a court is not entitled to ‘second-guess’ that public body about the process of evaluation or to substitute its opinion for that of the committee with regard to the points to be awarded on each of the categories. This is consistent with general common law principles as well.

Murray Percha’s claim was dismissed and the company was ordered to pay costs to Barriere.

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