The BC Construction Association (“BCCA”) issues this Alert as a service to the members of the Regional Associations and industry at large to help educate them on the risks associated with changes in procurement. All opinions stated below are those of the BCCA and reflect the publicly-stated policies of BCCA.
This Industry Alert was drafted and reviewed with the assistance of legal counsel.

Some public sector owners have started writing their procurement documents, whether Request for Proposals (“RFPs”), Invitations To Tender (“ITT”) or Requests for Qualifications (“RFQ”), with terms that expressly avoid those owners having to act fairly. They are doing this by writing into their procurement documents clauses that remove “Contract A.”

In the opinion of BCCA, the removal of “Contract A” is the most significant violation of public sector procurement processes that the construction industry has seen to date. It means that those who work in the construction industry cannot proceed on the assumption that procurement is “business as usual” where “Contract A” is removed. With the removal of “Contract A”, combined with other poor or eroding procurement practices, the construction industry can no longer assume they are participating in fair, transparent and competitive procurement.

Each general contractor, subcontractor and supplier needs to understand the impact the removal of “Contract A” represents in order to make informed business decisions: deciding if pursuing these projects is worth the risk.

Whether they realized it or not, for the last 40 years, owners, contractors and subcontractors all knew where they stood in procurement because of a court case called Ron Engineering. As a result of the actions of some owners now, that is no longer the case.

Since 1981, when the Supreme Court of Canada delivered its reasons for judgement in the Ron Engineering1 case, courts across Canada have universally relied on the law of contract to protect the integrity of the procurement process.

Before Ron Engineering, procurement was chaotic, where bidders were subject to the misconduct of unscrupulous owners, and owners did not know their position with non-compliant bidders. All of that changed in Ron Engineering, where the Supreme Court of Canada established the existence of a bidding contract between the owner and compliant bidders, which it referred to as “Contract A”.2.

Since Ron Engineering, courts across Canada have used the “Contract A” analysis to ensure that the procurement process was fair for everyone involved by setting “bidding rules” that needed to be followed and awarding monetary damages to both bidders and owners where the other party failed to play by those rules.

With the establishment of “Contract A,” the Owner generally has a duty to treat all bidders fairly and equally, which means they must review all qualifying bids and reject any that do not meet the stated requirements. This puts a big responsibility on owners involved in “Contract A” to be very careful in their actions and follow their own stated procurement requirements but also binds bidders to enter into the construction contract (“Contract B”) if they are selected in accordance with the procurement documents.

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