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20| PROCUREMENT "GOOD PROCUREMENT NEEDS FLEXIBILITY BUT, AS PROCUREMENT LAW GROWS, IT BECOMES MORE STRICTLY REGULATED AND LESS AMENABLE TO FLEXIBILITY." "Procurement law is not well understood by many, and it's counter-intuitive. People who give procurement advice, including internal corporate staff responsible for procurement, are usually seen by business or project teams as barriers to fast and efficient procurement. Procurement departments are often seen as overly bureaucratic and they're often under siege. "Growing concern for bid rigging (as in the Québec corruption inquiry) has led to development of procurement statutes, resulting in a mix of common law, trade agreements and statutory influences. "[Most fundamentally, however] procurement law is generally based on Supreme Court of Canada (SCC) case law and is not easily translated into day-to-day business rules." With the stated objective of maintaining the integrity and transparency of the bidding process, the SCC has issued three landmark rulings: 1) R. (Ont.) v. Ron Engineering; 2) M.J.B. Enterprises Ltd. v. Defence Construction; and 3) Martel Building Ltd. v. Canada. In Ron Engineering, the company submitted a flawed bid with an unrealistically low price, discovered its mistake and asked to make changes. Changes were refused, the contract was awarded to another bidder and the project owner kept Ron Engineering's bid deposit of $150,000. The SCC held that the bid process was, in essence, two contracts: Contract A, in which each bidder contracts with the project owner to do the work specified in the request for proposals (RFP) for a specific price, should the bid be accepted; and Contract B, in which the project owner contracts with the winning bidder to perform the work. Ron Engineering, in which the SCC ruled against the company, has been interpreted to mean that the submission of a bid forms Contract A – at the moment of submission – and that any changes thereafter cannot be allowed without calling into question the integrity of the bidding process. In M.J.B., Defence Construction tendered for construction bids and included a privilege clause in the RFP, which said, "the lowest or any other tender shall not necessarily be accepted." Sorochan qualified its bid by submitting an alternative price and a accep launc tive p plian Th an im comp Soroc range of th that comp be ac have "nuan bids c for aw the lo terms origin Ma three office Depa appro into plate sugge those Work and, Lexpert®Ranked Lawyers Hull, Robert G.S. Hurley, John Gowling Lafleur Henderson LLP (416) 369-7313 robert.hull@ gowlings.com Gowling Lafleur Henderson LLP (514) 392-9431 john.hurley@ gowlings.com Mr. Hull is a partner in corporate, commercial, securities law, specializing in real estate securities and fund formation. He also represents numerous domestic and international business concerns active in the Canadian industry sectors. ROB-Infrastructure.indd 20 Mr. Hurley has extensive experience in commercial law, with special emphasis on First Nations, energy and infrastructure, environmental law, regulatory matters and international development. Jetten, C. Dawn Johannsen, Helmut K. Jolicoeur, Marc M. Kanargelidis, Greg Katz, Blake, Cassels & Graydon LLP (416) 863-2956 dawn.jetten@blakes.com Fasken Martineau DuMoulin LLP (604) 631-4819 hjohannsen@fasken.com Borden Ladner Gervais LLP (613) 787-3515 mjolicoeur@blg.com Blake, Cassels & Graydon LLP (416) 863-4306 greg.kanargelidis@ blakes.com Stikem (514) wkatz Ms. Jetten is a partner in Blakes' Financial Regulatory Services Group. She provides advice to Canadian and foreign financial institutions in connection with a wide variety of services required by these clients, including financing of infrastructure projects. Mr. Johannsen, also a professional engineer, focuses on construction law including infrastructure, PPP, procurement, dispute resolution, litigation, insurance and contracts. His experience incorporates hydro, rapid transit, LNG and pipeline projects. Mr. Jolicoeur focuses on crown corporations and public institutions in his corporatecommercial practice. His advice embraces P3s, infrastructure projects, contract reviews, corporate matters, strategic alliances, financing and governance. Mr. Kanargelidis' practice embraces all areas of international trade, customs and commodity tax. He has extensive experience advising public-sector clients on the application of the government procurement provisions of international trade agreements. 13-08-06 10:13 AM Mr. K the fir Group comp M&A privat and in public place privat

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