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22| PROCUREMENT "IF A PROCUREMENT GOES REALLY BADLY AND IT'S ON THE FRONT PAGE OF THE [NEWSPAPER], IT'S GOING TO BE ARTICULATED IN THE TERMS OF CORRUPTION OR POOR MANAGEMENT." tenders for major projects can run to two thousand pages and preparing compliant bids can involve multi-skilled teams, thousands of hours of work and more than a million dollars in costs. "That's where you see most of the litigation in this space," Salzman says. To simplify the process, she says, the Ontario Government has created "boilerplate" contract components for a range of repeatable projects, such as schools, hospitals, roads and bridges, making it easier for the government to produce tenders and more efficient for regular bidders to respond. Salzman and Berg say the Contract A/ Contract B construct is unique to Canada and the rigidity of the process is often difficult for foreign companies to understand. "You can't 'sort of ' comply," Berg says. "Failing to file a single document," Salzman adds, "can get you kicked out. It's something that many companies are not familiar with [and] the formality of the process is a rude wake-up call." In order to make tendering less of a black box, project owners, both government and private sector, frequently use requests for qualifications (RFQ) and requests for expressions of interest (RFEI) to pre-qualify a limited number of bidders. This gives selected bidders confidence that it's worth the cost and time to submit a bid. Fairness and international trade agreements do not preclude governments from specifying a requirement for local content in a tender, they say. While Ontario encourages outside bidders, it sometimes specifies a requirement for provincial content in the tender. Outsiders can meet the requirement by joint venturing with a local company and may need to do this in any case, in order to be price competitive. But the project owner must specify in its RFP the precise numerical weighting it will give to local content. The World Trade Organization's (WTO) Appellate Body has recently ruled that Ontario's Feed-In Tariff Program discriminates against foreign suppliers of green-energy equipment and components by setting domestic content levels. Ontario has said it will comply with the WTO ruling, but has not said how. Mark Kortbeek, with the Edmonton office of Bennett Jones LLP, calls Canadian law "a bit of a minefield for a procuring entity." In the public sector, Kortbeek notes, pricing becomes a matter of public record the minute bids are opened and a low bidder who is passed over for any reason "may want to take a run at the procurer." The project owner's potential liability extends beyond the cost of the bidder's expenses to include the bidder's lost profit, which, in a successful suit, can be gained "without having to do any of the work." Procuring entities frequently try to inoculate themselves against litigation by writing broad, gener Terco (Tran stand can b BC M cond subse pre-q to bi clause claim er, as by su be de Te those Brent that Brent Terco Th was n tion. breac duty the r that t eligib and t vague at the Lexpert®Ranked Lawyers Kraag, Scott Krupat, Howard Torys LLP (416) 865-7980 skraag@torys.com Davis LLP (416) 365-3510 hkrupat@davis.ca Mr. Kraag emphasizes infrastructure development, the renewable energy sector and mining in his project finance practice. He represents lenders, sponsors, equity investors, underwriters, contractors, service providers and public authorities. Mr. Krupat's infrastructure and construction practice, including claims, encompasses all construction industry sectors, as well as energy projects. Owners, contractors, suppliers, design professionals and engineers are among his clients. ROB-Infrastructure.indd 22 Kussner, Barnet H. Lalonde, Paul M. Lamothe, Jean G. Ledgett, Michael Lenn WeirFoulds LLP (416) 947-5079 bkussner@ weirfoulds.com Heenan Blaikie LLP (416) 643-6828 plalonde@heenan.ca Stikeman Elliott LLP (514) 397-3326 jlamothe@stikeman.com Heenan Blaikie LLP (416) 643-6840 mledgett@heenan.ca Benn (403) lenno benn Mr. Lalonde focuses on government contracting law including contracting disputes, international trade and government relations. He is an expert on competitive contracting and trade agreements relating to government procurement. Mr. Lamothe acts for lending syndicates and borrowers in his corporate and project finance practice. He has developed the corporate and contractual structure of a number of industrial and environmental projects. Mr. Ledgett is National Co-Chair of Heenan Blaikie's Infrastructure & P3 Group, which advises governments and their agencies as well as private-sector developers, operators, lenders and investors on P3 projects in Canada and abroad. Mr. Kussner's municipal law practice includes a focus on P3s, municipal capital facilities and Official Plan reviews. He regularly acts as counsel before the OMB and has appeared at all court levels, including the Supreme Court of Canada. 13-08-06 10:15 AM Mr. Le servic includ financ credit and p transequip client banks and g

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