WESTVILLE – A local construction company will be paid more than $300,000 by the Town of Westville after taking a lost tender bid to court.
The Nova Scotia Supreme Court has awarded C. F. Construction $343,745 for lost damages in regard to its lost tender bid for work in the Town of Westville in September 2014 that involved the upgrade of a sanitary sewer system.
The construction company alleges that Westville issued a tender seeking bids from contractors for the delivery of certain work and service that involved sanitary sewer system upgrades.
C.F. Construction stated it submitted a bid and it was in compliance with all of the terms of the tender. Four other companies submitted bids with prices ranging from $572,000 to $1,132,000. CF Construction had the lowest bid but the town awarded the contract to S.W. Weeks Construction Limited.
In its lawsuit against the town, the company states the town rejected its bid and breached contract obligations. As a result, C.F. Construction said it suffered losses and damages that include loss of profit from work, loss of opportunity and profit from other projects and costs and expenses in connection with preparation of the bid.
The Town of Westville argued that although C.F. Constructions bid appeared compliant on paper, the company’s lead for the project disclosed that C.F. Construction’s bid price included the cost of a cast-in-place concrete wet well, not the pre-cast concrete wet well specified in the documents.
It said this made C.F. Construction’s bid non-compliant and the town had no choice but to reject it.
In its written decision released on May 23, 2018, The Nova Scotia Supreme Court said the law is clear that compliance is measured objectively at the time the bid is submitted.
“This approach safeguards the integrity of the bidding process by preventing bidders from escaping their obligations on the basis of a calculation error or other subsequently discovered information,” said Justice Glen MacDougall.
The court said C.F Construction bid, when measured objectively, was compliant with the terms of the tender call and as soon as the company submitted the bid, it was legally obligated to perform the work required in the bid documents, and that included the construction of pre-cast wet well for $572,000, if the town accepted the bid.
Evidence proved the town had contacted the company assuming there was something wrong with its bid since it was considerably lower than the other three. During a conversation with the company’s project lead, there was discussion about alternative components and this led the town to believe the company was going use a type of component not compliant with the bid.
So, the town accepted the bid from S.W. Weeks for a price of $674,000 while the total cost of the project was $730,000.
The town says the tender documents set out the only valid procedure for bidders to request alternatives to specified products before close of bids. C.F. did not use this procedure to request that a cast-in-place wet well be deemed an approved equivalent to a pre-cast wet well.
The town says that by submitting a bid priced to include an alternative product without prior approval, C.F. did not accept the terms of the town’s contract.
C.F. says there was no requirement for a bidder to demonstrate
how it priced individual components of the work in calculating its
lump sum bid price, and the town breached its duty of fairness by evaluating C.F. Construction’s bid on the basis of this undisclosed criteria.
MacDougall said when the town disqualified the bid because of its understanding on how the company priced an individual component (a wet well) in its lump sum bid price, the town breached its duty to treat all bidders fairly and equally.