February 23, 2010
by Lisa Wichmann
From bidder disputes to landmark court cases, 2010 is shaping up to be a busy year for legal issues. In early January, Purchasingb2b convened a roundtable of legal and procurement experts to delve into the major drivers for the months ahead.
The general prediction is that we’ll see more disputes this year—partly because of the poor economy. Participants talked about ways to avoid litigation through careful drafting, and how to best manage disputes when they arise. They also discussed new regulations such as the Ontario government’s Supply Chain Guideline.
“Because of the way it’s been drafted, [the guideline] has triggered a very strong reaction from the marketplace,” said Denis Chamberland, a commercial lawyer with Aird & Berlis LLP (Toronto). “There are many public buyers that have started to adjust their practices and their policies to comply with the new guideline requirements.”
Currently under review, the guideline aims to bring more accountability to public procurement. There’s a mandatory requirement for organizations to set up bid protest procedures, allowing suppliers to submit protests over any aspect of the procurement process. It will require some adjustment, but overall, Chamberland said the guideline is positive.
“It’s going to raise the bar enormously…within the broader public sector, and one effect of that will be [improvement] in the private sector,” he said. “The supplier base is going to become much more knowledgeable about procurement and as that happens, we’re more likely to see a lot more debriefings than we’ve had in the past, and some disputes as well…which isn’t necessarily a bad thing.”
Massively out of step
Those disputes will likely prompt public agencies to develop clearer rules around procurement. But the guideline does have a serious drawback. It favours the ‘Contract A/Contract B’ method of buying that’s been in place since the R vs Ron Engineering case back in 1981, Chamberland said.
In that notorious case, the Supreme Court of Canada decided Contract A is formed when a bidder responds to a request for proposal (RFP). At that point, the buyer must deal fairly and equally with all bidders without showing favouritism.