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PMAC 2012: Legal ins and outs

PMAC session focuses on developments affecting procurement law


June 7, 2012
by Michael Power

Is it possible to put out an RFP without using Contract A? Yes, said Maureen Sullivan, president of National Education Consulting Inc. But make sure your language is as specific as possible.

Sullivan was speaking during PMAC’s annual conference during a session called Legal Update and Best Practices: New and Emerging Trends in Procurement and Contract Management. During the talk, Sullivan mentioned the enduring fallout from the Tercon case, which focused on whether Contract A existed with the BC government. Ultimately, the Supreme Court of Canada ruled 5-4 that Contract A had existed and that the BC government breached the contract.

“It doesn’t get any closer than that,” she said of the decision. The lasting effect of the decision is, if the courts had that much trouble agreeing, how can procurement deal with it? A sound technique, Sullivan said, was to make deliberate, conscious choice in the planning stage and work closely with legal advisors. As well, make the language as specific as possible to avoid having the courts determine whether Contract A exists. It’s possible to avoid using Contract A, but that requires precise language customized to a particular procurement. “It’s tricky,” she said.

Sullivan also touched on the issue of non-compliance to RFPs. It’s possible to accept non-compliant bids, she said, but the decision to do so depends on several issues, including the dealings between the parties and the language in solicitation document. In one case, she pointed out, the courts in BC allowed a non-compliant bid because the language in the bid document was clear that such bids would be accepted.

But, just because you can do it doesn’t mean you should. “I think it’s a bag of snakes,” Sullivan said. For example, a bid can be accepted even though it comes in 10 minutes late, but a company may as why a bid is rejected if it’s submitted 15 minutes late.

Sullivan also stressed the importance for procurement professionals to stay abreast of developments in laws affecting procurement. “It’s better to read a case than to be a case.”