Breaking New Ground—Stories from Defence Construction Breaking_new_ground | Page 105

While DCC was in the midst of these changes, the Auditor General carried
out its third Special Examination of DCC. It found the Corporation without
significant deficiency in strategic planning, contract, contract management
and resource management, while in its areas of core competence—
contracting and contract management—it observed that DCC was well
regarded by both industry and clients.
MJB -vs- Defence Construction (1951) Limited
It is not unusual for contractors to submit claims or even take legal action
over actual or perceived concerns about contractual issues. In one case,
however, a contractor took the issue as far as the Supreme Court of Canada,
resulting in an oft-cited legal precedent in Canadian construction law.
In 1993, DCC called for tenders for work on a water distribution system at
CFB Suffield, in Alberta. The lowest bidder had included a note on its
tender clarifying an assumption used in calculating the tender amount. DCC
accepted the tender; however, the second lowest bidder, MJB Enterprises, sued
DCC, claiming that the qualification of the tender rendered it non-compliant
and the contract should have been awarded to MJB. Although both the trial
and appeal courts in Alberta ruled that the privilege clause (stating that DCC
may not accept the lowest or any tender) gave it the right to do as it saw fit
(in this case to accept a clarifying note), the Supreme Court of Canada
disagreed. The judgment stated that while tender-calling authorities can
award to other than the low bidder for a valid reason, the contract must be
awarded to a compliant bid, which, in the court’s opinion, was not done in
this case. An award of damages was made to MJB.
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