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. BREAKING NEW GROUND DEFENCE CONSTRUCTION CANADA 95