Legal Framework. Principles of Law. Responsive and Responsible

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Abraham Young
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Legal Framework Contracting in the public sector is based on the principle of competitive bidding. Competitive bidding requires that certain legal principles be followed.

1 Legal Framework Contracting in the public sector is based on the principle of competitive bidding. Competitive bidding requires that certain legal principles be followed. This legal framework originated in construction law, but it applies to all forms of tendering. Principles of Law Responsive and Responsible In Canada a primary principle of contract law related to tendering states that two contracts are formed during the tendering / contracting process. The first contract - Contract A the Bid Contract is formed between the purchaser and each bidder. This means that each bidder is bound to honour their price until such time as it is withdrawn, in accordance with the provisions of the tender. Similarly, the purchaser is bound to give each bid a fair consideration. Contract B, the Work Contract on the other hand, is the actual contract between the successful bidder and the purchaser. This contract may be in the form of a Purchase Order or Service Contract. When your tender specifies a closing date and time, and specifies that the bids must be held irrevocable for a specified time, then this legal concept comes into play. It is unlikely that this would be an issue on smaller value contracts; however, you should be aware that there are legal implications and responsibilities that must be considered in the contracting process. The Government Contract Regulations carry the force of law and provide primary direction to contract authorities when tendering. When evaluating tenders only responsive tenders from responsible bidders will be considered according to the Government Contract

2 Regulations. In these regulations, responsive means, in relation to a tenderer, that the person has submitted a tender that conforms in all material respects to the invitation to tender. responsible means, in relation to a proposer or a tenderer, the capability in all respects to perform fully the contract requirements and the integrity and reliability to assure performance of the contract obligations. Responsive If a requirement is not complied with (e.g., provision of bid security) the tender is non-responsive. If the bidder changes the tender documents or if the bid is qualified in some way, the bid is non-responsive. For example, if the bidder changes the requirement Supply and install 16 metal windows to Supply and install 16 wood windows, the bid is non-responsive. If a tender is non-responsive, this may be grounds to disqualify the tender; however, this is not so in every case. For example, if a tender requests an optional price for wood windows in place of metal windows and the contractor does not provide a price for the option, the tender is nonresponsive but would not automatically be disqualified. A tender may be deemed non-responsive by the contracting authority. Responsible In deciding whether a proponent or bidder is responsible, some factors to be considered include: financial resources organization, plant and equipment personnel - managerial and technical

3 Void and Voidable Contracts Information Sources experience on similar types of contracts record on previous projects with GNWT references from previous owners To assist in this assessment, financial and technical reports should be obtained on the bidders under consideration (usually the low bidder only). A bidder invited to tender cannot normally be deemed not responsible. A bidder should be deemed not responsible only by the Deputy Minister. When contracts become unenforceable, they are said to be void or voidable. These two terms, while similar, reflect different degrees of imperfection in the agreement. If a contract is void, there are usually no legal effects on either party, since there is in law, no contract. Neither may sue the other on the contract. However, this is not to say they have no right of action, since they may possibly sue in tort. Void contracts are usually contracts effected by mistake (mutual mistake of the parties) or illegality (contracts in breach of statute or regulations). Voidable contracts occur mostly as a result of misrepresentation, or failure to observe statutory requirements with respect to form. When a contract is voidable, it will be valid until it is set aside by one of the parties. The Financial Administration Act contains the primary rules governing contracting of all types with the GNWT. Flowing from this Act are the Government Contract Regulations, which have the force of law. For further information, refer to the Financial Administration Manual: Government Contract Regulations

4 Directive 3301 Government Contracts - General Directive Aircraft Chartering The Department of Public Works & Services offers contracting advisory services. You can contact the Contracts and Procurement Services of the Asset Management Division.

Special Provisions. Special Instructions to Bidders. Instructions to Bidders. General Conditions

Special Provisions. Special Instructions to Bidders. Instructions to Bidders. General Conditions Contract No.: FORM OF TENDER We, the undersigned Contractor(s) have carefully examined the attached documents as herein listed and forming part of this tender. DOCUMENTS INCLUDED IN CONTRACT Special Provisions