An overview of the law relating to tendering and procurement. A brief overview of dealing with construction liens on Indian lands.

1. BRITCO LP
Lunch & Learn
February 16, 2016
Seema Lal

2. ISSUES INVOLVING INDIAN LAND
Liens
 Generally Indian reserve lands are under federal jurisdiction
and are not lienable under the BC Builders Lien Act - therefore
no liens and no lien holdback
 Exception for “designated lands” which are defined in the
Federal Indian Act as reserve lands in which a band has
released or surrendered its rights and interests, e.g., leasehold
interests in Indian lands are not protected from liens or other
enforcement mechanisms

3. INDIAN LAND - Liens (cont’d)
 Fee simple lands that are owned by an Indian or a band are not
protected from seizure under the Indian Act
 Still a gray area: lands subject to land claims but not yet
designated as Indian reserve lands

4. INDIAN LAND (cont’d)
Tax Issues
 Band is not obligated to pay GST for goods delivered or
services performed on an Indian reserve OR if services are
performed off reserve but relate to property interests located on
a reserve
 Goods purchased by Indians or Indian bands exempt from PST
if title to goods passes on reserve, e.g., goods purchased on
Indian land or goods purchased off Indian land but then
delivered to Indian land
 Services related to the provision of the goods exempt from PST
if such services are provided wholly on Indian land

5. TENDERING & PROCUREMENT
BASIC PRINCIPLES
 Is it a tender?
 Contract A/Contract B = implied duty of fairness to all bidders
 Damages - Potential liability for breach of Contract A
 Privilege Clauses

6. IS IT A TENDER?
 Basic criteria:
• Competitive procurement process
• Period of irrevocability
• Binding form of Contract B
• No negotiation of Contract B permitted

7. CONTRACT A/CONTRACT B
 The fundamental principle of the law of tendering for
construction in Canada is that that method of contract
procurement involves two stages of contractual relationships:
R v. Ron Engineering & Construction (Eastern) Ltd.
a) Contract A, which arises between the tendering authority and each
“materially compliant” bidder, the terms of which are generally as set
out in the tendering documents; and
b) Contract B, which is the tendered contract entered into between the
tendering authority and the successful bidder.
Note: Contract A only arises if bid submission is compliant with
tender documents (MJB Enterprises v Defence Construction)

8. OWNER OBLIGATIONS
 Duty to follow express terms of Contract A
 Duty to treat all bidders fairly and equally
 Duty not to accept non-compliant bid and duty not to accept bid
that has an obvious mistake regarding price
 No negotiation with individual bidders
 No duty owed by owner to subcontractor or to JV team
members

9. DUTY OF FAIRNESS
 Consider only compliant bids
 Treat all bids fairly/equally (Martel Building v. Canada)
 Must disclose all evaluation criteria – no hidden preferences

10. DAMAGES
 The Contract A/Contract B analysis means that both the
tendering authority and bidders may be liable for damages if, for
example:
a) an owner purports to award a construction contract to a materially
non-compliant bidder in preference to the lowest compliant bidder;
or
b) a materially compliant bidder refuses to sign a construction
contract and proceed with the work after being awarded the
contract.

11. PRIVILEGE CLAUSES
 The lowest or any tender will not necessarily be accepted.
 Tender irregularity may be a cause for rejection and can
be waived
• however, material non-conformance with tender requirements
cannot be waived
 Price + other criteria + best interest can be taken into
consideration.
 Limited or no liability for treatment of tender (Tercon).

12. PRACTICE POINTS FOR TENDER
SUBMISSIONS
 Have a basic knowledge of tendering law
 Read and understand the totality of the procurement
documents
 Clarify pre-bid questions using designated process
 Quality assurance for tender preparation
 Comply with all tender requirements