Court Alternatives to Add to Your Toolbox

An important issue that various players in the construction industry must juggle with is time. 

Execution time, payment terms, winter period, etc. If a dispute or legal issue arises during a construction project, whether it occurs before the contract is signed, during the project, or at the delivery stage, it could result in significant delays, weather-related challenges, or financial difficulties for the company involved. Quick and effective intervention is necessary to prevent these issues from escalating,

Unfortunately, the current legal system does not always provide the necessary efficiency and speed in this context. Therefore, what other options are there for professionals in the construction industry?

In this article, we will discuss an extrajudicial procedure that was recently used by the undersigned on behalf of a client. The process involves the recall of tenders by an Ad Hoc Committee of the Bureau des Soumissions Déposées du Québec (“BSDQ”). While this procedure is not new, its recent success highlights the importance of making it known and accessible to general contractors in Québec.

The BSDQ’s Ad Hoc Committee’s Decision on the Recall of Tenders

On October 16, 2015, the BSDQ messaged its users explaining the recall of tenders process according to Section I-1.1 of its Tendering Code (“Code”). The details of the process were provided as follows.

• The Ad Hoc Committee’s role is to assess and decide, upon request from a contractor who has been awarded a project, whether or not to allow a recall of tenders based on whether the tenders received are not-compliant, suitable for comparison as they are for different work, or are unreasonably priced considering prevailing market conditions.

The recall of tenders is relevant for all successful recipient contractors who have signed the commitment to the BSDQ as prevailed at Section C-2 of the Code, who have taken possession of at least two tenders, and who finally does not want to award the contract to any of those tenderers.

Indeed, if a successful recipient contractor fail to comply with the obligation to award the contract to one of the tenderers who addressed him the tenders he had taken possession of, he may face complaints, fines, and damage claims. The benefit of the recall of tenders process decided by an Ad Hoc Committee, is that it is a legal and legitimate procedure and, therefore, free from sanctions if followed appropriately. Consequently, the contractor can refuse the received tenders they have had possession of, which is not an option in other circumstances.

Thus, by the recall of tenders process, the successful recipient contractor has a way of disregarding tenders he has acquired but that do not benefit its interests in accordance with the BSDQ regulations. It’s important to note that only the three alternative conditions specified in Section I-1.1 of the Code can justify a recall of tenders.

Preparing a recall for tenders application is a straightforward and informal process. The procedure only needs to meet the following requirements:

• Be in writing;
• Indicate how the tenders received by the successful recipient contractor are non-compliant, non-comparable or unreasonably priced;
• Be supported by relevant documentation, including plans and specifications, addendums and tenders received; and
• Be accompanied by a cheque for $1,000 or $3,000, depending on the reason for the application for recall of tenders.

What Steps Are Required to Obtain a Decision From the BSDQ Ad Hoc Committee? 

The request for the recall of tenders by the BSDQ Ad Hoc Committee requires the completion of the following steps:

• 1. Sending a request for a call for tenders, the accompanying documents and a cheque to the order of BSDQ for the required amount;
• 2. The creation of the Ad Hoc Committee, consisting of three contractors hired by the BSDQ, including a recipient contractor and a contractor having expertise in the governed specialty. These three contractors must be impartial to the project at hand and appointed by the BSDQ’s Director General or by his representative;
• 3. The Ad Hoc Committee, which includes the BSDQ Director in addition to thethree appointed contractors, processes the application. If needed, consultants selected by the committee may also be involved. However, only the three contractors are allowed to vote; and
• 4. The receipt of the Ad Hoc Committee Decision.

It should be noted that if the committee unanimously agrees that at least one tender is conforming, reasonably priced or comparable, the application for recall of tenders will be refused. On the contrary, if the committee members have conflicting opinions, the recall of tenders will be accepted, and the accompanying payment will be returned to the contractor who requested the recall of tenders.

One of BCF Business Law’s clients, a general contractor that is also a recipient contractor according to the Code, was able to use the recall of tenders process to its advantage when he demonstrated that all of the tenders received for the “Pre-cast concrete” specialty were non-compliant. On March 13, 2023, the application for a recall of tenders was submitted to BSDQ, and on April 5, 2023, the client received confirmation that the tenders were non-compliant and that the Ad Hoc Committee had authorized the recall of tenders.

The Ad Hoc Committee of BSDQ has made a favourable decision, which serves as an example of a useful tool for general contractors to quickly resolve construction project issues. The process was successful and completed in under a month. Additionally, the relatively low cost of this process should not be disregarded when compared to the expenses of litigation or fines for not following the Code.

In conclusion, while there may be differing opinions on the BSDQ, and a potential reform is on the table, the Québec legislator has demonstrated their commitment to supporting the construction industry by offering practical and affordable tools, such as the recall of tenders through an Ad Hoc Committee. Therefore, to avoid facing fines, penalties, or any other legal consequences, it is beneficial for those in the construction industry to use all the tools they have in their toolbox.

These intentions of the Québec legislator are also reflected, among other things, in the adoption in the spring of 2022 of “Bill 12, An Act mainly to promote Québec-sourced and responsible procurement by public bodies, to reinforce the integrity regime of enterprises and to increase the powers of the Autorité des marchés publics”, which reflects the success of the Pilot Project to facilitate payment to businesses that are parties to public construction contracts and related subcontracts by amending the Act respecting contracting by public bodies.

If you have any questions, please do not hesitate to reach out to our Construction Litigation Team, who will be happy to assist you.