Lawsuit over RNC HQ construction contract fails

Supreme Court rules government correct to disqualify lowest bid

Published on February 22, 2014
Construction on the RNC headquarters building in St. John’s. — File photo by Keith Gosse/The Telegram

A construction company that was disqualified from a tendering process despite submitting the lowest bid for renovations at the Royal Newfoundland Constabulary headquarters in St. John’s has lost its lawsuit against the provincial government.

Pomerleau’s bid of $31.3 million was approximately $1.7 million less than Olympic Construction’s successful bid of almost $33 million. The latter company was awarded the contract in July 2010.

Having noticed its bid was the lowest submitted, Pomerleau sought clarification from the Department of Transportation and Works and learned the bid was disqualified because of an incomplete tender form.

The contract, which pertained to the second of three phases for redevelopment with RNC properties, required a detailed specification for elevator maintenance and servicing in the building.

Pomerleau did not complete an appendix concerning the price of the monthly elevator maintenance and service contract or a box requiring information on the present value of that contract.

Olympic Construction’s bid did include that information.

Justice James Adams wrote in a decision rendered Tuesday that instructions to bidders were clear in stating incomplete tenders “will be rejected.”

Although Pomerleau’s bid was the lowest submitted and the government is required to accept the lowest bid, Adams said the bid still must meet the specifications of the tender.

“In the absence of a discretion clause permitting it to waive Pomerleau’s failure to submit a complete bid, the government was required to reject it and award the contract to Olympic (Construction),” wrote Adams.

“To have done otherwise would have been a breach of the government’s duty of fairness to Olympic, the only other bidder, which had submitted a fully compliant bid.”

The company acknowledged its submitted tender was incomplete, but not to the extent it deserved to be disqualified from the process. Pomerleau said information included in another section of the tender covered pricing relevant to the elevator maintenance and service contract and that the total tender amount was not affected.

The government countered that the tender documents were clear in stating that the tender form and all appendices had to be fully completed. It said there was no legal basis in place for the government to accept a non-compliant bid over a compliant one.

Adams ruled the lack of information on a monthly unit price for elevator maintenance and servicing prevented the government from assessing the value of its future maintenance contract.

In addition to losing its case against the government that was initially filed in 2011, Pomerleau is also responsible for the defendant’s legal expenses.

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