Time Limit for Publication of an Amendment to a Call for Tenders – Reflections on the Impact of Recent Legislative Amendments on Your Contractual Strategy
This article first appeared in French in the September 2016 edition of the “Direction APPRO” bulletin of the Quebec Corporation of certified municipal officers (COMAQ).
The time limit for the receipt of bids for construction, supply and services contracts involving an expenditure of at least $100,000 is no less than 15 days following the publication of the call for tenders1.
Since June 10 of this year2, a new rule concerning the publication of amendments to the call-for-tender documents now has a direct impact on planning and time management in connection with your contractual processes.
A legislative change pursuant to a recommendation of the Charbonneau Commission – really?
Under the new rule3, if the tender documents are “amended in such a way as to affect the prices”, the amendment must be sent to the persons who requested a copy of the call-for-tender documents at least seven days before the expiry of the time limit for the receipt of bids. If the seven-day period cannot be complied with, the time limit for the receipt of bids will be extended by the number of days needed to ensure such compliance.
According to the bulletin published by the Ministry of Municipal Affairs and Land Occupancy4, this new provision is pursuant to recommendation 7 of the final report of the Charbonneau Commission, tabled on November 24, 2015. It should be pointed out however that the Commission noted that the time limit of 15 days was at times insufficient due to the scope of a project, or too long where the work was urgent. While a 15-day limit is generally adequate, the Commission had recommended that more flexibility be given to all public project managers:
“[TRANSLATION] Adopt rules allowing public project managers a reasonable time within which to receive bids in accordance with the financial importance and complexity of the project for which the call for tenders was issued.”
In our view this recent legislative amendment clearly does not satisfy the foregoing recommendation of the Commission. In actual fact, the minimum seven-day time limit following publication of an amendment of the tender documents “in such a way as to affect the prices” is constraining for municipalities, not in any way tied to the financial importance and complexity of the project, and will have significant impacts on planning and time management in connection with municipal contractual processes.
While this new rule has applied to public bodies for a number of years now, its uniform application, with no regard for the size of the public entity or the scope of the project involved, seems overly rigid and will force many municipalities to revise their internal processes.
Some approaches to finding a solution
First of all, only an amendment that could potentially have an impact on prices gives rise to a minimum time limit of seven days. Moreover, the answers to the questions raised by bidders will not necessarily entail a modification of the call-for-tender documents. Municipal officials may thus question the advisability of systematically publishing the answers by way of an amendment if they could potentially have an impact on prices. Such questions are however conducive to a debate: if a municipality provides specific details regarding an obligation stipulated in the contract, is that tantamount to an amendment that could potentially have an impact on prices? These reflections do not lead to a clear and definite answer and the municipality must rather opt for a preventive approach.
In this connection, all municipal officials must be made aware of this new rule. They must be conscious of the delays inherent in the process in order to reduce their expectations in this regard. Better planning by way of providing more time for the call-for-tenders process, heightened efforts to be more rigorous in the preparation of the call-for-tender documents in order to avoid having to make revisions through via an amendment are also measures that should be implemented without delay.
Suppliers and contractors will also have to learn to cope with this new measure, which may result in a more restrictive framework for them.
Municipalities have the contractual freedom to specify, in their call-for-tender documents, the rules governing the period within which bidders can submit questions. Thus, municipalities could impose a date beyond which questions would no longer be admissible, in order to better control the risk of additional delays.
The legislation applicable to municipalities provides no guidelines in this regard. The period for submitting questions could end within six or seven days following the publication of the call for tenders and thus allow the publication of an amendment respecting the initial time limit for closure.
This approach may be open to some criticism, as the regulations applicable to public bodies provide that as of June 1, 2016, municipalities are obliged to consider questions submitted up until two business days before the deadline for receiving bids. The legislature did not see fit to add such a provision to the municipal legislation.
Whatever the approach preferred by the municipality, a request for clarification by a bidder, despite being received late, may identify a serious problem with the call-for-tender documents requiring an amendment that may affect the price of the bids. The municipality and its officers may thus have to intervene despite the narrow time limits. Otherwise, their silence could generate contractual and financial risks, or even render it liable.
1 Second paragraph of subsection 573(2) of the Cities and Towns Act and of section 935 of the Municipal Code of Québec
2 Date on which An Act to amend various municipal-related legislative provisions concerning such matters as political financing (Bill 83) was assented to
3 New third paragraph of subsection 573(2) of the Cities and Towns Act and of section 935 of the Municipal Code of Québec
4 Ministère des Affaires municipales et de l’Occupation du territoire, Bulletin Muni-Express of June 28, 2016 (no 9): “Projet de loi no 83 – Loi modifiant diverses dispositions législatives en matière municipale concernant notamment le financement politique”.