Electronic Tendering
Duncan W. Glaholt
Glaholt LLP
What is Electronic Tendering?
Two versions exist today:
(a) Internet based system that displays a
description of the commodity being
procured.
(b) Same as (a), plus option to download
and pay for tender documents.
Future (?)
(a)
Internet based system that displays a
description of the commodity being
procured, plus option to download and
pay for tender documents
(b)
Submission of tender in purely
electronic format, without any paper
being produced.
Why Should I Care?
Suppliers bid on more than $5 billion
annually in government contracts and $12
billion in total through MERX.
MERX ?
MERX is Canada’s official, public sector
electronic tendering service.
Owned and operated by Bank of Montreal,
under contract with the Federal
Government
www.merx.bmo.com
Also:
Aside from the federal government, most
provincial and federal agencies and
departments are required to post jobs over
$25,000 on MERX. Hundreds of hospitals,
school boards, cities, towns etc. post their
opportunities here.
What Do I Do?
Register with MERX
Perform searches for opportunities
Searches can be restricted to area of
interest (i.e. “construction in Ontario”,
“plumbing in Toronto” etc.)
Order documents online (for download or
delivery)
Follow instructions in tender documents
What else does MERX do?
Opportunity Matching:
Notifies subscriber of any new postings in
subscriber’s area of interest
What else does MERX do?
Identifying potential partnerships:
Document request list provides list of all
companies that ordered documents
What else does MERX do?
Awards Database:
Shows which company won a contract and
for what price
What else does MERX do?
Online Amendments:
Automatically sends out amendments
released by buyer
Is MERX the Only System Out
There?
No.
There are provincial systems & private
systems
British Columbia
BC Bid
www.bcbid.gov.bc.ca
Nova Scotia
N.S. Public Tenders Notice Service
www.gov.ns.ca/finance/tour/
New Brunswick
N.B. Opportunities Network
www.gnb.ca/0099/tenders/index-e.asp
Newfoundland & Labrador
Nfld. & Labrador Procurement Services
www.gov.nf.ca/tenders/
Others
BIDS – Atlantic Canada’s Bidding Service
www.bids.ca
PODS – Procurement Opportunities and
Delivery System
www.pods.net
Others
For more links, see
www.summitconnects.com, online
procurement links
So What’s the Difference?
As it works right now, the only difference
between traditional tendering and
electronic tendering is that the jobs are
posted online and the tender documents
may be downloaded online.
The submission of bids is usually still in
the traditional format, maybe accompanied
by a copy on disk.
The Legal Framework
Two Statutes:
Provincial:
Electronic Commerce Act, 2000, S.O.
2000, c. 17
Federal:
Personal Information Protection and
Electronic Documents Act, S.C. 2000, c. 5
Electronic Commerce Act
You don’t have to accept electronic
information if you consent to do so.
But: Consent may be inferred.
(s. 3)
Electronic Commerce Act
Legal requirement that a person provide
information or a document in writing is
satisfied if provided in electronic form if the
information or document is
(a) accessible by the other person so as to
be usable for subsequent reference; and
(b) capable of being retained by the other
person
(s. 7)
Electronic Commerce Act
19(1) An offer, the acceptance of an offer or any other
matter that is material to the formation or operation of a
contract may be expressed,
(a) by means of electronic information or an
electronic document; or
(b) by an act that is intended to result in electronic
communication, such as,
(i) touching or clicking on an appropriate icon
or other place on a computer screen, or
(ii) speaking.
(2) Subsection (1) applies unless the parties agree
otherwise.
Electronic Commerce Act
21. An electronic transaction between an individual and
another person's electronic agent is not enforceable by
the other person if,
(a) the individual makes a material error in electronic
information or an electronic document used in the
transaction;
(b) the electronic agent does not give the individual an
opportunity to prevent or correct the error;
(c) on becoming aware of the error, the individual
promptly notifies the other person; and
(d) in a case where consideration is received as a result
of the error, the individual,
(i) returns or destroys the consideration in
accordance with the other person's instructions or, if
there are no instructions, deals with the consideration
in a reasonable manner, and
(ii) does not benefit materially by receiving the
consideration.
Potential Problem:
Section 21 is in direct contrast to the law
as stated in Ron Engineering, where a
contractor was held to be bound to a
contract even when the owner was made
aware of a mistake in the contract.
Electronic Commerce Act
Time of sending of electronic information
or document
22. (1) Electronic information or an
electronic document is sent when it enters
an information system outside the sender's
control or, if the sender and the addressee
use the same information system, when it
becomes capable of being retrieved and
processed by the addressee.
Electronic Commerce Act
(3) Electronic information or an electronic document is
presumed to be received by the addressee,
(a) if the addressee has designated or uses an
information system for the purpose of receiving
information or documents of the type sent, when it enters
that information system and becomes capable of being
retrieved and processed by the addressee; or
(b) if the addressee has not designated or does not use
an information system for the purpose of receiving
information or documents of the type sent, when the
addressee becomes aware of the information or
document in the addressee's information system and it
becomes capable of being retrieved and processed by
the addressee.
Electronic Commerce Act
Places of sending and receipt
(4) Electronic information or an electronic
document is deemed to be sent from the
sender's place of business and received at
the addressee's place of business.
Electronic Commerce Act
Place of business
(6) If the sender or the addressee has more than
one place of business, the place of business for
the purposes of subsection (4) is the one with
the closest relationship to the underlying
transaction to which the electronic information or
document relates or, if there is no underlying
transaction, the person's principal place of
business.
Electronic Commerce Act
Habitual residence
(7) If the sender or the addressee does not
have a place of business, the person's
place of habitual residence is deemed to
be the place of business for the purposes
of subsection (4).
Personal Information Protection
and Electronic Documents Act
Part I: Personal Information Protection
Part II: Electronic Documents
Personal Information Protection
and Electronic Documents Act
Highlights:
Federal forms and documents may be filed
electronically
Requirement that document be in writing may be
satisfied by electronic document
Requirement that document be in its original
form may be satisfied by electronic document
Requirement for signature may be satisfied by
electronic signature
Potential Problems With Pure
Electronic Tendering
Security:
Threat of others accessing information
sent through the internet
Threat of others altering information sent
through the internet
Potential Problems With Pure
Electronic Tendering
Computer issues:
Software (compatibility; updates; antivirus; encryption)
Internet (server; size; speed)
As Yet Unanswered Questions
When has a purely electronic tender been sent
and received? (see s. 22 of the Electronic
Commerce Act)
How does one make sure that it has been
received in the same form it was sent?
How does a purely electronic tender remain
“sealed”?
(see S.N. Bunston, “Electronic Tendering:
Potential Risks and How to Avoid Them”,
Toronto, Canadian Institute, 2002)
Case Law
Siemens Westinghouse Inc. v. Canada
(Minister of Public Works and Government
Services)
(2000), 260 N.R. 367 (F.C.A.)
Siemens Westinghouse Inc. v. Canada
(Minister of Public Works and Government
Services)
(2001), 202 D.L.R. (4th) 610 (F.C.A.)
Facts
Public Works gets requisition from
National Defence for work done on naval
vessels
Public Works posts letter of interest on its
electronic tendering website
Three bidders emerge, one of them
Siemens
Siemens is awarded contract
Facts (continued)
Two other bidders complain that Siemens
failed to include experience in bid
documents and that bid was noncompliant
Public Works gathered necessary
information from other sources
Two other bidders argue that Public Works
“repaired” defective bid
Decision
Request for Proposals entitled Public
Works to verify all statements relating to
work experience
This necessarily included a right to go
outside the boundaries of the bid to gather
information
Bid was responsive
Criteria
“Ensuring compliance by potential bidders
with all mandatory requirements of
solicitation documents is one of the
cornerstones of the integrity of the
tendering system.”
Criteria
“Procuring entities must evaluate a
bidder’s conformance with mandatory
requirements thoroughly and strictly.”
Criteria
“[The requirements should be] interpreted
as a whole with consideration of the
overall purpose and objectives of the
Request for Proposal.”
Note:
The Court applied these criteria without
any specific reference to the fact that an
electronic tendering system had been
used.
There seems to be no reason why the
criteria developed for traditional tendering
situations should not be applied merely
because such a system was used.