Strategies to Overcoming Unconscious Bias in the Workplace

Unconscious bias is hitting the news. From Bay Street to Main Street to Starbucks the impact of unspoken bias is real and harmful to the workplace. Bias stands in the way of making correct decisions in hiring and promoting. It also has a vital impact on your staff and the workplace in general. Let’s explore how we can become aware of our own bias and stop it in the workplace?

 

First, let’s define it. “Unconscious bias refers to a bias that we are unaware of, and which happens outside of our control. It is a bias that happens automatically and is triggered by our brain making quick judgments and assessments of people and situations, influenced by our background, cultural environment and personal experiences. (ECU: 2013 Unconscious bias in higher education) 

 

We all have a bias. The question is, do we identify it and then what do we do about it? In addressing one of the most crucial training issues facing the workplace today, unconscious bias, employers can assist in creating an inclusive, civil and respectful workplace. 

 

Research indicates that unconscious biases are prejudices we have, yet are uninformed of. They are “mental shortcuts based on social norms and stereotypes.” (Guynn, 2015). Biases can be based on skin colour, gender, age, height, weight, introversion versus extroversion, marital and parental status, disability status (for example, the use of a wheelchair or a cane), foreign accents, where someone went to college, and more (Wilkie, 2014). If you can name it, there is probably an unconscious bias for it.

 

Hence if we think we are unbiased, we may have unconscious adverse thoughts about people who are outside our own group. If we spend more time with people from other groups, we are less likely to feel prejudice against them.

 

This universal tendency toward unconscious bias exists because bias is rooted in our brain. Research shows that our brain has evolved to mentally put things together to make sense to us. The brain sorts all the information it is blasted with and labels that information with universal descriptions that it may rapidly access. When we categorize these labels as either good or bad, we tend to apply the rationale to the whole group. Many of the conclusions are taken from previous experiences and learnings.  

In an article, “The Real Effects of Unconscious Bias in the Workplace”, a few of the known unconscious biases that directly impact the workplace include:

  • Affinity bias is the tendency to warm up to people like ourselves.
  • Halo effect is the tendency to think everything about a person is good because you like that person.
  • Perception bias which is the inclination to form stereotypes and assumptions about specific groups that make it awkward to make an objective judgement about members of those groups. 
  • Confirmation bias is the openness for us to pursue evidence that sanctions our pre-existing beliefs or experiences. 
  • Group think is a bias which occurs when people attempt to fit into a specific crowd by mirroring others or holding back opinions and views. This results in individuals losing part of their characteristics and causes workplaces to miss out on originality and creativity.

Horace McCormick’s research found more than 150 identified unconscious biases, making the task of rooting them out and addressing them daunting. For many organizations, however, identifying as many as possible and eliminating them has become a high priority.  

 

You can address discrimination issues by increasing your awareness of your unconscious biases, and by developing strategies that make the most of the talents and abilities of your team members. 

Unconscious behaviour is not just individual; it influences organizational culture as well. This explains why so often our best attempts at creating corporate culture change with diversity efforts seem to fall frustratingly short; to not deliver on the promise they intended.

 

What you can do: 

  • Be aware consciously of your bias 
  • Focus more on the people, on their strengths
  • Increase Exposure to Biases
  • Make small changes 
  • Be pragmatic 
  • Challenge stereotypes and counter-stereotypical information 
  • Use context to explain a situation 
  • Change your perception and relationship with out-group members 
  • Be an active bystander 
  • Improve processes, policies & procedures  

Also, managers can play a crucial role in unearthing these hidden biases by declaring their intentions to be non-biased. They can also provide transparent performance appraisals that emphasis on the employee’s exceptional abilities and skills, and grow a stronger mindfulness of their own unconscious principles.

 

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Dealing with Escalated Situations in Your Workplace

Resolving workplace conflict is an expected part of the job managers and Human Resource Practitioners. Whether you work in education, healthcare, human services, business, or any field, you might deal with angry, hostile, or noncompliant behaviour every day. Your response to the defensive reaction is often the key to avoiding a physical confrontation with someone who has lost control of their behaviour.

These ten De-Escalation Tips will help you respond to challenging behaviour in the safest, most efficient way possible.

  1. Be empathetic and non-judgmental
  2. Respect personal space
  3. Use non-threatening nonverbal communication
  4. Avoid overacting
  5. Focus on feelings
  6. Ignore challenging questions
  7. Set limits
  8. Choose wisely what you insist upon
  9. Allow silence for reflection
  10. Allow time for decisions

 

 To help you towards more efficient conflict de-escalation and resolution, the following basic steps can be followed:

  • Obtain the name of the person with whom you are speaking: People respond favourably to their own name. It also makes the conversation more personal. Ask for the person’s name early in the piece and use it throughout the discussion.
  • Use Active Listening: Clarifying, paraphrasing and using open-ended questions ensure that the individual you are speaking with knows you are aware of their situation and frustrations. Resaying a person’s own words back to them demonstrates that you have understood entirely what they were trying to say.       
  • Show support and suspend judgement: Empathy needs to be shown during conflict situations. Respecting the other person’s point of view even if you do not agree entirely will be the first step to resolving the conflict. 
  • Get them to agree and say yes: Having the person agree with you on general factual points leads the conversation towards a more favourable outcome. If you can show that you have understood their point of view by making clarifying statements you generate a state where the other person must reply with an affirmative response. The sooner you can get the person to say yes then sooner the conflict will de-escalate. It always works.
  • Avoid clichés: The worst of these being “Calm Down”. Did you ever notice how people who tell you to calm down are the ones who got you mad in the first place? Saying those words during a verbal conflict usually gets the classic retort “I AM CALM” very loudly usually with an animated hand gestures as well.       
  • Show empathy: You need to show compassion and understanding and give the conflict your full attention. Do not make impulsive decisions. Take the time to work through the problem.
  • Consistency in Courtesy: The person you are dealing with first thing in the morning deserves the same level of respect, civility and patience as the individual you are dealing with at 2 in the afternoon. They warrant the same high level of service and professionalism as the first person you spoke to. You need to maintain that position of positive brand ambassador and an excellent professional service.

There are many physical aspects of being mindful of in conflict situations. It is important always to be aware of features of conflict such as your body language, your emotions, your judgement, and your initial thoughts. Keeping these in mind is essential when trying to de-escalate a problematic situation.

Monika B. Jensen is the principal of the Aviary Group, consulting company that address workplace discord.  For more information, visit www.aviarygroup.ca

 

 

 

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Private Security Trends and the Need for more Trained Private Security Resources

The Canadian Occupation Projection System (COPS) predicts that by 2018, there will be a significant shortage of Private Investigation and Private Security professionals for the projected number of job openings in Canada.

 

This is due to a large number of impending retirements and the increasing demand for trained professionals in the Private Investigation and Security field. The current security climate in Canada, the privatization of public security functions and the gaps in accessible knowledge and streamlined training in the private security field, including the gaps between private and public security, are all indications that there is an imminent and urgent need to provide professional and comprehensive private investigative and security services to Canadians. This not only increases individual safety and security within municipalities but also ensure the Canada as a whole maintains its credibility and reputation as one of the safest Countries in the World.

 

In 2002, the Law Reform Commission of Canada opened a dialogue on the trend in the growth of private security in Canada. A continued rise in law enforcement expenditures, combined with economic downturns, have contributed to pressure being placed on police services around the world to become more effective and efficient. This has resulted in a growing trend of privatizing some functions traditionally performed by public policing to the private security industry as well as the growing cooperative efforts between public and private security. Private security plays an increasingly important role in community safety and addressing issues of crime and social disorder.

 

It is often assumed that privatizing and outsourcing traditional law enforcement tasks will result in reductions in the numbers of sworn police officers. This is very far from the truth, on the contrary, public and private security collaboration may in fact result in innovative initiatives that previously did not exist, and with the growing need for security actions in communities, may in fact provide law enforcement with extra resources and partners to undertake more actions without being overworked and understaffed while utilizing various community expertise.

 

There is a growing need for more security trained private resources and more collaboration between all security facets in Canada.  In Ontario, Private Investigators as well as Security Guards are licenced and regulated by the Ministry Of Correctional Services and Community Safety.

 

Anyone that acts in these rolls must have a licence. To obtain a licence, you must meet some requirements, one of them is completion of a Ministry-approved course provided by a registered provider such as Focus Investigations. A minimum 50 hour course for Private Investigator and a 40 hour course for Security Guards is mandatory.

 

These courses can be completed online making it easy for students to complete at the curriculum at their own pace. The process is as follows:

 

1. Complete Ministry training course and receive a “Completion Number”

 

2. Book a written exam at a SERCO Canada location that provides these tests. 

 

3. Upon successful completion of the exam, a candidate may now apply to the Ministry for their license. 

* For Security Guards, Emergency level first aid training is also required.

 

More information can be found on the licensing and industry here:

https://www.mcscs.jus.gov.on.ca/english/PSIS/FAQs/FAQs-Licences/PSIS_faqs_licences.html

 

Additional training that is useful for security professionals as well as anyone working in a security related field such as:

 

Notetaking:

 

Knowing how to take notes is important for the following reasons:

 

  • Notes are referenced for several reasons and potentially by several people.
  • Supervisors might want a rundown of the events you encountered the night before, clients may want to know about incidents that affected their businesses, and law enforcement may need these notes to help with an investigation which could conclude in a court case in which the notes will be used to prove or disprove an allegation.
  • It is vital that security personnel know how to take proper notes so that the facts are covered and there is no confusion that renders the reports useless.

 

Crisis Intervention

 

A crisis occurs when someone loses control over their behaviour. These moments are often preceded by warning signs that tells you someone’s behaviour is starting to escalate.  Security officials and any employee having to interact with the public may be faced with a situation where they are called upon to defuse a situation. By following the tips in a crisis intervention course, they often prevent a situation from becoming critical and dangerous and they are prepared and confident in any crisis they may face.

 

 For more information or to enrol in one of these courses, visit us at http://www.focusinvestigation.net

 

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The Power and the Peril of the Privilege Clause

The Power and the Peril of the Privilege Clause

by Lindsay Parcells LLM, LLB, MBA

As procurement professionals know, Canadian courts have established a clear duty on the part of owners and respondents to respect the terms of ‘Contract A,’ which includes a duty by owners to reject non-compliant bids and proposals. This included duty is based on the notion that it would make little sense for bidders and proponents to expose themselves to the risks associated with the competitive process if the owner was allowed to then ignore that process and accept a non-compliant response. Failing to reject a non-compliant response and subsequently awarding ‘Contract B’ to a non-compliant respondent may result in a claim for damages by an unsuccessful respondent who submitted a compliant bid or proposal. If that claim is successful, damages will be awarded both for the unsuccessful respondent’s lost profit and, usually, for at least a portion of their legal costs. Owners that fail to reject non-compliant bids and proposals may therefore end up paying twice for the same goods or services that were procured – once to the company they awarded it to, and once to compensate the company they should have awarded it to, had they followed their own rules.

To protect against liability, owners will often include privilege clauses in their procurement documents. A privilege clause is a provision in the RFX that gives the owner a specific right or ‘privilege’ in the procurement process, typically the right to accept or reject any response in its discretion or the right to waive defects. Privilege clauses may also give the owner the right to negotiate with respondents, to communicate for clarification purposes, or to rectify ‘minor deficiencies.’ As litigation escalates and challenges become more frequent, we see a corresponding increase in the number and variety of privilege clauses owners choose to insert.

Privilege clauses are useful tools that give owners flexibility and discretion in the procurement process, and they can be particularly beneficial for owners in more complex procurements where there are uncertainties that may be difficult to predict. For example, in a procurement where an owner is seeking proposals for a project that requires complex technology, it may be beneficial to retain the flexibility to allow for further discussions with proponents after initial proposals are reviewed, leading perhaps to a final BAFO stage based on revised specifications.

Generally speaking, the more complexities and uncertainties in the procurement, the more likely it is that privilege clauses need to be included. Owners should, however, remember the benefits of moderation in using privilege clauses. Notwithstanding the advantages of the flexibility provided by privilege clauses, owners should also remember that, in general, there is a direct correlation between the prices received and the number of privilege clauses, as respondents factor in the uncertainties created by privilege clauses and include a ‘risk premium’ in their pricing. Worse still, they may even decline to participate if the opportunity is too uncertain.

Owners should therefore include only those privileges necessary for dealing with the specific uncertainties and complexities of the procurement under consideration, remaining mindful of the impact this may have on the competitive tension. An owner should decide whether a privilege clause is “nice” or “necessary” to have, and include only the latter.

Privilege clauses, in common with all other aspects of issuing and administering procurement processes, should be exercised fairly and in good faith. Remember that discretion is a double-edged sword: it leaves room for flexibility, but owners should expect to be challenged on why they did or did not exercise the discretion in any given case.

Joining NECI’s Instructor Team in 2016, Lindsay Parcells practices local government law with Lidstone & Company, Barristers & Solicitors, a firm specializing in local government law with offices in Calgary and Vancouver. Lindsay has been practicing law since 1991 in Alberta and British Columbia. He completed a Masters’ degree in Municipal Law from Osgoode Hall Law School in 2009 and a combined Bachelors of Laws and Masters of Business Administration degree from Dalhousie University in 1991. In addition to his practice in procurement law, Lindsay also advises clients in municipal law, land use, real property and corporate and commercial matters. Lindsay is a past Chair of the Municipal Law Section of the BC Branch of the Canadian Bar Association and currently serves as vice-chair of the National Municipal Law Section of the Canadian Bar Association. He can be reached at parcells@lidstone.ca.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.

National Education Consulting Inc.

Phone: (250) 370-0041     Toll Free: (888) 990-7267

inquiries@neci-legaledge.com

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“Smart Contracts”: Magic, Myth or Misnormer?

“Smart Contracts”: Magic, Myth or Misnormer?

by Paul Humbert

The potential to use blockchain technology to create so-called “smart contracts” for a variety of commercial transactions has been much in the news lately. Some see the objective as using the self-executing code of a blockchain to automatically create and implement a transaction, thereby increasing efficiency by avoiding the time, effort, expense, and burdens of negotiating and implementing “paper” contracts.

I am no expert on blockchain technology. My understanding is that a blockchain is essentially a database that keeps records in “blocks”. Each block is timestamped and linked to a previous block and once recorded are designed to be secure. They act as a shared distributed digital ledger (on either a private or public peer-to-peer network) that can record and update transactions chronologically and publicly. It could also be used to trigger transactions automatically, i.e., if some event occurs, then some action is triggered.

Blockchain is the technology underlying cryptocurrencies such as Bitcoin and one of its major attributes is the security of the transaction. As expected, this nascent technology has attracted a lot of attention in many industries seeking to apply blockchain in a variety of contexts including as a means to save time, reduce costs, increase security, and track the ownership of assets.

There is huge potential for the application of this technology including in the fields of finance, manufacturing, and supply chain management. For example, blockchain technology could ensure a chain of custody to guarantee that goods being sold are not counterfeit or that produce is in fact organic. There is also the potential to have machines interact in what might seem like a very contractual manner, e.g., machinery could authorize and pay for its own maintenance, repair or recharging as the need arose. It’s all very new and, like any new application of a developing technology, challenges and uncertainties remain.

Against this background, the term “smart contract” has entered the picture. As Confucius so wisely stated, “The beginning of wisdom is to call things by their proper name.” The term “smart contract” doesn’t help and is the beginning of confusion, not wisdom.

The problem with the term “smart contract” in the context of blockchain technology starts with the word “smart”. To me, being “smart” means applying learning and experience to make good business or personal decisions or choices. For example, I like to think that my students get smart (or at least smarter) about how to structure and manage commercial transactions as a result of taking my course on contract management.

Using blockchain technology to create “smart” contracts, would require a very substantial exercise in putting into code all the nuances of language and the law, including statutes, treaties, conventions and court decisions. There is an old saying among attorneys that “No matter how flat you make the pancake, there are always two sides.” Some people see this as unavoidable ambiguity due to the nature of language. I see it as necessary flexibility given the complex ways in which people need to interact and communicate. And if an ambiguity does present itself or if some scenario occurs that was not anticipated by the parties to a contract, the general intent and objective of the contract can be ascertained by the parties through negotiation (or if need be by the courts or some other dispute resolution mechanism) by applying legal principles and precedent in the context of what is reasonable under the facts and circumstances. Will taking language and the law and translating it into computer code make it easier to address complex issues? Aside from the challenge of doing so, there is the very real risk that “bugs” in the code could yield unintended consequences. I think most would agree that bugs in such a complex coding effort would be inevitable. “Garbage in garbage out” as the saying goes. And what about a scenario where certain information is not provided in the blockchain, i.e. an error of omission? How would code address that?

I have yet to discover a “smart” machine despite the efforts of skilled programmers and code writers. Moreover, despite being called “smart” most machines (e.g. smart TVs, smart cars, smart phones, etc…) are not really “smart” at all. You may be born with a certain level of innate measurable “intelligence”, but you get “smart” as a result of learning, making mistakes, and then adapting your experience to future behavior. Most machines or appliances labeled as “smart” are simply connected to the internet. To me that does not make them smart. Will blockchain technology breathe the ability to think into the code that will create “smart” contracts?

Despite warnings from Bill Gates, Stephen Hawking, and Elon Musk on the dangers of artificial intelligence (“summoning the demon”), we can sleep peacefully secure in the knowledge that for the time at least machines are safely dumb. Perhaps a few machines (smart bombs?) are capable of making adjustments that resemble human decisions, but we are a long way from autonomous machines or technology taking over the world.

Putting the word “contract” after the word “smart” doesn’t help. The definition of a “contract” is deceptively simple, namely: “An agreement between two or more parties creating obligations that are enforceable by law.” Black’s Law Dictionary. This small group of words is simultaneously clear yet complex; obvious but nuanced. In fact, it is simply not possible to completely define the term “contract” in a sentence or two. Any short definition requires further explanation of the underlying principles and facts under which a contract can be created, changed or ended.

So, what is really meant by the term “smart contract”? There is room for both confusion and competing definitions. It would appear that many people use the term “smart contract” to mean essentially blockchain technology that uses code to create and administer a legally enforceable agreement. By the press of a button, could we eliminate the time, treasure and headache of the hard work of negotiating contracts, not to mention putting all those boilerplate scriveners out of work? Seems unlikely. Could some savant make the “smart” contract so “flat” that controversies would never occur? Even if the code operated precisely as intended, yet a party was disappointed, could you envision a scenario whereby the disappointed party would claim not only error, but fraudulent inducement, unjust enrichment, superior undisclosed knowledge, bad faith, violation of public policy, promissory or equitable estoppel and run to the nearest friendly jurisdiction?

The law makes it easy to enter into agreements as long as the elements of offer, acceptance, consideration, indicating a meeting of the minds for some lawful purpose are met. However, there is a huge variety and different types of contracts. In addition, the importance of individual facts and circumstances pertaining to a particular transaction as well as how the parties choose to allocate risks and responsibilities cannot be overstated. That’s not to say that certain simple circumstances could not be coded to be “self-executing”. Certainly, payment could be programmed by code to occur immediately upon delivery and acceptance (after due inspection of course) of goods or services. But, rather than try to translate into code an endless variety of contractual transactions with so many permutations and combinations of outcomes, why not simply combine some simple “black and white” code-driven scenarios (like payment for conforming goods or services) with traditional legal language reflecting the rights, risks, and responsibilities according to each party’s capabilities and risk tolerance.

Moreover, a contract consists of many respective rights and responsibilities as well as the assumption of certain risks. How the parties choose to allocate those risks via the sometimes very complex contractual language used in indemnification clauses, insurance provisions, restrictions on the use of information, limitations of liability or other such language allocating risks and responsibilities between the parties varies. These and other factors may be a limitation to the application of so-called “smart contracts”.

That’s not to say that blockchain technology has no role in facilitating transactions. It can be a real game changer for many industries, including supply chain management. Tracking and recording the quantity, quality, certifications and transfer of goods as well as sharing information about products, together with the greater transparency, scalability and security are among the benefits of using blockchain technology. However, let’s avoid blockchain fever and not let the magic of blockchain trespass into fever and myth.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.

Paul Humbert is president of The Humbert Group, llc and provides consulting services on process improvement and transactional matters. He has co-authored several books for use in contract development and implementation, project management, and process improvement. They include: Playbook for Managing Supply Chain Transactions with Desktop Tools, References and Sample Forms; Contract and Risk Management for Supply Chain Management Professionals; and Model Contract Terms and Conditions with Annotations and Case Summaries. This article originally appeared on the European Financial Review site on December 28, 2015. It has been edited for style and is reprinted by permission of the author.

National Education Consulting Inc.

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What’s a GPO and Why Should You Care?

What’s a GPO and Why Should You Care?

by Lise Patry BA | Sc | LLB | ICD.D | NECI Instructor| Patry Law

A group purchasing organization, or ‘GPO’, is an entity whose fundamental purpose is to allow its members to combine their purchasing power to benefit from volume pricing for goods and services. In addition to reduced prices, buying through a GPO can shorten the procurement cycle, save staff time and help entities avoid the risks associated with a public procurement process.

In Canada, GPOs have become significant players in the health care and education sectors. Beyond these sectors however there appears to be scarce take-up for GPOs and one has to ask why?  

Perhaps it’s because of the historical lack of clarity around whether public procurement rules allow public sector entities to use GPOs. The Agreement on Internal Trade (AIT) only addresses GPOs (which it refers to as “buying groups”) in a cursory fashion in the annexes applicable to Crown corporations and MASH sector entities. Beyond the AIT, it’s rare to find references to GPOs in government procurement frameworks, which creates uncertainty as to their legality or acceptability.

The Canada Free Trade Agreement (CFTA) clarifies the rules around using GPOs, making it easier for public sector entities to add GPOs to their menu of sourcing options. The buying group provisions in the CFTA apply to all covered entities; governments, Crown corporations and MASH sector. When purchasing through buying groups, like the AIT, the CFTA requires that covered entities ensure the procurement process is carried out in accordance with the CFTA but the CFTA introduces an exception to this rule where the entity has little or no control over process. Covered entities using GPOs are required to publish a notice of their participation with a GPO at least annually on their tendering website.

With the CFTA explicitly recognizing the acceptability of using buying groups, procurement officers would be remiss not to explore adding GPOs to their menu of sourcing options. Before doing so, however, it’s important to check with legal counsel to ensure the organization’s procurement framework allows the use of GPOs. If the policy framework allows it, before moving ahead it’s equally important to analyze the pros and cons of using a GPO as there is no ‘one size fits all’ for sourcing options in procurement; GPOs may generate significant benefits for some organizations but not for others.  

Watch for future articles on this topic, including the next in this series that examines the pros and cons of using GPs in procurement.

Lise Patry, an instructor with NECI, is a lawyer and former business executive with a strong background in technology and more than 20 years of business and legal experience in the public and private sectors. As principal of Patry Law, in addition to general law, she offers virtual counsel services and specialized expertise in contracts, licensing, government procurement and corporate governance. She can be reached in Ottawa at 613-833-7488 or lise@patrylaw.ca.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.

National Education Consulting Inc.

Phone: (250) 370-0041     Toll Free: (888) 990-7267

inquiries@neci-legaledge.com

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Clearing Obstacles to Successful Projects: The Importance of Disclosure in Creating Tender Documents

North Pacific Roadbuilders Ltd. v Aecom Canada Ltd, 2013 SKQB 148

The duty to provide accurate information to contractors is of paramount importance, as the verdict in this case from Saskatchewan’s Court of Queen’s Bench demonstrates. Failing to do so, whether deliberately or negligently, can cost defendants thousands of dollars and delay important projects. In this case, the plaintiff successfully argued that the defendant failed to provide accurate information, and that relying on the information provided was entirely reasonable for them to have done.

The plaintiff, North Pacific Roadbuilders Ltd. (“North Pacific”), is a company incorporated in British Columbia and owned by Ronald Burek, who had also incorporated a company called Prairie Roadbuilders Ltd. (“Prairie”) in Alberta. North Pacific, which had been created in order to allow Mr. Burek to bid on projects outside of Alberta, relied on Prairie to supply it with roadbuilding machines. North Pacific had done considerable work in British Columbia, but prior to the events detailed in this case had not worked in Saskatchewan. For its first project in the province, North Pacific successfully bid on a road construction tender issued by Cameco Corporation. The bid had been submitted jointly with Tron Power, a northern Saskatchewan contractor, since Cameco had a policy requiring a certain number of northern personnel on any of its contracts and since Tron Power did not have sufficient machinery to perform the contract themselves. Further, roadbuilding was not Tron Power’s area of expertise.

The road North Pacific was supposed to construct was a 57-kilometre ore haul road between Cameco Corporation’s mine and mill at Key Lake and a new mine at McArthur River. The specifications and technical information in the tender documents were prepared by UMA Engineering Ltd. (“UMA”), which was later acquired by the engineering firm AECOM Canada Ltd. Once UMA had become involved in the project, Cameco gave it three reports on the area’s terrain; the reports had been prepared by a firm of engineers (J.D. Mollard and Associates Limited; “Mollard”) specializing in air photogrammetry – that is, making measurements of terrains based on photographs taken from above. The route UMA eventually chose for the road was an approximate of the one the engineering firm had originally chosen.

North Pacific alleged that UMA misrepresented – deliberately and/or negligently – the conditions of the terrain on which the road was supposed to be built, and that these misrepresentations caused them to lose over six thousand dollars. The defendant, UMA, denied that they misrepresented anything, and further denied both that the plaintiff had relied on the soil information in those documents and that the terrain conditions had caused North Pacific’s losses. UMA also alleged, in the alternative, that the plaintiff was contributorily negligent.

In order to determine if the tender documents issued by UMA had accurately represented the terrain, the judge examined the documents alongside the reports from Mollard. The judge also examined the reports UMA had made for Cameco in order for Cameco to get regulatory approval for the project, prior to issuing a request for bids. The judge found, among other facts, that:
• UMA’s reports to Cameco included mentions of boulders in the soil and other soil conditions that were not included in the tender documents;
• UMA’s reports to Cameco also included different terrain mapping information that was not made known to bidders;
• The tender documents did not make it known to the bidders that Mollard’s reports were available for inspection, as Mollard had strongly recommended;
• UMA prepared all of the drawings and technical specifications included in the tender documents;
• UMA had included descriptions of sample soil that stated they contained only sand, despite the sample testholes having actually also contained a certain percentage of rock;
• UMA did not include a description of the Standard Test Procedure it used for testing soil in the tender documents;
• UMA did not note that samples contained cobbles or boulders when they did;

For these and other reasons – including a short visit to the site by Mr. Burek, where he was told that the conditions he saw then would continue throughout the road-construction site – the equipment brought to the site by North Pacific was based on an expectation of primarily sandy soil. Because of delays due to equipment being damaged by boulders, and later needing to demobilize equipment for the winter and then remobilize, Cameco did not accept the road as complete until August 20, 1998; Cameco had intended to use the road as a winter road in December 1997.

A week before the road was accepted as complete, Mr. Burek spoke to a Cameco representative by telephone and let him know that the extra rock North Pacific had encountered – a quantity of which had not been included in the tender documents – had caused delays and damage in the amount of approximately $2 million in additional costs. Mr. Burek was advised to make a written claim to UMA. He did so in a letter dated November 10, 1998; UMA responded and denied the claim.

In order to assess the reasonableness of the claim, along with whether North Pacific had reasonably relied on the information given by UMA in the tender documents, the judge considered testimony from Mr. Burek, from an employee of Prairie (Mr. Burek’s Albertan company), George Mollard (of the engineering firm Mollard), an expert engineer with experience in northern Saskatchewan in both the public and private sectors, UMA’s engineer in charge of the project, UMA’s supervising engineer on the haul road, a junior design engineer employed by UMA, a heavy equipment operator familiar with the region who had been employed by North Pacific for part of the project, a Cameco engineer with expertise in soil mechanics, an engineer employed by neither party but with expertise in preparing bids, and an engineer with expertise in tendering contracts who had worked for the province for many years. Thus the judge examined a considerable amount of evidence in determining the claim.

In order to assess if UMA had negligently misrepresented information to North Pacific, the judge first examined previous case law to determine that UMA did owe a duty of care to bidders to provide accurate information that was not misleading in any way. The judge further determined, based on assessing technical and testimonial evidence, that some – but not all – of the information UMA had provided in the tender documents was in fact misleading, either expressly or by omission. The judge also found that many of Mr. Burek’s assumptions regarding the soil were unreasonable, which is why not all of the information UMA provided was found to be misleading: that is, it would only have been misleading had Mr. Burek’s assumptions based on them been entirely reasonable.

Three further points were made out, thus leading the judge to hold that the misrepresentation was negligent. First, the judge held that, based on evidence, UMA had fallen below the standard of care it owed bidders by failing to disclose the Mollard terrain mapping. Second, the judge found that it was reasonable for the plaintiff to have relied on the information UMA provided that did not disclose an increase in rock further north along the planned route and made no mention of extensive boulders. Third, the judge accepted the evidence that North Pacific incurred costs over and above what it anticipated because of relying on the information. Thus the plaintiff was found to be entitled to damages. While the plaintiff did also allege deliberate misrepresentation, or deceit, the judge did not find this based on evidence.

UMA had claimed that should they be found negligent, the plaintiff should be found to have contributed to that negligence by failing to make its own inquiries into additional geological information. The judge held that North Pacific was not so negligent, in part because none of the bidders had made these types of inquiries, indicating that all assumed they had been supplied with all available terrain information.

North Pacific claimed nearly $5 million in damages. In assessing the plaintiff’s and defendant’s arguments regarding damages, the judge was unable to determine what a correct bid would have been, due to insufficient evidence. However, the judge did note that Mr. Burek had twice – first verbally, to Cameco, and second in writing, to UMA – stated his damages to be $2 million. Thus the judge awarded North Pacific $2 million.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.

National Education Consulting Inc.
Phone: (250) 370-0041 Toll Free: (888) 990-7267
inquiries@neci-legaledge.com

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Is it a good idea to add a “this RFx is non-binding” clause in our RFx template?

Is it a good idea to add a “this RFx is non-binding” clause in our RFx template?

by Lise Patry, ba sc (chem eng), llb, icd.d, Patry Law

Owners seeking shelter from the legal risks associated with Contract A are increasingly including a clause reading: “this RFx is non-binding and therefore does not create Contract A” into documents that otherwise have the elements of a binding RFx.

Is this a good idea? It certainly seems to be. At common law, no freestanding duty of fairness is owed to bidders in a non-binding RFx process. Seems like a no brainer – if you want to avoid Contract A, just make the RFx non-binding!

How to design a non-binding RFx

Although this strategy makes sense in many cases, keep in mind that whether an RFx is binding or non-binding is matter of substance and not form. Courts will look at a variety of factors to determine whether the parties intended to enter into a binding contract – Contract A – by the submission of a proposal. A statement that “no Contract A is created,” while important, is just one of the many factors courts examine.

The most comprehensive summary of factors courts consider when determining whether the parties intended the process to be binding is from the trial level decision Tercon Contractors v. BC 2006 BCSC 499, and presented as the following list in Topsail Shipping Company Limited v. Marine Atlantic 2013 NLTD 163 (upheld on appeal):

  1. The irrevocability of bids or proposals submitted; 
  2. The formality of the process; 
  3. Whether bids or proposals are solicited from selected parties; 
  4. Whether the identity of bidders or proponents is confidential;
  5. Whether there is a deadline for the submission of bids or proposals; 
  6. Whether a security deposit is required; 
  7. Whether bid or proposal selection or evaluation criteria are specified; 
  8. Whether there is a right to reject proposals; 
  9. Whether there was a statement that this was not a tender call; 
  10. Whether the work or service for which proposals are submitted will definitely proceed; 
  11. Whether compliance with specifications was a condition of bids or proposals; 
  12. Whether there is a duty to award contract ‘B’; 
  13. Whether contract ‘B’ had specific conditions not open to negotiation. 

Generally, the more formality there is in the process, the more it points to an intention to conduct a binding RFx. As we saw in the case of Topsail, even if many of the above criteria point to a non-binding process, courts will often strain to conclude a process was legally binding in order to hold an owner accountable for unfair conduct. Therefore, to successfully avoid Contract A, owners are advised to design a process that is clearly non-binding having regard to all of the above factors.  

Can a “this RFx is Non-Binding” statement, on its own, effectively negate Contract A?

When determining whether an RFx is binding, courts will strive to respect the parties’ intention and will look at the express and implied terms of the RFx in the context of the above list of factors. The insertion of a “this is a non-binding RFx and no Contract A is created” clause, as highlighted above, will help support an argument that the RFx was intended to be non-binding, but is not in itself determinative. As we have seen with privilege and disclaimer clauses, even in the face of clear RFx provisions protecting the owner, courts may refuse to enforce the clauses when to do so would compromise the integrity of the tendering process. Since a non-binding RFx provision is really just another type of disclaimer clause, judges will likely subject them to the same judicial scrutiny and uncertainty, particularly if it’s the only factor pointing to a non-binding process.

Owners seeking to protect themselves by using a ‘non-binding RFx’ clause in an otherwise binding RFx should therefore not derive too much comfort from the protection it can offer as courts may, under certain circumstances, refuse to enforce it.

A good idea but not a perfect solution

Given the above, is it a good idea to include a “this RFx is non-binding” in your standard RFx document to avoid Contract A duties? In our view, yes. Like liability disclaimers and privilege clauses, these provisions could provide strategic leverage in negotiations with disgruntled bidders and may be legally enforceable under certain circumstances. In deciding to use these clauses, however, owners should be aware that, while they may be a good idea, if put to the test in court they may not act as a perfect solution to the Contract A problem.

Rather than simply inserting a ‘non-binding’ clause in your standard RFx template, a more effective approach is to work with your legal and other advisors to create a template that is specifically and thoroughly designed to be non-binding with regard to all of the above factors. You can then decide when and how that instrument is to be used, keeping in mind that in some cases Contract A might be the most efficient way to proceed.

Lise Patry, an instructor with NECI, is a lawyer and former business executive with a strong background in technology and more than 20 years of business and legal experience in the public and private sectors. As principal of Patry Law, in addition to general law, she offers virtual counsel services and specialized expertise in contracts, licensing, government procurement and corporate governance. She can be reached in Ottawa at (613) 730-5959 or lise@patrylaw.ca.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.

National Education Consulting Inc.

Phone: (250) 370-0041     Toll Free: (888) 990-7267

inquiries@neci-legaledge.com

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Canada Free Trade Agreement Implications

FREQUENTLY ASKED QUESTIONS

CFTA Implications

by Lise Patry, B.A.Sc., LLB, ICD.D

Will the Canadian Free Trade Agreement that came into effect July 1 impact my ability to engage with GPOs?

Thanks for this interesting question. It will come as good news to many that in fact the CFTA provisions clarify rules around the use of buying groups

Under the AIT, we only see a reference to buying groups in the Annexes applicable to Crown corporations and MASH sector entities. Covered entities wishing to purchase through buying groups must ensure the activities of the buying groups are carried out in a “manner consistent with this Annex”.

In the CFTA, the buying group provisions apply to all covered entities and additional rules have been added. Covered entities purchasing through buying groups:

  • no longer have to ensure the procurement is consistent with the CFTA if they have little or no control over the procurement process; and
  • must publish a notice of participation with the buying group at least annually on their tendering website. The notice must direct potential suppliers to the buying group tender notices website if it is different than the tendering website used by the covered entity.

Lise Patry, an instructor with NECI, is a lawyer and former business executive with a strong background in technology and more than 20 years of business and legal experience in the public and private sectors. As principal of Patry Law, in addition to general law, she offers virtual counsel services and specialized expertise in contracts, licensing, government procurement and corporate governance. She can be reached in Ottawa at (613) 730-5959 or lise@patrylaw.ca. This article originally appeared as a series of blog posts in September 2016 at patrylaw.ca. It has been adapted and is used by permission.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.

National Education Consulting Inc.

Phone: (250) 370-0041     Toll Free: (888) 990-7267

inquiries@neci-legaledge.com

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BC AGLG Flags Management of Vendor Performance

The Auditor General for Local Government in BC has published a series of booklets designed to help improve government performance and complement its performance audit reports.   Although specifically targeted to local government in BC, these booklets provide a wealth of information, templates and suggestions that can help guide any Canadian public sector organization.

In a January 2016 publication the AGLG highlights vendor performance management as one of three topics to improve achieving value for money in operational procurement. It discusses key elements of a vendor performance management framework, best practices in managing vendor performance and includes a number of templates that can be adapted for use by any organization. The full document can be accessed at https://www.aglg.ca/app/uploads/sites/26/2017/04/Perspectives-T1-T1-PDF.pdf.

This important report complements PSPP 203 – Managing and Evaluating Contract Performance – and augments many of the examples and templates we cover in that course. As an organization that works with public sector right across the country, we see repeated examples of major procurement and contract mishaps related to incomplete or inadequate vendor performance evaluation. Users and business clients become frustrated when the procurement department ‘continues to engage the poor performers’. Yet the procurement department is not provided with enough (or any) information about performance issues to solve this problem. Outstanding vendors see the less than stellar performers continue to be awarded contracts, so they are de-motivated to keep up their own performance standards. All contract performance then slips to the lowest common denominator, further frustrating the users and eroding value for money from government spending. And as we know, terminating a contractor without adequate performance documentation can lead to expensive and protracted lawsuits, unwanted publicity and consumption of valuable resources that could best be directed elsewhere.

If any of this is starting to sound familiar, you or your staff may want to join us online, starting June 26, for a cross-country cohort in <PSPP 203>. (link to 203 reg for june 26 session)   Spanning four weeks, this course takes approximately 3 hours of time per week, and delves into many detailed examples, illustrations and best practices related to this important aspect of the procurement and contract management cycle. The analogy that we often use is that if the RFX process is the ‘wedding’, then the contract management process is the ‘marriage’ – that’s where the hard work really takes place! Determining how performance will be measured and managed must be thought about in the planning stage, carefully described in the RFX and resulting contract, and then implemented as contract performance unfolds.

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