How to Find the Budget for a Municipal Project

Have you ever received an RFP that doesn’t have any budget listed?  It makes it hard to truly understand the scope of the work requested, doesn’t it?

Municipalities have their hearts in the right place, but often they throw more “wants” into an RFP than they have the budget for. When the bids come in way over their budget, they have to start the whole RFP process all over again – wasting everyone’s time.  

Worst yet, those who bid the first time may not bother to submit a bid the second time around and the municipality may receive fewer bids and ultimately higher pricing.

In defense of municipalities, however, I’ve been on both sides of the argument on whether or not to include the budget for a project in an RFP.

As a CAO, I didn’t want to put the budget number in the RFP either, because I was afraid bidders would simply submit bids right up to the budget number. This is still a common misconception.

But now, experience has taught me, when bidders know the budget number, the reality is they more often submit bids lower than the budget, to try to win the work.

From the Bidders’ perspective though, it’s incredibly frustrating not knowing the budget number because you can’t accurately price the work without understanding the municipality’s expectations.

So, to connect the dots, here’s a tip for Bidders to find the budget for a municipal project.


In most cases you can, through good sleuthing, find the budget a municipality has set aside for a specific project.

  • Provincial Announcements

Often when Provinces announce funding for municipalities, they will have a press release and a link to find out which municipality received what amount for specific project(s). That’s the easiest way to find the budget for a project.  

  • Agendas & Minutes

If the municipality received funding for the project, Council will most likely have recently passed a resolution to approve the project.  By searching the municipality’s Agendas/ Minutes section of their website, you can usually find the resolution about a month or so before the RFP was issued.

Personally, I start by looking at the Agendas and searching keywords, related to whatever the RFP has been issued for.  (i.e. Service Delivery Review, Parks & Rec Roof Repairs, etc.).  The Agenda will help you narrow down the minutes that contain the resolution Council passed – and the resolution will normally have the dollar amount approved for the project.  

  • Budget

If the municipality did not receive funding for the project, you may not find a resolution approving it. So, another way you can sometimes find the budget for a project is by finding the municipality’s annual budget on their website.  

This is a bit harder to do if you’re not familiar with how a municipal budget looks, but look at the proposed expenditures for the current year, in the appropriate department and you may see the project noted separately in the annual budget. 

For example, you would most likely find the budget for “Service Delivery Review” in the General Administration part of the budget, or “Roof Repairs” in the Parks & Recreation part of the budget, etc.  

You can also check out the Special Budget Meetings of Council (again in the Agendas/Minutes section of the municipality’s website), and you may see mention of the project and how much Council wants to budget for it. 

It takes time, and it’s not always easy, but in most cases, it is possible to find the budget the municipality has set aside for a project. 

Happy Sleuthing Sherlock! 

Got questions?

Contact Susan Shannon, Founder & Principal,

855.477.5095 or [email protected]



The Critical Importance of Performance-Based Contracting


Maureen Sullivan, LLB, CTP

NECI President,

Legal Editor & Publisher

Facing today’s economic and political pressures to demonstrate how they are doing more with less, procurement professionals can find themselves pushed into giving short shrift to procurement planning. In a rush to get the RFx out the door and move on to the next drafting process, it can be tempting to give only cursory attention to the performance contract itself, and to lose sight of the main reason you are going to the market in the first place – to drive competitive tension and demonstrate transparency.       

As we continually remind our learners, you will never have more leverage than you do before the competitive process starts, so take advantage of that by including clear, measurable performance requirements in the draft contract that is typically attached to or included with the procurement document. Not only will this help respondents provide their most accurate and competitive pricing – because they know exactly what is expected of them, and how it will be measured – but it will also be immensely helpful for keeping the contract deliverables on track and demonstrating that you have achieved value for money.             

Most procurement professionals have had to deal with user dissatisfaction, delayed or deficient performance and reporting, and cost overruns (with the attendant political fallout). Only when stepping in to try and remedy such deficiencies does it become clear that the governing contract has no measurable, clearly defined performance expectations. A client recently advised that, when she stepped in to resolve a tense dispute over the performance of a landscaping contractor, the only reference in the contract to performance that she could find was a statement that “the lawns must look magnificent.” No wonder there was a dispute!             

As procurement professionals should know, vague assurances about “high-quality goods” and “professional service delivery” don’t carry any weight in actually resolving a contract dispute. In fact, such statements work against the buying organization, under the principle of contra proferentum, in that ambiguity in a contract will be interpreted against the party that drafted it.              

If you take the time to develop very precise, clearly defined performance standards and other contract requirements, you will avoid ambiguity that can lead to misunderstanding. Just as importantly, your contract managers will have the tools they need to work through the inevitable hiccups in performance, and, ultimately, to demonstrate that the organization realized its operational goals through the procurement and the resulting contract.             

Clearly defined service levels or other key performance indicators can also be used as a powerful motivator for the contractor, by linking their measurement (good or bad) directly to the contractor’s ability to obtain more work – both for this contract and for future opportunities with your organization. Attaining specified performance levels can be tied, for example, to automatic extension or renewal rights, or adjusted volumes for the contractor, and can even feed into its ability to remain on your Standing Offer Agreements (SOAs), Master Services Agreements (MSAs) or other prequalified contractor list.             

We have all heard the adage that “what gets measured gets managed.” We encourage you to take that to heart when drafting your next RFx and resulting contract, by spending adequate time setting up very clear, specific, and measurable performance expectations. The time, energy and credibility that this can save – both from deterring unqualified or incapable respondents, and in giving contract managers the tools they need to enforce the contract – will truly pay off tenfold for your organization.

National Education Consulting Inc.

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

[email protected]






Procurement Policy Best Practices: Benchmarking for Improvement

Larry Berglund, SCMP, MBA, FSCMA

Author | Good Planets are Hard to Buy  Principal | Presentations Plus Training and Consulting Inc.

Admittedly, procurement policies may not sound exciting but they are critical to drive value in any organization. Policies are the means used by the organization to convey their values and aspirations to stakeholders and staff.

Policies need to be revised and should be seen as a “living document.” Necessity to update can be driven by legislation, leadership principles, community values, international agreements, or technical advancements. One of the key responsibilities of senior management is to update policies and ensure practices are aligned. This could refer to ethical values, environment considerations, total cost of ownership, local sourcing, or quality of materials on any number of goods or service which are required.

There are many common factors which can undermine the intended purposes of policies. Whenever a policy does not meet the operational or administrative needs of a department, decisions will be made based on good intentions which may compromise the organization’s interests. Scheduling regular policy reviews and updating bid and / or contract templates mitigates these occurrences.

In most instances where repercussions for unauthorized deviation from policy are not embedded, staff may take liberties with the policy. People like to make decisions which demonstrate their resourcefulness or innovation. For the most part it works – however, allowing decisions to be made outside of policy condones the practice and encourages similar behaviours. Rewarding deviance always invites an element of risk.

Tying procurement performance to measurable outcomes is one of the tools organizations use to assess how effectively policies are meeting stakeholder needs. Matching metrics to the practices which arise from a policy is an important part of organizational strategy. If you can measure it you can manage it. And certainly what gets measured with a bonus gets managed really well!

Ensuring vendor performance assessment is formalized in policy and implemented in practice are keys to ensuring and demonstrating value for money. The absence of a requirement for vendor performance evaluations as a part of contract management is one of the more common deficiencies in many organizational policies. This is especially relevant where spending authority is decentralized. Anecdotal information is inadequate to provide feedback to a vendor; and “no news is good news” is not a basis for good contract management. Vendor performance should be a part of comprehensive procurement policy, be evident in contractual agreements, and be well documented by contract managers.

Quality can be specified and measured against engineering-based or internationally recognized standards. Vendor performance on service contracts is where leading organizations are making advancements. Many companies are using past performance as an indicator of future performance during the proposal evaluation process.

Areas such as social and economic development are gaining traction in strategic policy development. Front line staff who are motivated largely by budget limits, need clear policy language in order for them to make an informed decision as to which product or service meets the organization’s definition of value.

Benchmarking between divisions of an industrial company or between various municipalities or health care operations is often done on financial factors. This is certainly a reasonable step to take and determining what accounts for the differences in the financial variance should follow. Financial differences are often linked to the definition of value adopted by a specific organization. An example could be that Org A pays .05% more on its COGS than Org B due to a policy by the latter of only sourcing conflict-free minerals. Therefore policy clauses which address non-financial criteria do affect the financial outcomes.

Policies which support the FIAT principles (fairness, integrity, accountability, transparency) contribute to vendor reassurance that their responses to competitive bid opportunities will be assessed objectively. Consistently using policy to affect practice leads to competitive tension which is good for all players in any market sector. Conversely, where a policy implies a strong commitment to non-financial values yet evaluations are skewed to favour financial interests, this detracts from credibility of the process and may diminish the level of competitive tension.

Policies represent the values and ultimately the brand built by the organization, and help to ensure that decisions are not made arbitrarily or based upon the personal interests or values of an individual. Policies are not platitudes nor should they be seen as ultimatums. Effective policies provide guidance and good governance across an organization to contribute to its success and to receiving value for money.

Wondering how your organization stacks up with its procurement policy? Join us online October 24 for an interactive eSeminar that explores Procurement Policy Best Practices: Benchmarking for Improvement.

Larry has been in the supply chain management field as an author, manager, business trainer, academia, and consultant for many years. Larry has worked in both the private and public sectors. Recently he has been co-facilitating NECI eSeminars, classroom sessions, and online modules. His new book, Good Planets are Hard to Buy, was released in the fall of 2015.


National Education Consulting Inc.

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


[email protected]



Municipality Unfair in Sale of Property? You Be The Judge.

Test your understanding of fairness in this recent case from Nova Scotia.

In 2012, the Halifax Regional Municipality (HRM) issued an RFP for the purchase and redevelopment of a surplus elementary school property. Jono Developments Ltd. and several community groups submitted proposals. There is evidence that the HRM closely followed the terms of the evaluation process laid out in the RFP, which allocated 20 percent of the weighting to the financial offer. Following evaluations, the HRM approved sale of the property to Jono.

Around the time the sale to Jono was approved, the community groups discovered that the HRM had passed a “Policy and Procedure for Disposal of Surplus Schools” in 2000. Among other steps, the HRM was required under the policy to first assess and evaluate any proposals from community groups or grant applications and, if none were received or none were supported by the Community Grants and Partnering Program under the HRM, then the HRM was to take steps to seek Council approval to put the property on the market.

Compelling evidence was presented that the HRM had not tested the policy since its inception, and in fact was not aware that it even existed until challenged by the community groups following the approval of the sale to Jono. When the HRM became aware of the policy, which clearly had not been followed in this instance (or in any of the previous disposals of 18 other surplus school properties), the HRM rescinded its decision to sell to Jono, made a motion to rescind the policy and, then, passed a third motion to sell the property to Jono.

The HRM was also enabled under its Municipal Charter to “sell property at market value when the property is no longer required.” The appraised value of the property was listed in the RFP as $4.3 million, based on a valuation report that provided three scenarios:

  • Market value of property as is: $1 million
  • Prospective market value – maintain old school/redevelop remainder: $3 million
  • Prospective market value – demolish all buildings and redevelop: $4.3 million

Jono had submitted an unconditional financial offer of $3 million for the property “as is,” to be increased by increments of $75,000 over the highest bid to a maximum of $4 million. In other words, Jono offered to pay $3 million if there were no competing bids, and up to $4 million if there were. Jono also provided a slightly higher option that was conditional on certain development approvals. 2 Several community groups also submitted proposals, each offering a purchase price of less than $3 million. The HRM approved the $3 million offer from Jono. As shown by the HRM’s evaluation process, Jono had received the highest score in the RFP process, in part because of its financial proposal.  

  • Pursuant to a Judicial Review application by the community groups, in 2012, the N.S. Supreme Court set aside the sale to Jono on the basis that the HRM had breached its duty of fairness to the community groups by not following its own policy, and further, that the HRM’s interpretation of “market value” was unreasonable, so the HRM had breached the Charter by selling the property below market value. The Court also ordered Jono to pay a portion of the costs awarded. Jono appealed the decision, and the matter was heard by the N.S. Court of Appeal in May 2014.
  • In the HRM’s view, “market value” is the price the market will offer, so it therefore believed that it was complying with the Charter. 

What would you decide in this case?

Reprinted from The Legal Edge Issue 112, October – December 2015

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.

975 B Alston Street, Victoria, BC V9”A 3S5

Phone: (250) 370-0041   Toll Free: (888) 990-7267       [email protected]


Public-Sector Entities Sharing Bid Information, and When Does Contract A End? NECI


Public-Sector Entities Sharing Bid Information, and When Does Contract A End?

Through our Signature Seminars, eSeminars, Public Sector Procurement Program (PSPP) and other courses, our NECI instructors regularly answer questions about procurement-related issues. Here are two recent questions.

What is the current thinking about public-sector entities sharing bid information? We are in the MASH sector (municipalities, academic institutions, school boards, and health and social service providers) and taking advantage of more and more provincial government tender contracts that are now available to us. We are conscious about bid-shopping, and always advise our users that once we go to RFx, we can’t go back to the government agreements. As the MASH and government collaborations increase, and we handle our own RFx’s, some government parties are curious about our experience in going to market, for when they go back out. We are cautious about the free flow of information, particularly from MASH to government, given that the current direction is the other way around. RFx strategies and the like don’t raise much concern, but sharing results makes us hesitate.

Generally speaking, bid-shopping has to do with using already submitted bid pricing as a negotiating tool with other suppliers. Typically, this relates to cancelling a tender process after closing, and then either going back out to market with the same scope, or using the pricing submitted in negotiations for a direct award of the work. Having said that, we know that the public sector is a lightning rod for challenges, and that the legal definitions of such terms are shaped, over time, by the various allegations that come before the courts.

Obtaining information on the lump-sum price of similar contracts with other public organizations is common practice, and indeed, it is public record, so probably couldn’t be considered improper. Going beyond that, however, and obtaining other pricing that perhaps did not result in an award, might be riskier territory. Using the lump-sum award pricing when shaping internal budgets is common, but if, for example, you were to use that information as justification for cancelling a tender process already underway, we could see some potential issues.

It would be prudent for you to raise this issue and get some legal advice on the implications. As always, this is not legal advice, just our take on the question, as educators. We have not heard this issue from any other organization, but as you say, the practice of sharing information among public-sector entities is becoming more common. While that is a good thing, you are entirely correct to be a little uncomfortable with the practice until you receive a legal opinion on how far you should go. The last thing you want, of course, is for the courts to make that determination for you.

At what point in the competitive bidding process does Contract A end? 

Great question! From a legal perspective, Contract A expires when Contract B (the Performance Contract) is signed with the successful respondent. If there is unfairness, of course there can be a challenge after Contract B is signed, but the alleged unfairness must have taken place during the competition before Contract B was signed.

Do you have procurement-related questions that might be of broad interest (or additions to/rebuttals of our answers)? We invite you to send them to our Legal Editor and Publisher, Maureen Sullivan ([email protected]). We will publish questions of a general nature that we think are relevant and timely. We cannot address specific legal questions, provide legal advice, or guarantee that your question will be published.

Reprinted from The Legal Edge Issue 111, July – September 2015




7 Hints for Finding Work in Smaller Municipalities

It is a known fact that all municipalities, particularly small municipalities, share success and horror stories about experiences they have had with a particular consultant or professional they used. They quite literally pick up the phone and ask other municipalities “who they used”. They do this because municipalities differ from the private sector in that they are not in competition with each other so they freely share their success stories/best practices, etc.

While this works very well for municipalities, this reliance on the word- of- mouth exchange of information can often make it difficult for consultants and professionals to find that first opportunity to work with a municipality to become part of one of those “who did you use” conversations.

Here are a few hints that may help.

Don’t limit yourself to trying to just get contracts with larger municipalities – Smaller municipalities need and use consultants and professionals too because they do not always have the in-house staff with the specialized expertise required to complete all projects. And, it’s often easier to secure some work with smaller municipalities and it’s a great stepping stone for finding larger projects with larger municipalities.

Procurement By-laws – Search the websites of municipalities you would like to work with and familiarize yourself with their procurement by-law or policies to learn their rules for engaging outside experts. While municipalities all must by law, have a procurement policy, their actual purchasing processes may differ slightly (i.e. they may have established different notice periods for those not otherwise mandated, or different advertising methods, etc.) Once you know their methods you can check those sources for work postings.

Search the Minutes of the Committee of the Whole (COW) or Council Meetings – Look for any council resolutions that indicate they will be engaging an outside consultant or professional for assistance. This will give you clues as to what work they will be posting soon and possibly how it will be posted. (i.e RFP, Tender, RFQ, etc) In smaller municipalities look for wording like, “be it resolved that staff is hereby authorized to call for quotes (or advertise by public tender, etc.) for the services of a consultant to undertake ……..”

Review Staff Reports Attached to Meeting Agendas or Minutes – It will most often be the department heads or staff members who have identified a need to bring in a third party professional to assist with a particular project and they will usually write the reasons why they need an outside expert in a report to council. Of course you’ll narrow your search to only the reports from the departments you want to offer your expertise to.

Search the Municipality’s Website to find the Member of Staff responsible for Purchasing – Small municipalities typically do not have Purchasing Officers or Procurement departments and quite often this responsibility lies with the CAO, Treasurer or with Accounts Payable .  

Set up an Appointment – Once you’ve determined who is responsible for purchasing, set up an appointment to meet the individual face to face to introduce your services and tell them how you can help. Do keep your meeting brief though – these folks are busy and taking too much of their time may actually work against you and leave a negative impression.

If you can’t get an appointment to introduce yourself, consider personally dropping off information at the municipality. This may help separate you and your information from the other material they receive in the mail and if they’re looking for someone with your expertise, they are more apt to remember to include you in any calls for quotes, etc. In my years as a municipal CAO, I don’t ever recall having a consultant or professional come to my office to meet me or drop off information for me. If they had of they would have stood out in my mind for sure.

Some municipalities make it a practice to include anything addressed to Mayor and Councillors, in their Council agenda packages. So, if you have a brochure or newsletter about your services this may also be a way to broaden your reach to more of the decision-makers in the municipality.

Set up your profile on – The hints above will work but as you can see, they are very time-consuming and you will only be able to concentrate on just a few municipalities at a time due the amount of research and follow up that will be necessary. However, setting up a profile on and making it as robust and professional as possible, is the quickest and most cost-effective way for you to have the opportunity for direct visibility and exposure to municipal decision-makers.

By selecting the service categories of the services you provide, you’ll be part of the searchable database – and the more municipalities search, the more opportunity there is for you to get found and build your consultancy. You can also check the RFP section of the site to see if there are any RFPs looking for the services you provide.

Finally, once you’ve been successful getting work in a municipality you need to be acutely aware of the fact that if you do a poor job, you may have just ruined your opportunity of finding work elsewhere with a municipality, because the “word- of- mouth” about your performance will have already been spread through municipal networks by then!

Susan is the Principal of – Helping Municipalities & Professionals Connect!

She can be reached at [email protected] or 855.477.5095

** Note – This information is drawn from my own experience as a former municipal CAO in Ontario and processes may be somewhat different in other provinces in Canada


Did Prequalification Include Subcontractors? – You be the Judge NECI

In February 2010, the Regional Municipality of Niagara created a shortlist of general contractors through a formal Request for Prequalification (RFQ) process, in accordance with its Purchasing Policies and Procedures Bylaw. The shortlisting process was for work related to two renovation projects at the Niagara District Airport: the “Groundside” project and the “Airside” project. 

Weinmann Electric Ltd. acted as the electrical subcontractor for Dufferin Construction Company, the successful bidder on the Groundside project, which commenced in June 2010.         

By way of letter dated April 21, 2010, the Region informed each of the five prequalified general contractors, including Dufferin, that they were eligible to submit written tender bids for the Airside project. On the advice of its consultant, the Region decided to specify minimum qualifications for the electrical subcontractors on the Airside project, due to the nature and complexity of the airfield lighting requirements.             

In the April 21, 2010 letter, the Region advised the general contractors bidding on the Airside project that “… electrical subcontractors must have successfully completed at least two airfield lighting projects in Canada with a value of at least $750,000 each.” In the same letter, the Region set out the names of the four electrical contractors that its consultant had said would meet the minimum qualifications, with a stipulation that other subcontractors would be considered, provided they met the minimum qualifications. The requirement for minimum qualifications was subsequently incorporated into the tender document for the Airside project by addendum, without mention of the four named companies.             

Although Weinmann was clearly a well-established electrical contractor, it was not one of the named companies, and did not meet the minimum qualification requirements, as its experience with airfield lighting work was limited. Weinmann contacted representatives of the Region and, through discussions, it became clear that Weinmann might have been able to meet the minimum requirements by partnering with another electrical contractor with suitable experience. On August 3, 2010, before such partnering arrangements could be formalized, and shortly before tender bids for the Airside project were due, the Region informed the bidders that they “may carry Weinmann as the airfield lighting/electric subcontractor for [their tender bids] pending receipt of the requested backup information.”      

Dufferin’s bid for the Airside project named Weinmann as the electrical subcontractor, incorporating Weinmann’s pricing for that aspect of the work. By letter dated August 11, 2010, the Region requested, among other things, the documentation with respect to Weinmann’s qualification as the proposed subcontractor. Although Weinmann did provide the backup documentation to Dufferin on August 13, Dufferin by that point had decided to use another electrical subcontractor on the project, in part due to its concerns about whether Weinmann could meet the requirements, and in part due to concerns about the possibility that Weinmann would be overextended by taking on the Airside project. 

Weinmann initiated litigation and sought damages from the Region, alleging that it lost the Airside electrical subcontracting job because of the unlawful actions of the Region. The Region’s bylaws prescribe the procedure for conducting prequalification processes, including prequalification of any subcontractors. Weinmann alleged that the Region had failed to follow the bylaw by not preparing and advertising a prequalification process for the electrical subcontractors on the Airside project – despite naming four “prequalified” companies in the letter of April 21. The Region denied that any prequalification was done for the electrical subcontractors, so there could have been no breach of the bylaw in question.             

The matter was complicated by the fact that an email from the Region’s consultant referred to the “prequalified list of electrical subcontractors,” although the issue was clarified by a subsequent letter confirming that other subcontractors could qualify by meeting the stipulated minimum requirements.             

What would you decide in this case?


In Weinmann Electric Ltd. v. The Regional Municipality of Niagara, 2016 ONSC 13, the Ontario Supreme Court of Justice concluded that the conduct of the Region was not intended to produce, and did not produce, an exclusive shortlist of electrical subcontractors. The April 21 letter was clear that other subcontractors would be considered if they could meet the requirements. The letter simply included a non-exclusive list of suggested electrical subcontractors, which the Court found to be entirely reasonable, given the non-routine nature of the project. This conclusion was supported by the fact that the tender document for the Airside project did not list these suggested subcontractors; rather, it specified the minimum requirements that had to be met by any electrical subcontractor to be used.             

In concluding that the Region did not conduct a prequalification process for electrical subcontractors, the Court found that there could have been no breach of the cited bylaw. The Court also dismissed general allegations of breach of the duty of fairness. In the words of the Court, “If there has been no breach of the By-Law, and no other unlawful act, there can be no breach of a duty of fairness.”             

In the alternative, the Court found that, even if the Region had conducted a prequalification process and had breached the bylaw in doing so, Weinmann failed to prove that it had suffered any damages as a result. A plaintiff must prove more than an unlawful act in order to recover damages: it must also prove, on the balance of probabilities, that it has suffered a loss as a consequence of the unlawful act. In this case, if the Region had conducted a prequalification process, Weinmann would not have met the requirements, and therefore would not have made the shortlist, rendering it ineligible for the subcontract work in any event.       

Coupled with the vague calculation of the damages alleged by Weinmann – including the fact that the impact on profit margins of having to partner with another company for the electrical work was not reflected – the Court had no hesitation in dismissing Weinmann’s claim, leaving the parties to agree on the amount of costs payable by Weinmann.

Issue 113 | JAN – MAR 2016

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.



Scope Changes in Tendering – NECI

How much freedom does a company or a municipality have to change the scope of a tender? What if you suddenly realize that there is a cheaper or quicker way to do the work? What are the perils of major scope changes – especially after tender closing? A recent case from Alberta – Thompson Bros. (Construction) Ltd. v. Wetaskiwin, [1997] A.J. No. 822 – provides the answers.      

The City of Wetaskiwin was developing a park project with a lake. On October 1, 1996, the City called for tenders for the Urban Park lake excavation project. Tender bids were opened in public. The three lowest were Thompson Brothers ($481,913.23), Central Oilfield Services ($512,970.71), and El San Industries ($525,616.00).

On October 16, the Urban Park committee met and passed an internal motion that City Council approve the tender submitted by Thompson Brothers. The next City Council meeting was scheduled for October 26.

Prior to the October 26 meeting of City Council, City staff had a major brainwave. The staff reviewed internal reports that dealt with City requirements for approximately 40,000 cubic metres of clay at another project (the landfill site). The reports recommended that the clay excavated from the Urban Park lake project be used for the landfill site project.

As a result, two events took place at the City Council meeting on October 26. First, the motion to award the Urban Park lake contract to Thompson Brothers was deferred for two weeks. Then, senior staff recommended that the City seek separate tender bids for the excavation of the landfill site materials, and that the two contracts (lake excavation and landfill site) be awarded to the lowest cumulative bidder.

On October 30, City staff contacted the plaintiff (Thompson Brothers), and told them about the potential work hauling clay from the Urban Park lake project to the landfill site project. On November 2, the plaintiff was asked to provide a unit price per metre to excavate, haul, load and stockpile the clay at the landfill site. The plaintiff was not told that the City had decided to award the two contracts to the lowest cumulative bidder.

On November 4, prices for the landfill site work were received. Thompson Brothers quoted a price of $98,400.00 (unit price of $2.46 per metre), and Central gave a price of $64,800 (unit price of $1.62 per metre). As a result, Central was the lowest cumulative bidder on both tenders, by $2,542.50. On November 24, City Council approved the awarding of both contracts to Central. Thompson Brothers sued the City. The company argued that the City’s actions were unfair and compromised the integrity of the tendering process to such an extent as to breach Contract A. In its August 1997 judgment, the Alberta Court of Queen’s Bench agreed with the plaintiff and awarded damages in Thompson Bros. (Construction) Ltd. v.

Wetaskiwin, [1997] A.J. No. 822. First, Mr. Justice Murray commented that this “ … is another in the long line of cases involving an owner putting a construction job out to tender, tenders being submitted, and at the end of the day the low tender not being accepted.”

More importantly, the Court criticized the changes made by the City. Murray, J. said that “The contract awarded was not responsive to the tender process. Rather, it was for work of a different scope than that contemplated by the tender documentation. What the City did also amounted to a change or modification of the scope of the work after the close of tenders … By using the Plaintiff’s tender in this manner, the City gave Central a second chance to bid on the Lake project which was akin to a form of bid shopping and was unfair to the Plaintiff.”

The plaintiff received damages of $88,323.90 plus court costs. The damage award was based on the profits that the plaintiff lost by not being awarded the contract for the Urban Park lake project.

Reprinted from The Legal Edge Issue 19, May – June 1998




How Precise Does Language Need to be in Software Licences? – You be the Judge NECI

Does your organization hold software licences? This recent case from Quebec is a cautionary tale about ensuring that you include accurate wording about the scope of any licence, and consider and address the issue of revocability. Can the licence be revoked? If so, under what circumstances?     

In 1984, then-student Elizabeth Posada developed a DOS computer program called Ceres to allow users, such as university students or business executives, to vary certain inputs to produce reports and learn business concepts. In December 1984, Posada incorporated a company called Planification-organisation-publications Systèmes (POPS) Ltée, of which she is the sole officer and shareholder.           

In 2007, Posada joined long-standing friends Philippe Chapuis and Benoît Bazoge as a shareholder and employee of their company, 9054-8181 Québec Inc. (IDP). The three had been doctoral students together and all had used Ceres while they were professors or lecturers at the Université du Québec à Montréal (UQAM). (In 1989, for $2,000, Benoît Bazoge had purchased a user’s licence for Ceres on behalf of UQAM. Philippe Chapuis had done the same on behalf of the École Supérieure de Commerce in Tours in 1990.)           

When Posada joined IDP in 2007, she effectively ceased POPS’ commercial operations, and even gave IDP the right to use the POPS trade name. Posada was hired to develop the adaptations of and enhancements to Ceres that IDP wanted. She was responsible for completing work on the software called Omega – the Windows version of Ceres – on which she, Chapuis and Bazoge had collaborated since 1998, and for developing the software that would become known as Epsilon and Comex. These two were scaled-down versions of Omega.           

In October 2008, Posada resigned as a shareholder of IDP because of a dispute over compensation, and left the company. She demanded that IDP stop using Ceres, Epsilon and Comex. IDP refused, and POPS sued IDP. The case went to the Federal Court in April 2009.           

In its April 2013 judgment, the Federal Court found that copyright subsisted in the Ceres software products and subsequent versions, POPS was at least one of the rightful owners of that copyright, IDP had at least an implied licence to use the products (including access to the source code and future adaptations that IDP might develop), POPS was not entitled to revoke that licence, and IDP had not infringed POPS’ copyright, so was not liable for any damages.           

POPS appealed the judgment, arguing, among other things, that Chief Justice Crampton had erred in his decision about the revocability of IDP’s licence, as well as about the scope of it, claiming that, following Posada’s departure, IDP did not have rights to the software, all future adaptations, and the source code – including the right to modify the code.           

See below to discover how the Federal Court of Appeal untangled this case.


The Federal Court of Appeal decision in Planification-organisation-publications Systèmes (POPS) Ltée v. 9054-8181 Québec Inc., 2014 FCA 185, which ultimately found for IDP, reminds us again that litigation is a poor substitute for clear and unequivocal language in contracts and agreements. Perhaps a more subtle lesson is to maintain a firm focus on legal rights and responsibilities, even – and some would argue, especially – when entering into business arrangements with ‘friends’. Expect the unexpected and plan for the end of the relationship, as you would for any contract.           

Posada made several claims. Among them, she claimed that the trial Court had failed to apply the correct principles of law in determining the scope of the software licence, and that, with respect to IDP’s access to the source code, the trial Court had acted ultra petita, meaning that the Court granted more than IDP had asked for (it had not in fact asked for access to the source code, or the right to modify it). With respect to the revocability of the licence, Posada argued that the trial Court had made several errors in law – including not taking a systematic approach from English case law – and that it was not reasonable or fair for IDP to hold a non-revocable licence after Posada and IDP went their separate ways, since (Posada claimed) the licence had been conditional on IDP and Posada working together.           

The Court found that IDP had indeed never asked for access to the source code or for the right to modify it in the future, so it limited IDP’s software licence to all versions of Ceres, Omega, Epsilon and Comex that existed at the end of the IDP/Posada collaboration, without IDP access to the source code.           

With respect to the revocability of the licence, the Court rejected Posada’s argument that the trial Court should have followed English case law. The appeal Court instead used the ‘intention of the parties’ test that is the standard of review under Canadian law. The appeal Court found that the trial Judge had not erred in this, so reaffirmed the trial decision that the licence was non-revocable. Further, the Court found that a non-revocable licence was reasonable and fair, given Bazoge’s and Chapuis’ early purchase of licences to use Ceres, and their later investments of money and staff resources to develop the software. In the Court’s opinion, and in the absence of explicit language to the contrary in the agreement, the licence was not therefore conditional on IDP and Posada working together.           

Although the Court held that IDP was the primarily successful party, each party was responsible for its own costs. The appeal was dismissed, except for a revision to the wording of the trial Court’s decision with respect to the scope of the licence, and specifically to the source code. 

Reprinted from The Legal Edge Issue 109, January – March 2015



Top 10 Rules for Successful Responses – Requests for Proposal (RFP) 101

RFP’s can be lengthy and sometimes confusing documents.

The following Top 10 Rules are intended to assist in understanding RFP fundamentals, so as to increase your probability to succeed, and, even more critically, avoid disqualification.

A Request for Proposal (RFP) is simply a formal document which fundamentally asks, “Explain to me how you will provide me with a good and/or service, and at what price”.

Typically, the RFP is seeking information from Respondents (those who provide proposals in response to an RFP, sometimes also called Proponents) which communicate the following:
(1)  I will meet the MANDATORY REQUIREMENTS  to provide the goods and/or services desired;

(2)  I am the BEST person/company to provide the goods/services for the BEST VALUE (Price),   (EVALUATE MY RESPONSE).

(3)  If you determine that I’ll meet the MANDATORY REQUIREMENTS, and I’m EVALUATED as the BEST respondent, I’m willing to enter into a CONTRACT with you, (most often to be substantially similar to the one attached to the RFP.)

Both the issuer of the RFP, and the Respondent, must follow a formal PROCESS, described in the RFP document, in order for the RFP response to be evaluated.
Organized into the 3 areas above, (MANDATORY REQUIREMENTS, EVALUATE, CONTRACT) plus the 4th, PROCESS, the following top 10 rules will substantially increase your probability of success. Let’s begin with PROCESS.


1. Read the PROCESS section(s) of the RFP FIRST and follow the process precisely. Sweat the Small Stuff: note and meet deadlines precisely, ask clarification questions by the indicated timelines, prepare your response in the format requested, answer all questions, and ensure authorized signatures are provided.

2. Part of the process often has a timeline for asking clarification questions: This is the time to in particular seek any clarification on “musts” or “mandatory requirements” – are these truly mandatory?

3. If there is a bidder’s meeting where questions are being asked, consider going to it to learn more about key issues and questions, and who your competitors might be. At a minimum, be sure to review Q’s and A’s from the meeting, which will more than likely be sent out to all respondents.

4. Once you have completed your response, check to see that your response is complete, and accurate.  It is not uncommon for responses to be disqualified because the response did not have an authorized signature, or because an Appendix (like the Price Table) was omitted when sending the response, or where other requested information was simply missing. If the response is being submitted electronically, follow up to ensure it was received.

MANDATORY REQUIREMENTS  – Can I meet the Mandatory Requirements?

5. Next, read the RFP and note all areas where the word must is indicated, and/or where the RFP states that there are mandatory requirements.  If you do not communicate back that you can meet all mandatory requirements and/or deliver on the musts, your submission will be disqualified – no matter how strong you think the rest of your response is.  Not sure if a requirement is really mandatory? See 2. above, be sure to ask before the clarification question deadline.

EVALUATE- How can I communicate that I’m BEST?

6. Do some research on the organization that prepared the RFP. What are their overall business problems/issues? What are the values/ethics of the organization? Who is on their Board of Directors? If possible, determine who will be evaluating the responses? What do you know about the incumbent supplier and their strengths and weaknesses?

7. Draft your proposal response:

• In the format requested;
• Answer all questions precisely;
• Be sure to address open ended questions, such as “your response should……”.

Your response should at the same time incorporate what you learned from step 6, above, and should be written so that it “hangs together “ –  as an overall proposal to address the “big picture” overall business needs.

8. How much should I write?

• Consider mark weighting carefully – you want to provide greater content length and breadth in areas where you can score the most marks, and taking into consideration 6. above;
• Be careful to include in your proposal the overall answer to the question, “how am I going to fulfill your needs”?
• Provide detail only in areas that are marked highest, and where detail is needed as evidence of a feature or capability. Consider using appendices for details.
• Focus on what’s important – you don’t want to put evaluators, who are reading multiple responses, asleep! Not helpful to include reams of general promotional material, for example, if it doesn’t relate to questions asked or to the overall product or service required.

9. Your Price bid should be:

• Competitive, based on your knowledge of the marketplace.
• Provide Value for Money and be realistic – consider the quality of your goods and services, and the weighting of Price in the RFP.
• Sustainable for you, based on your internal cost and margin characteristics;
• Firm, unless otherwise stated in the RFP, you likely will not be able to renegotiate it during contract finalization.


10. Read the sample contract attached to the RFP and note any language stating “must” or “mandatory”, then refer back to 2. and 5. above to clarify. Overall, once this step is completed, you should be generally comfortable with negotiating a contract substantially similar to that attached to the RFP.

About the Author
Joseph Manner, now principal at JDManner Consulting, has over 15 years of experience in both drafting RFP’s,  and in evaluating RFP responses, from his experience as Director, Store Network Planning at the Liquor Control Board of Ontario (LCBO), and as the Manager, Alternative Service Delivery and Procurement, with the ServiceOntario Project, Government of Ontario. Joe can be reached at [email protected].