If a contract is awarded to a specialized contractor having filed a non-compliant tender through the Bureau des soumissions déposées du Québec (”BDSQ”), can the general contractor be held liable?
This is a tricky question where many principles collide such as the obligation to file a compliant tender, the obligation to analyze and award a contract to the lowest compliant tenderer, and the obligation to perform the contract once awarded.
In some instances, the courts ruled that the general and specialized contractors were at fault, and in others, that the specialized contractor was solely responsible for damages caused by a non-compliant tender filed through the BSDQ. The question doesn't appear to have a universal answer, but rather depends on the facts of each individual case.
The Court of Appeal recently rendered a decision in application of this question1.
Construction D.L.T. (”DLT”) is a general contractor that was awarded a contract following a call for tenders by Société québécoise des infrastructures (”SQI”). It subcontracted the plumbing work to the appellant, 9311-8925 Québec Inc. (”Plomberie Dion”), the only specialized contractor that filed a tender through the BDSQ.
However, after signing the contract, Plomberie Dion realizes that it does not hold all the licences required by the Régie du bâtiment du Québec (“RBQ”) in order to carry out the entire mandate.
DLT then awards the contract to a new subcontractor and is now claiming the difference between the amount of this new contract and the Plomberie Dion contract.
Consequently, the Court of Appeal is called upon to decide which is liable for the damage suffered by DLT as a result of the licensing error. Is it Plomberie Dion for bidding without the required licences or DLT for not verifying the compliance of the tender?
The Court of Appeal reiterates the principle that failure to hold the required licence constitutes a significant error of the bid's compliance, creating an obstacle to the award of a construction contract.
As a reminder, the BSDQ's purpose is to “regularize and improve, for the benefit of all, the procedures for submitting tenders” . To reach this goal, section C-1 of the BDSQ Tendering Code3 (”Code”) provides that a tender filed through the BDSQ can only be accepted if the tendering contractor holds the appropriate licences issued by the RBQ and signs the commitment provided under section C-1 prior to filing the tender. The same rule applies to the recipient contractor receiving the tenders to be authorized to take possession of them.4
These mutual commitments freely entered into under the Code constitute a “collective contract” between the bidding contractor and the recipient contractor5. Failure to comply with the commitments constitutes a breach of contract that could lead to disciplinary or legal action6.
The Court of Appeal is of the opinion that by bidding on work, even inadvertently, without holding all the licenses legally required to perform the work, Plomberie Dion committed a fault within the meaning of the Code, thereby incurring full liability for the damage7, even if it acted in good faith.
DLT was not responsible for the verification of the licences of all tendering subcontractors and could rely on the C-1 commitment provided for in the Code.
In closing, although the decision of the province's highest court absolves the contractor DLT, we strongly advise contractors to verify whether bidders on projects actually hold the appropriate licences, which, in certain circumstances, could help avoid this kind of dispute.
If you have any questions regarding the content of this article, you are invited to contact the undersigned at the following e-mail address: yannick.richard@cainlamarre.ca and cedric.fortin.neron@cainlamarre.ca.
Footnotes
1. 2023 QCCA 1445.
2. Construction BFC Foundation ltée c. Entreprises Pro-Sag inc., 2013 QCCA 1253, par. 55.
3. https://bsdq.org/fr/le-code/le-code-de-soumission/preambule/.
4. Code, sec. C-2
5. Id., par. 59-61.
6. Construction BFC Foundation ltée v. Entreprises Pro-Sag inc., supra, note 2, par. 59 and 62.
7. 9311-8925 Québec inc. (Plomberie Dion Desjardins) v. Construction DLT (2014) inc., supra., note 1, par. 16 et 18.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.