Construction Contract Law and Documents

Course No: BMC 102-007

Winter Semester , 2011

Assignment 4

March 17, 2011

Due: April 7, 2011

You work for a general contractor, XYZ Contracting Ltd. (“XYZ”), and your boss, the General Manager, asks you to review the situation with regard to a tender that your company prepared and submitted a month or so ago. The situation is as follows:

Blow Pharmaceuticals Inc. (“Blow”), planned to build a new processing plant south of Calgary and acquired land, retained a design team and procured permits for the work. After this, Blow decided to put the job out to tender and started to perform prequalifications for the general and major trade contractors.

In order to provide the various contenders with information regarding the proposed work, Blow’s consultants, Quickdraw Engineering Ltd. (“Quickdraw”) issued a set of drawing and specifications – all marked PRELIMINARY – for the use of the proponents. The prequalification documents included the following:

To All Responders to the Prequalification Process

You shall review all the material that has been provided to you and complete the questionnaire, in full. The questionnaire shall be submitted to the undersigned by the close of business, Feb 1, 2011. While any contractor or trade contractor who believes that are qualified to perform this work may submit the pre-qualification materials, only those who supply the materials will be considered when tenders are called for the job.

Quickdraw Engineering Ltd.

The materials were made available, publicly, and over a period of time a number of contractors and trade contractors viewed the materials. By Feb 1, 2011, 10 general contractors and many more trade contractors had made their submissions. XYZ was included in the group of 10 general contractors.

It appeared, by Feb 1, 2011, that the project tender call would be delayed until April 2011; coincidently, several other general contractors became aware of the project and contacted Quickdraw to be added to the list of bidders. In addition, 5 of the original group of 10 general contractors decided to withdraw their submissions. Fearing a lack of competitive bids, Blow directed Quickdraw to do a prequalification review on the late-arriving General Contractors and add any qualified General Contractors to the bid list. A general contractor, Pick-Up Plus Ltd. (“Pick-Up”), was added to the bid list.

On April 15, 2011, Quickdraw sent out the following invitation to tender to the companies on the bid list, which included both XYZ and Pick-Up-Plus:

INVITATION TO TENDER

You are invited to submit tenders on the pharmaceutical plant for Blow Pharmaceuticals Ltd. which is to be constructed in Black Diamond Alberta. Parties submitting tenders shall ensure that the tender form is completed in full. Tenders are due at 2:00pm on April 30, 2011 and shall be deposited by an employee of the tendering company at the offices of Quickdraw Engineering Ltd.

Any or no tender may be accepted at the sole discretion of the owner, Blow.

Tenders must remain open for acceptance for 30 days and each tenderer must be prepared to enter into a CCDC -2 2008 contract when it is presented.

In addition, the following tender form was included in the package.

TENDER FORM

Dated: April 30, 2010

Submitted by: ______

I/we hereby offer to construct the pharmaceutical plant in Black Diamond Alberta for Blow Pharmaceuticals Ltd. for the lump sum amount of $______plus GST of $______for a total price of $______.

My/our price is based on the following drawings and specifications:

Drawings 1-120 prepared by Quickdraw Engineering Ltd. dated April 15, 2011
Specifications dated April 15, 2011.

This tender remains open to acceptance until 30 days after the date of this tender.

I/we will start the work no later than June 1, 2011 and complete it by August 30, 2012.

The work to be performed is all work described in the tender documents, above, such that at completion of the contract, the facility will be fully operational.

If we are presented with a CCDC2-2008 contract to perform the above work, executed by Blow Pharmaceuticals Ltd. we will execute the contract document and initiate work immediately.

This tender is submitted by:

______corporate seal

Company Name

______

Authorized Signature

______

Name and Position of signor

During the tender period, your company’s estimator noticed that the date on the tender form was 2010 rather than 2011. She phoned the responsible person at Quickdraw and that person said, “That is a typographical error. Just fix it and submit your tender.” Your company’s estimator made the change in ink on the tender form and completed the rest of the document.

The tenders closed on April 30, 2011 and Pick-Up-Plus Ltd. was the low bidder. Since it was a public opening, the estimator noticed that Pick-Up-Plus had not changed its’ tender form to correct the date.

Please review this and write a memo setting out the issues that might impact your company’s position and your evaluation of whether it could/should be pursued.