The appellant, Her Majesty the Queen in Right of Ontario (The Ministry of Transportation) successsfully appealed the decision of the Divisional Court to quash the Ministry of Transportation’s decision to award a major highway construction project to Thomas Cavanagh Construction Ltd (“Cavanagh”)

Administrative law – Decisions of administrative tribunals – Government contracts – Bidding and tendering – Judicial review – Procedural requirements and fairness

Bot Construction Ltd. v. Ontario (Ministry of Transportation), [2009] O.J. No. 5309, 2009 ONCA 879, Ontario Court of Appeal, December 11, 2009, J.C. MacPherson, R.J. Sharpe, and E.A. Cronk JJ.A.

The Ministry of Transportation (“MTO”) issued a Request to Tender for work to widen Highway 417. To comply with the MTO’s Steel Policy, the Tender required that each bidder complete a Declaration of Declared Value of Imported Steel form and a statement of the value of Canadian structural steel products supplied, so that the MTO could apply a 10% preference for Canadian structural steel products supplied.

Cavanagh’s bid declared that all of its steel was Canadian. Accordingly, all of its steel was subject to the 10% price preference and it won the bid. Before the MTO awarded the contract, the respondent, Bot Construction, submitted a complaint stating that not all of the steel used by Cavanagh was supplied by Canadian producers. Upon investigation, it was revealed that 1.14% of the steel required under the contract was American. This represented 0.26% of the value of the contract. Despite this, the MTO declared Cavanagh’s bid compliant and awarded it the contract.

The Divisional Court overturned the MTO’s decision on the basis that it was unreasonable and did not “fall within a range of possible, acceptable outcomes that are defensible in respect of the facts and the law.” According to the Divisional Court, the MTO’s decision was indefensible because Cavanagh’s bid did not comply with its declaration that it would be using Canadian-sourced steel.

The Court of Appeal overturned the Divisional Court’s decision and restored the MTO’s decision. The Court of Appeal reasoned that even if the use of Canadian steel required a change in the project specifications, the change would be minor and would be readily approved. Moreover, because the amount of imported steel to be used was so minor, even if Cavanagh had declared the use of imported steel on the bridges, it would not have affected the order of the bidders. The Court of Appeal emphasized that the ministry personnel who select bids are highly experienced and noted that this fact should anchor a court’s review of an MTO decision.

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