District of Barriere wins BC Supreme Court Appeal

Jan. 3 decision unanimous to dismiss Purcha and Son Ltd. appeal

North Thompson Star/Journal

In a unanimous decision, three BC Supreme Court of Appeal judges have dismissed an appeal from Purcha and Son Ltd. regarding the District of Barriere’s decision to award Defiance Enterprises Inc. the 2016 – 2019 Winter Road Maintenance contract.

A press release put out by the District of Barriere on Jan 8, 2018 stated, “This decision regarding the associated Request for Proposals (RFP) process will hopefully put an end to the almost three year legal battle against the District. During this time District taxpayers have expended close to $90,000 for legal advice and associated services not including the staff time involved. Since the case was a judicial review as opposed to a suit for damages, the related costs were not covered by insurance. Although the District was awarded costs, this figure which is decided upon by the Courts, amounts to only around $20,000, a mere fraction of the actual costs surrounding the case.”

Five years after incorporation, in the fall of 2013, the District of Barriere took over responsibility for local road maintenance from the provincial government. When the Request for Proposals (RFP) for Winter Road Maintenance was first issued, Murray Purcha and Son Ltd. was the only proponent who responded to the RFP.

Council awarded the three year contract to Purcha at a price of $212,979.83 per annum, which included an option to extend for an additional two years at the mutual agreement of the District and the contractor.

The District reports that in the third year of that contract, the Council decided to see if there was potentially a more cost effective option, including doing the job in-house. They then made the decision to not entertain the extension of the existing contract but to issue a new RFP to see if there were other proponents that might come forward with a better price. A budget of $150,869 was proposed by the Roads Department in the draft budget process that was available to the public for review and comment during the time the RFP was open. There were five proposals submitted in a two-envelope process. Council awarded the contract to Defiance Enterprise Inc. on Feb. 17, 2016, at a price of $156,000 per annum. The other bids were submitted by: Purcha – $179,625.60; Tri Service – $179,999.98; Borrow – $194,258.00; and Surespan – $453,600.00.

Shortly thereafter, Murray Purcha and Son Ltd., began legal action against the District respecting its decision based on what they considered to be flaws with a tainted RFP process. The first course of action was via the New West Partnership Trade Agreement complaint process which was eventually abandoned for a court-based process referred to as a Judicial Review of the District’s RFP process. It was finally heard on July 4-7, 2017 with a decision in the District’s favour by the Judicial Review Judge coming out on March 19, 2018, which was summarized as follows:

“the District met their duty to act fairly to all bidders to RFP. I find that the award of the contract to Defiance was reasonable and within a range of possible acceptable outcomes that are defensible in respect of the facts and law. This court should not interfere.”

The District was then notified that Murray Purcha and Son Ltd. had appealed the decision of the Kamloops Supreme Court judge to the respective Court of Appeal in Vancouver. A panel of three judges heard the appeal on Oct 3, 2018 with their unanimous decision to dismiss the appeal just released recently on January 3, 2019.

An excerpt from the summary of their decision reads as follows:

“The appellant sought judicial review of a procurement decision in which the contract was awarded to a party other than the appellant. Judicial review was dismissed. The issue is whether the District breached a duty of procedural fairness owed to the appellant and the other proponents. Held: appeal dismissed.

“The District followed the procedure laid out in the Request for Proposal and met its obligation of procedural fairness. The substantive decision met the standard of reasonableness.”

The Star/Journal asked Purcha and Son Ltd. contractor Murray Purcha what his feeling were on the Jan. 3, 2019, BC Supreme Court of Appeal decision?

“I was disappointed,” said Purcha, “And many things in the contract were not followed.”

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