Quebec Superior Court enforces duty of fairness in procurement processes

December 22, 2021

Steris Corporation v. Groupe d’approvisionnement en commun de l’Est du Québec (GACEQ) (2021 QCCS 5347)

In a December 22, 2021 decision, the Honourable Philippe Belanger, JCS of the Superior Court of Quebec awarded $3,265,680 plus interest in damages in favour of the plaintiff, Steris Corporation (“Steris”) in a claim against the Eastern Quebec Common Procurement Group (“Groupe d’approvisionnement en commun de l’Est du Québec” or the “GACEQ”) and other participating hospitals concerning wrongful conduct on the part of the GACEQ in a procurement dispute.

In 2014, the GACEQ launched a call for tenders for the procurement of low-temperature sterilizers, a specialized area in which limited companies provided services for, intended for use in various Quebec hospitals. Steris, one of the few providers of such procedural products and services, submitted a bid which came in second after Johnson & Johnson Medical Products (“J&J”). Steris subsequently advised the GACEQ that the bid submitted by J&J did not appear to have met several mandatory technical requirements set out in the tender documents, and claimed that the GACEQ ultimately failed in its obligations by accepting a non-compliant tender. Steris consequently sought damages from the GACEQ and participating hospitals for the profits it would have generated had its bid been accepted.

Upon review of the evidence, the Court agreed with Steris that the bid submitted by J&J did not, in fact, satisfy the mandatory requirements of the tender documents. J&J’s proposal further contained discrepancies in the calculations of its adjusted bid price, which was a significant factor leading the GACEQ to award J&J the contract, despite the fact that Steris achieved a higher quality score for its proposal. The Court subsequently reasoned that an accurate analysis of the financial parameters in J&J’s bid would have led the GACEQ to conclude that there was not a considerable price difference between J&J and Steris’ bid prices, and at almost identical prices Steris would have likely been the successful proponent.

The Court ultimately found that the GACEQ unfairly excluded Steris in the procurement process, and awarded Steris $3,265,680 plus interest in damages for its loss of profits as a result of its lost bid, per articles 1611 and 1613 set out in the Civil Code of Quebec.

Antonio Iacovelli and Tania Pinheiro (Commercial Litigation) represented Steris in the successful proceedings.