Executive Summary: Key Legal and Evidentiary Issues

• Central dispute concerned whether a binding “Contract A” bidding contract arose between general contractor Feltz Design Build Inc. and masonry subcontractor Core Tec when Feltz’s tender to the school board mistakenly named “CORE TECK” as its masonry subcontractor.
• Evidence from Feltz’s manager, Hainsley Bailey, was accepted that Feltz always intended to select lower-priced Con-Tact Masonry Ltd., and that “CORE TECK” was a clerical error rather than a deliberate commitment to Core Tec.
• The court found no offer by Feltz to subcontractors and held that the Contract A/Contract B tendering framework applied only between the Board and Feltz, not between Feltz and Core Tec, absent a bid depository regime or express terms binding Feltz to named subcontractors.
• Core Tec’s own masonry quote was held to be materially non-compliant with the tender specifications due to multiple exclusions and conditional language, preventing the formation of any enforceable Contract A even if the framework were extended to subcontractors.
• On damages, Core Tec failed to prove a clear and reliable expectation of profit and, in any event, had substantially mitigated any alleged loss through profits on other projects during the same period.
• Resulting outcome was dismissal of Core Tec’s claim in full, with no damages awarded and costs left to be determined in later written submissions.

Factual background

The dispute arose from a public construction project at Stratford Central Secondary School, overseen by the Avon Maitland District School Board. The Board retained Marklevitz Architects Inc. as project manager and issued a call for tenders on April 15, 2019 for renovations and an addition to the school. Feltz Design Build Inc. was among the pre-qualified general contractors permitted to bid. The Board’s tender documents also listed certain pre-qualified subcontractors for some trades, but no masonry subcontractors were pre-qualified, leaving general contractors free to choose any qualified masonry firm that met the Board’s criteria. Bids from general contractors were to be submitted in person by 2:00 p.m. on May 8, 2019. The tender form required each general contractor to list all proposed subcontractors and provided that “No substitution of subcontractors is permitted after these documents are submitted without the [Board]’s approval.” The project manager emphasized that this clause was designed to prevent successful general contractors from winning the job on the strength of listed subtrades and then switching to less qualified subcontractors afterward. Feltz submitted its bid on May 8, 2019 and was the successful general contractor, entering into a contract with the Board on May 28, 2019. The plaintiff, 1114136 Ontario Inc. carrying on business as Core Tec Contracting, was an experienced masonry contractor that learned of the project from a construction association posting and was not otherwise pre-qualified by the Board.

Tendering process and Core Tec’s claim

On May 8, 2019, at approximately 1:30 p.m., Core Tec faxed Feltz an unsolicited quote for the masonry work. The quote priced the masonry at $769,900 plus HST, was stated to be open for 30 days, and contained a number of exclusions relative to the full masonry scope defined in the tender documents. Later that afternoon, around 1:47 p.m., Feltz received a competing unsolicited masonry bid by email from Con-Tact Masonry Ltd. for $758,000 plus HST, open for 60 days, with fewer and narrower exclusions. Both Core Tec and Con-Tact met the Board’s qualifications for masonry subcontractors. Within Feltz, Hainsley Bailey was responsible for compiling subcontractor bids and finalizing Feltz’s tender to the Board. He remained at the Feltz office to receive last-minute quotes and relayed his subcontractor selections by phone to Cameron Scott, who was physically present at the Board’s offices and handwrote the chosen subcontractors’ names onto the tender form before submission. Bailey testified that he compared Core Tec’s and Con-Tact’s bids and decided that Con-Tact’s lower price and relative exclusions made it the superior bid, so he intended to name Con-Tact as the masonry subcontractor when communicating with Scott. However, when Scott completed the tender form, he erroneously wrote “CORE TECK” as the masonry subcontractor. This name was understood by the project architect to refer to Core Tec when he reviewed the tenders for the Board, and the Board awarded the general contract to Feltz on that basis. In practice, Feltz proceeded as if Con-Tact had been properly listed on its tender. It never contacted Core Tec after bid submission, issued a purchase order to Con-Tact for the masonry work on June 5, 2019, and later delivered a contact list to the project manager identifying Con-Tact as the masonry subcontractor. Con-Tact began masonry work in November 2019. Core Tec only learned months later—from a supplier and then the project manager’s office—that it was believed to have been the successful masonry subcontractor. Using a freedom of information request, Core Tec obtained a copy of Feltz’s tender and discovered that “CORE TECK” had been written in the masonry line. On that basis, it claimed that Feltz had entered into a bidding contract (Contract A) with it and then breached that contract by awarding the masonry subcontract to Con-Tact. The damages Core Tec sought were its alleged lost profits from the project.

Contract A / Contract B and absence of a bidding contract

The court analyzed the dispute under the tendering framework from The Queen v. Ron Engineering and subsequent cases, which distinguish between Contract A (the unilateral bidding contract formed between owner and compliant bidder upon submission of a tender) and Contract B (the construction contract executed when the owner accepts a particular bid). Within that framework, Contract A arises only where the party calling for tenders makes an offer to consider compliant bids on stated terms, and a bidder accepts that offer by submitting a compliant tender in response. The court held that in this case Contract A clearly arose between the Board and Feltz: the Board issued a formal, detailed tender call with terms and conditions, and Feltz accepted by submitting its bid. By contrast, Feltz never initiated a comparable tendering process with potential masonry subcontractors. It did not pre-qualify masonry bidders, did not issue its own call for subcontractor tenders, did not circulate subcontractor tender rules, and did not communicate any offer to Core Tec. Core Tec’s bid was unsolicited and therefore could not be an “acceptance” of a non-existent offer. The court distinguished authority such as Naylor Group v. Ellis-Don and R.G. Lamarche v. Lundy Construction, where a formal bid depository system and express rules required general contractors to use named subcontractors, thereby creating a Contract A between general contractors and the “carried” subcontractors. In this case, there was no bid depository and no parallel regime governing subcontractor bidding. The terms in the Board’s tender documents, including the restriction on substituting subcontractors without Board approval, governed only the relationship between the Board and the successful general contractor. Core Tec, as a non-party, could not enforce those terms. Even if Bailey had deliberately chosen Core Tec and correctly written its name, that would not have, by itself, created a Contract A enforceable by Core Tec in the absence of any offer or tendering scheme directed to subcontractors.

Compliance of Core Tec’s bid and non-formation of Contract A

The court went on to hold that, even assuming the Ron Engineering analysis could be extended to relationships between general contractors and subcontractors in this context, Core Tec’s own quote was materially non-compliant with the applicable tender requirements. The tender package from the Board set out a detailed masonry scope of work, including specific items such as composite wall ties, precast concrete sills, and fastening ties. The court accepted evidence from the project architect that all listed items were necessary parts of the masonry scope and that a general contractor could not submit a compliant bid to the Board while excluding such work. Core Tec’s quote, however, was expressly made “subject to” review of final working drawings and contained 26 exclusions, including major components within the defined masonry scope. In the court’s view, those exclusions meant Core Tec was not committing to complete the full scope of masonry work, thereby leaving the ultimate price to Feltz and the Board uncertain and undermining a central objective of the tendering process. The court also noted several formal defects: the quote was not delivered in person as prescribed in the tender documents, was not signed by all required signing officers, and did not bear a corporate seal. While these formal issues were of lesser weight, they underscored that Core Tec could not selectively invoke the tender package when it wished to rely on owner–contractor rules but disregard them when they cut against its position. On the court’s analysis, a non-compliant bid cannot form Contract A; at most it is a counteroffer that requires explicit acceptance. Nothing in the evidence showed that Feltz ever accepted such a counteroffer from Core Tec. For all these reasons, the court held that no Contract A arose between Feltz and Core Tec. Without a contract, there could be no breach.

Damages, mitigation and overall outcome

For completeness, the court considered damages on the assumption that a Contract A did exist and had been breached. Core Tec claimed $128,209.39 as lost profit, calculated from an internal “estimate summary sheet” that broke down “direct costs” and a 20% “administration” line item. The estimate also showed a separate 5% “profit” entry that was then deducted, suggesting the final quoted price contained no explicit profit margin. Core Tec’s principal, Mr. Beland, testified that the 20% administration line was intended to cover both overhead and hoped-for profit, but he could not say what share was true profit versus fixed operating costs such as salaries, insurance, utilities, and equipment payments. The court concluded that Core Tec had not proven a reasonable expectation of the claimed profit figure. At most, any profit would have been some lesser, unidentified portion of the administration amount, and the evidence did not permit a reliable calculation. Turning to mitigation, Core Tec asserted in affidavit evidence that it had not been awarded any other projects in the relevant period and therefore had no mitigation income. Undertaking answers and financial records, however, revealed that Core Tec had in fact performed four other projects between April and November 2019, earning profits totaling approximately $120,000. This not only undermined the credibility of its earlier evidence, but also demonstrated substantial mitigation of any loss. When that mitigation is compared to the already unproven profit claim, the court found that Core Tec had not established any net damages. In the result, the court dismissed the action in its entirety. Feltz Design Build Inc., the defendant general contractor, was the successful party. No damages were awarded to Core Tec, and the judgment left the question of costs to be resolved through subsequent written submissions; as no specific costs figure was fixed in this decision, the total monetary amount ultimately ordered in Feltz’s favour cannot be determined from this judgment alone.