A recent decision of Canada’s Federal Court of Appeal addresses issues of particular relevance and interest to design-build team participants engaged in the tendering process. This Federal Court of Appeal decision, dated 21 July, 2006, responds to an appeal and cross-appeal from the Federal Trial Court’s decision. The case is Her Majesty the Queen v. Design Services Ltd et al. (“Design Services” ).1 At issue were both contract and tort issues. Of particular interest was whether the architect, consultants and subcontractors comprising (together with the bidding contractor) the design-build team members, were entitled to claim third party beneficiary rights under Canada’s Contract A doctrine.

Canada’s law relating to tendering changed dramatically 25 years ago as a result of a decision by the Supreme Court of Canada in The Queen in Right of Ontario v. Ron Engineering and Construction (Eastern) Ltd (“Ron Engineering” ).2 Prior to Ron Engineering bids in response to requests for invitations for tenders were considered offers, the acceptance of one of which would result in the formation of the contract. In its decision in Ron Engineering , the Supreme Court of Canada confirmed that an invitation to tender may itself constitute an offer to contract which upon the submission of a bid and response to the call for tenders, may become a binding contract. Whether or not Contract A forms upon the submission of a tender will depend upon the provisions of the tender call. In Ron Engineering , the Supreme Court of Canada labelled this preliminary tendering contract “Contract A”.