CITT: June 2006 Determinations
Re A Complaint by Chessen Group Inc. (CITT File No. PR-2006-014)
The CITT decided not to initiate an inquiry into this complaint by Chessen Group Inc. (Chessen) against the Department of Public Work and Government Services Canada (PWGSC) on behalf of the National Research Council (NRC). Chessen alleged that PWGSC incorrectly declared its proposal non-compliant with two mandatory criteria and that PWGSC did so, not on an assessment of the system proposed, but rather on a requirement to provide references for "similar" systems.
Chessen also alleges that there were grounds for an apprehension of bias and preferential treatment by PWGSC. In particular, that PWGSC relied on references from a previous solicitation rather than the current one and that it amended the delivery date stated in the solicitation the day before bids were to close, making the delivery requirement easier for overseas suppliers to fulfill.
Chessen was advised by PWGSC on April 24, 2006 that it was not the successful bidder. Chessen requested a debriefing on May 1st and was verbally advised the following day that its proposal was non-compliant on the basis that the referenced equipment did not have two features required as a mandatory specification. On May 9, 2006 a debriefing teleconference took place where Chessen was once again advised that its proposal was deemed non-compliant. Chessen filed a complaint with the CITT on May 23rd and filed additional documents on May 24, 2006. The CITT found that the complaint was filed on May 24, 2006.
With respect to Chessen's allegation regarding the evaluation of its proposal, the Tribunal found that Chessen was aware of the basis of its complaint on May 2, 2006 when it received the explanation for the rejection of its proposal. While the debriefing may have provided further detail, there was nothing fundamentally new that was revealed on May 9, 2006. Since the complaint was not filed until May 24, 2006, the Tribunal found that it was not filed within the required time limits established by s.6(1) of the Regulations.
Regarding the allegation of an apprehension of bias, Chessen was found to know of the change of delivery date when the solicitation closed in February. As a result, the complaint on this ground was also filed outside the timelines. The Tribunal also found that there was insufficient evidence to support the allegation that PWGSC relied on references from a previous solicitation rather than the current one. As such, there was no reasonable indication that the procurement had not been carried out in accordance with the applicable trade agreements. (Date of Determination: 2006/06/01.)
Re A Complaint by HITT Holland Institute of Traffic Technology B.V. (File No. PR-2006-013)
The CITT decided not to initiate an inquiry into this complaint by HITT Holland Institute of Traffic Technology B.V. (HITT) against the Department of Public Works and Government Services Canada (PWGSC). HITT alleged that PWGSC had improperly disqualified HITT's proposal and improperly awarded the contract to the incumbent supplier on two grounds.
First, HITT alleged that PWGSC ignored or misinterpreted information provided in the covering letter and the compliance matrix of its proposal. Second, it alleged that PWGSC did not take into account information it provided in response to clarification questions e-mailed to HITT by PWGSC. With respect to the first ground, the Request for Proposal (RFP) instructs bidders that they are "to address each requirement in sufficient depth to permit a complete analysis and assessment by the evaluation team". In other words, the evaluator should be capable of assessing each requirement with the information found in the proposal and treat the proposal as non-responsive when he is unable to find adequate information regarding any mandatory technical requirement of the RFP.
The RFP also required bidders to include a compliance statement with respect to each requirement of the specifications and reserved the right of PWGSC to "seek clarification or verify any of all information" provided by the bidder. In its compliance matrix, HITT marked either "noted" or "C" to indicate whether it met the compliance requirements. HITT defined "C" as meaning that HITT was compliant with the requirement whereas the word "noted" was defined as meaning "read and understood". Since the terms had distinct meaning, the Tribunal found that they could not be used interchangeably and that the term "noted" did not confirm compliance as required by the RFP.
Regarding the second ground of complaint that PWGSC did not consider the clarifications provided by HITT upon request, the CITT found no evidence that clarification questions were not taken into account prior to PWGSC deciding that HITT's proposal did not meet all the technical requirements of the RFP. As such, the CITT found that the complaint did not disclose a reasonable indication that the procurement had not been carried out in accordance with the applicable trade agreements nor that PWGSC had either acted in bad faith or in a discriminatory manner when it conducted the evaluations. (Date of Determination: 2006/06/06.)
Re A Complaint by P&L Communications Inc. (CITT File No. PR-2005-056)
The CITT determined that a complaint filed by P&L Communications Inc. (P&L) against Statistics Canada was valid. P&L alleged that Statistics Canada had improperly awarded the contract to another bidder and it requested that the contract be cancelled and awarded to P&L, or that PCL be compensated for its bid preparation costs, lost profit, and costs of proceeding with its complaint.
The procurement was for the provision of new delivery software and services. The original Request for Proposal (RFP) included a security requirement that "The contractor(s) must hold ‘Reliability' security clearance upon submission of their bid." P&L requested an amendment to the deadline to obtain such security clearance, and the RFP was amended to read "The contractor(s) must hold 'Reliability' security clearance upon signing the contract." Two bids were received and P&L was the successful bidder. On February 10, 2006, Statistics Canada inquired as to the status of P&L's security clearance, and on February 13, 2006, P&L advised Statistics Canada that it had applied but required a sponsorship memo from Statistics Canada in order to obtain the clearance. Statistics Canada sent the memo on February 22, 2006.
On the morning of February 17, 2006, Statistics Canada advised P&L that it was ready to sign the contract and that P&L was required to produce security clearance by noon that day. P&L advised that it objected to the ultimatum and that it was the failure of Statistics Canada to submit the sponsorship application that was holding up the clearance. On February 23, 2006, Statistics Canada advised P&L that the contract had been awarded to the second-ranked bidder. P&L received its security on March 1, 2006.
Regarding its jurisdiction to deal with the complaint, the CITT found that the contract, which was worth $68,952.94, fell within the monetary minimums of the North American Free Trade Agreement (NAFTA) and the Agreement on Internal Trade (AIT).
Both NAFTA and the AIT provide that the requirements of the procurement must be clearly set out in the tender documents. The RFP provided that security clearance was required upon signing the contract. The CITT found that the term "contractor" used in the security requirement rather than the word "bidder" implied that the contract would be awarded before it was signed. As such, it was the signing of the contract that was the milestone marking when the contractor must have its clearance. There was no specification in the RFP that provided a date for the signing of the contract, and there was nothing that gave Statistics Canada the right to unilaterally select a signing date.
In addition, the CITT found that Statistics Canada was fully aware, or should have been aware, of the applicable procedure for obtaining security clearance and that its assistance was required in the process. Nonetheless, it did not send the required sponsorship memo at the appropriate time and was generally uncooperative with P&L. The CITT found that Statistics Canada wrongly interpreted the requirement and applied a timeline for P&L to obtain its clearance that was stricter than the one provided for in the RFP, particularly since P&L reasonably expected that Statistics Canada would co-operate and take a proactive role regarding the security clearance process. The CITT dismissed Statistics Canada's attempt to rely on Nandy v. Canada (Attorney General), 2005 CanLII 16622 (Ont. S.C.), because in that case, the language used in the RFP did not preclude the government institution from unilaterally determining the "contract issuance" date.
In determining the appropriate remedy, the CITT stated that the major factor applicable to this case was that P&L would have won the contract but the contract had already been awarded to the second-ranked bidder. It recommended that Statistics Canada compensate P&L for its lost profit. The amount of the profit was to be calculated based on the price submitted by P&L in its proposal. In addition, P&L was also awarded its reasonable costs incurred in preparing and proceeding with the complaint in the amount of $1,000. (Date of Determination: 2006/06/06.)
Re A Complaint by International Safety Research Inc. (CITT File No. PR-2006-007)
The CITT found that it did not have jurisdiction to continue its inquiry into the complaint by International Safety Research Inc. (ISR) against the Department of Public Works and Government Services Canada (PWGSC) on behalf of the Department of Public Safety and Emergency Preparedness for the provision of professional services for the development of the National Emergency Response System and associated plans and procedures. ISR alleged that the PWGSC incorrectly declared its proposal non-compliant. The Tribunal originally accepted the complaint for inquiry but later, on a motion by PWGSC, held that it did not have jurisdiction to conduct an inquiry into the complaint, as the Government of Canada had invoked the national security exception provided for in the applicable trade agreements.
The CITT noted that under article 1018(1) of the North American Free Trade Agreement, article 1804 of the Agreement on Internal Trade and article XXIII(1) of the Agreement on Government Procurement allow exceptions to the provisions of these trade agreements where national security is involved. The Tribunal found that it does not have jurisdiction to deal with the procurement where the Government has invoked the national security exception before soliciting bids. The CITT can, however, satisfy itself that a national security exception has actually and properly been invoked.
The solicitation document did not indicate that the national security exception had been officially invoked prior to the solicitation. The PWGSC's evidence indicated that the acting Assistant Deputy Minister, Acquisitions Branch, had invoked the exception on or around November 9, 2005 on the basis of the authority delegated by the Government of Canada to the Minister of Public Works and Government Services under s.6 of the Department of Public Works and Government Services Act, in conjunction with paragraph 24(2)(d) of the Interpretation Act. In addition, the evidence showed that the Notice of Proposed Procurement for the solicitation was published on February 3, 2006, and stated that the procurement was excluded from the trade agreements on the basis of national security. As a result, the CITT found that the national security exception had been appropriately invoked in a timely manner by the Government of Canada. (Date of Determination: 2006/06/14.)
Re A Complaint by The Impact Group (CITT File No. PR-2005-050)
The CITT determined that the complaint filed by The Impact Group (Impact) against the National Research Council of Canada (NRC) was valid in part. Impact alleged that: (1) the NRC did not evaluate its proposal in accordance with the evaluation criteria published in the Request for Proposal (RFP); (2) that the NRC used criteria or factors not included in the RFP to evaluate its proposal; (3) that individuals not familiar with the evaluation criteria evaluated the proposals; and (4) that its bid was not evaluated in its entirety.
The RFP was for services relating to Phase 3 of a four-phase strategic planning exercise called the Renewal Project. Phase 3 concerned the development of strategies necessary to realize the vision and achieve the strategic objectives defined in Phase 2. In order to be considered for the contract, bidders had to meet all the mandatory requirements of the RFP, and their technical proposals had to score at least 70 our of 100 points in the rated categories. A scoring grid was provided to the evaluators, but was not provided to bidders as part of the RFP. Only one bidder of seven, Secor, met the mandatory 70 point threshold. Secor was advised to begin work, but was later found non-compliant because it lacked the required security clearance. All other bidders were advised that the RFP had been cancelled in its entirety.
The CITT evaluated grounds 1, 2, and 4 of Impact's complaint. Regarding grounds 1 and 2 (see above), the CITT found that the complaint was valid. During a telephone debriefing, Impact had been provided with four general observations regarding its proposal. There was affidavit evidence to strongly suggest that the observations had been arrived at by consensus of the evaluators and that they were intended to help Impact understand the overall scoring of its proposal. The CITT looked at each observation, and found that observation number 2, that the "Panel proposed was very strong but little indication as to their time involvement on the project", was inconsistent with the low scores that Impact received for "experience of personnel proposed", "knowledge and experience in the development of strategies", "experience in strategic planning with the major science organizations" and "knowledge of change management methods and practices". The Tribunal inferred that the evaluators had not applied the criteria of the RFP and must have been following other, undisclosed criteria. With respect to the other observations, the CITT found that the scores could reasonably be considered generally consistent with the evaluators' comments.
Regarding the ground that Impact's proposal was not evaluated in its entirety, Impact had complained that its financial proposal had been returned unopened. The CITT found that the RFP clearly stated that the technical and financial portions of the bid were to be in separate envelopes and that the financial bid would not be considered unless the technical bid reached the minimum threshold of 70 points. The NRC did not breach its obligations under the trade agreements by failing to consider the financial proposal. This ground for complaint was invalid.
The CITT found that using criteria not indicated in the RFP was a serious deficiency in the procurement process that prejudiced the integrity of the competitive procurement system. In this case, it was not simply a misinterpretation of the criteria in the RFP, but a case where NRC evaluators felt that the proposed panel was strong and evaluated the relevant criteria on an entirely different basis. It was also not clear what prejudice resulted from the breach, in particular whether the RFP would have been cancelled if there had been other responsive bidders.
It was clear that if Impact had known the criteria that were being applied, it would have structured its bid differently or decided not to bid at all. Its proposal had not received the evaluation that the RFP indicated that Impact could expect. The CITT awarded Impact 100 percent of its reasonable bid preparation costs as an appropriate amount of compensation. As Impact did not request costs, no costs were awarded. (Date of Determination: 2006/06/14.)
