CITT: July 2006 Determinations
Re A Complaint by Mircom Technologies Ltd. (CITT File No. PR-2006-004)
The CITT determined that the complaint filed by Mircom Technologies Ltd. (Mircom) against the Department of Public Works and Government Services (PWGSC) was invalid. Mircom alleged that PWGSC improperly declared its proposal non-compliant because, upon not finding the required information in one part of its proposal, PWGSC did not examine the rest of the proposal where the information was located.
The procurement was on behalf of the Department of National Defence (DND) for repair and overhaul (R&O) services in support of the Damage Control System of the Halifax-class frigates, the Fire Detection, Suppression, Alarm and Control Systems of the Iroquois-class destroyers and two shore-based DCS trainers. Four bids were received, and only two bids were declared compliant. Mircom's proposal was deemed not to meet the mandatory requirement regarding corporate experience. The CITT noted that the North American Free Trade Agreement and the Agreement on Government Procurement did not apply to this procurement because the services were being procured for the DND. The Request for Proposal (RFP) contained provisions that outlined the necessary corporate experience. Mircom argued that while the requisite information was not under the heading ‘Corporate Experience', it was sufficiently addressed in the personnel review section of the proposal.
The CITT found that while there was no requirement that the corporate experience be consolidated in one specific section, it was clear that the bidder had the onus of adequately responding to that criteria. Support for this conclusion was found in the note to bidders in the RFP which stated that bids that omitted supporting data that described where and how experience was obtained would be deemed non-responsive.
With respect to the allegation that Mircom's bid was not properly considered in its entirety, the CITT found that given PWGSC's comments in the Government Institution Report (GIR), it had. The statement in the GIR was that "The evaluation of the mandatory requirement for corporate experience was conducted by the three member technical evaluation team of DND…The technical evaluation team determined that the Complainant's proposal offered no evidence of corporate experience in repair and overhaul services." Further, the corporate experience that Mircom professed related solely to manufacturing, design and development services. The CITT found that the evaluators had not been convinced that Mircom had the relevant experience, particularly in R&O services, and that the burden was clearly on the bidder to establish it.
The CITT found that the RFP clearly identified the requirements of the procurement, the criteria to be used in evaluating the bids and the consequences of not satisfying the requirement. There was no evidence that PWGSC breached the procedures and requirements of the Agreement on Internal Trade. Therefore, the complaint was held to be invalid. PWGSC was awarded its reasonable costs incurred in responding to the complaint in the amount of $1,000. (Date of Determination: 2006/07/11.)
Re A Complaint by CPI Canada Inc. (CITT File No. PR-2006-017)
The CITT decided not to initiate an inquiry into this complaint by CPI Canada Inc. (CPI) against the Canadian Space Agency (CSA). The Tribunal found that it did not have jurisdiction to review the complaint as one of the three conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations (Regulations) was not met. In order for the Tribunal to take jurisdiction, a complaint must be in respect of a designated contract.
Under s. 3 of the Regulations, a designated contract is defined in part as a contract concerning a procurement of goods or services by a government institution. Subsection 3(2) defines a government institution as one of the federal government entities set out in the Schedule of Canada in Annex 1001.1a-1 of the North American Free Trade Agreement (NAFTA) or under the heading "CANADA" in Annex 502.1A of the Agreement on Internal Trade (AIT), or under Annex 1 of the Agreement on Government Procurement (AGP).
The solicitation in question concerns a contract for the procurement of goods by the CSA, which is not included in the above annexes and is expressly excluded from coverage under the AIT. Therefore, the CSA is not a government institution and the contract in issue does not constitute a designated contract for the purposes of paragraph 7(1)(b) of the regulations. As such, the CITT does not have jurisdiction to inquire into the complaint. (Date of Determination: 2006/07/18.)
Re A Complaint by Marathon Management Company (CITT File No. PR-2006-018)
The CITT decided not to initiate an inquiry into this complaint by Marathon Management Company (Marathon) against the Department of Public Works and Government Services Canada (PWGSC). Marathon alleged that preferential treatment was given to the winning bidder because it was the previous supplier. Marathon also alleged that PWGSC awarded the contract to a bidder that submitted a higher bid and that its own bid was wrongly rejected as non-responsive despite its sample meeting the requirements according to its manufacturer. Further, Marathon was not provided with the individual prices of the contract, only the total contract price. The Agreement on Internal Trade (AIT) applies to the goods covered by this procurement as they are under Federal Supply Classification code 84.
With respect to Marathon's allegation of preferential treatment and the allegation that PWGSC awarded the contract to a bidder that submitted a higher bid, the CITT found that there was insufficient evidence in the complaint to support the claim and that there was no reasonable indication that the procurement had not been carried out in accordance with the AIT. Regarding Marathon's allegation that its bid was wrongly rejected as non-responsive, the Tribunal found that the correspondence from PWGSC did not indicate that the bid was rejected for that reason. Rather, a more favourable offer had been received. The Tribunal found that there was no reasonable indication that the procurement had not been carried out in accordance with the AIT. Finally, concerning Marathon's allegation that it was not provided with the individual prices of the contract, but only the total contract price, the Tribunal found that there was no requirement under the AIT for the procuring entity to provide unsuccessful bidders with the unit prices of any winning bid. This ground of complaint was also dismissed as disclosing no reasonable indication that the procurement was not carried out in accordance with the applicable trade agreement. (Date of Determination: 2006/07/18.)
Re A Complaint by Calian Ltd. (CITT File No. PR-2006-008)
The CITT determined that the complaint filed by Calian Ltd. (Calian) against the Department of Public Works and Government Services (PWGSC) was valid. The procurement was for the provision of training services relating to basic military driving and vehicle maintenance for the Department of National Defence (DND).
Calian alleged that Valcom Consulting Group Inc. (Valcom), a competitor of Calian, had improperly employed serving Canadian Forces (CF) members attached to the unit that developed the statement of work (SOW) for the subject solicitation. The CF members served as Valcom's recruiters and screened resumes relating to the solicitation. Calian also alleged that the CF members actively attempted to convince prospective employees not to work with Calian and that Valcom received information not available to other bidders as a result of this relationship. Finally, Calian alleged that there was a clear conflict of interest and a reasonable apprehension of bias in respect of this procurement process.
The CITT found that the Agreement on Internal Trade (AIT), the North American Free Trade Agreement (NAFTA) and the Agreement on Government Procurement (AGP) all applied in this case.
First, the Tribunal was required to determine whether the objection to PWGSC was made and the complaint by Calian filed with the tribunal within the timelines set out in the CITT Regulations. The CITT found that Calian was aware of the grounds of its complaint as of the date the RFP was issued (February 10, 2006). Therefore, it had ten working days (up to February 24, 2006) to object. The CITT felt that the record showed that this was done, since an e-mail dated February 28, 2006, referred to two attempts by Calian to reach the Chief of Staff at CFB Gagetown. It was inferred that at least one of those attempts must have been made prior to the February 24 deadline, and the objection was made within the timelines. The CITT also noted that it was not important whether the objection was made to the DND or PWGSC. What was important was that the government departments involved had been advised.
Regarding the complaint to the tribunal, the CITT found that a letter dated March 21, 2006, said that PWGSC did not see a conflict, but suggested that Calian should contact the DND if it had further questions. This alluded to the final decision being made pursuant to the conclusion of a DND investigation. This is in contrast to a letter dated March 8, 2006 that suggested that the complaint was being investigated and would be brought to the attention of the Deputy Minister. Since the March 21st letter did not appear to originate from the Deputy Minister, Calian was reasonable in its interpretation that its objection had not yet been denied. A letter dated March 24, 2006 also stated that PWGSC was reviewing the complaint. Following another e-mail to the Deputy Minister, Calian finally received a letter dated April 10, 2006 that the CITT considered to be a clear denial of its objection. As such, the CITT held that the complaint was timely when filed on April 25, 2006.
The CITT found that all three agreements had been violated by the actions of PWGSC (e.g., Article 504 of the AIT, Article 1008 of the NAFTA, and Article VII of the AGP). "These violations arise from the following: Valcom hired and/or obtained the services of the two named serving CF members, employees of DND; Valcom was actively trying to obtain a contract with DND; and the two named serving CF members performed a service connected with that procurement." A situation was created that violated the spirit of the trade agreements, as well as their specific provisions.
Since the two named CF members were not involved in evaluating the proposals, the CITT did not find that the circumstances gave rise to a reasonable apprehension of bias because there was no influence on the evaluation committee. There was, however, a conflict of interest or such an appearance because the CF members were actively promoting the bid and capabilities of one potential supplier over another, which disadvantaged Calian. The conflict also raised concerns that the CF members might provide information to the potential suppliers who employed them and keep it from others.
The CITT was very adamant that the permissible hiring of serving CF members provides at least the appearance of conflict of interest and would tend to encourage bidders to hire such individuals to increase their chances of success. This is prohibited in the trade agreements and, in this case, resulted in Calian receiving less favourable treatment than Valcom. However, since this practice had been tolerated by DND and accepted by the supplier community until this complaint, the CITT decided not to recommend immediate cancellation of the contract. Instead it recommended that the contract not be extended with respect to the option years and, should DND wish to proceed in those years, a new procurement process should be undertaken. Calian was awarded its costs in preparing and proceeding with the complaint in the amount of $2,400. (Date of Determination: 2006/07/21.)
