Annual Report March 31, 2012 - Chapter IV

Chapter IV - Procurement Review

Introduction

Potential suppliers that believe that they may have been unfairly treated during a procurement solicitation covered by NAFTA, the AIT, the AGP, the CCFTA, the CPFTA or CCOFTA may file a complaint with the Tribunal. The relevant provisions of the Canadian International Trade Tribunal Procurement Inquiry Regulations allow a complainant to first make an attempt to resolve the issue with the government institution responsible for the procurement before filing a complaint.

The Tribunal's role is to determine whether the government institution followed the procurement procedures and other requirements specified in NAFTA, the AIT, the AGP, the CCFTA, the CPFTA or CCOFTA.

When the Tribunal receives a complaint, it reviews it against the legislative criteria for filing. If there are deficiencies, the complainant is given an opportunity to correct them within the specified time limit. If the Tribunal decides to conduct an inquiry, the government institution is sent a formal notification of the complaint and a copy of the complaint itself. If the contract has been awarded, the government institution, in its acknowledgement of receipt of complaint letter, provides the Tribunal with the name and address of the contract awardee. The Tribunal then sends a notification of the complaint to the contract awardee as a possible interested party. An official notice of the complaint is also published on MERX, Canada's electronic tendering service, and in the Canada Gazette. If the contract in question has not been awarded, the Tribunal may order the government institution to postpone the award of any contract pending the disposition of the complaint by the Tribunal.

After receipt of its copy of the complaint, the relevant government institution files a response called the Government Institution Report. The complainant and any intervener are sent a copy of the response and given an opportunity to submit comments. Any comments received are forwarded to the government institution and other parties to the inquiry.

Copies of any other submissions or reports prepared during the inquiry are also circulated to all parties for their comments. Once this phase of the inquiry is completed, the Tribunal reviews the information on the record and decides if a public hearing is necessary or if the case can be decided on the basis of the information on the record.

The Tribunal then determines whether or not the complaint is valid. If it is, the Tribunal may make recommendations for remedies, such as re-tendering, re-evaluating or providing compensation to the complainant. The government institution, as well as all other parties and interested persons, is notified of the Tribunal's decision. Recommendations made by the Tribunal are, by statute, supposed to be implemented to the greatest extent possible. The Tribunal may also award reasonable costs to the complainant or the responding government institution depending on the nature and circumstances of the case.

Procurement Complaints

Summary of Activities

  2010-2011 2011-2012
Number of Procurement Cases Received
Carried over from previous fiscal year 72 4
Received in fiscal year 94 62
Remanded 1 4
Total 167 70
Complaints Withdrawn or Cases Closed
Withdrawn 6 4
Abandoned while filing - 1
Subtotal 6 5
Disposition—Complaints Received
Decisions to initiate 52 15
Lack of jurisdiction/not a potential supplier 2 7
Late filing 43 11
Not a designated contract/no reasonable indication of a breach/premature 18 28
Subtotal 115 61
Disposition—Complaints Accepted for Inquiry
Complaints dismissed 4 1
Complaints not valid 9 10
Complaints valid or valid in part 76 1
Inquiries ceased 4 -
Subtotal 93 12
Outstanding at End of Fiscal Year 4 3

In 2011-2012, the Department of Public Works and Government Services (PWGSC) issued approximately 15,487 contracts valued at between $25,000 and $2 billion each, for a total value of $13 billion. The 62 complaints that the Tribunal received in the fiscal year pertained to 53 different contracts and represented a value of over $300 million.

Summary of Selected Determinations

During the fiscal year, the Tribunal issued 61 decisions on whether to accept complaints for inquiry, 12 final decisions on complaints that were accepted for inquiry and 4 decisions in cases remanded to the Tribunal by the Federal Court of appeal for a total of 77 decisions. Three cases were still in progress at the end of the fiscal year. The table at the end of this chapter summarizes these activities.

Of the complaints investigated by the Tribunal in carrying out its procurement review functions, certain decisions stand out because of their legal significance. Brief summaries of a representative sample of these cases are included below. These summaries have been prepared for general information purposes only and are not intended to be of any legal value.

PR-2010-086—Entreprise Marissa Inc.

The Tribunal held a public hearing in this case. There were 2 participants in this inquiry. The official record consisted of 33 exhibits.

The complaint was filed by Entreprise Marissa Inc. (Marissa) concerning an invitation to tender by PWGSC for the maintenance dredging of the St. Lawrence Seaway in the North Traverse sector, between Saint-Jean-de-l'Île-d'Orléans and Cap Gribane, and the Bécancour sector, which extends from Bécancour to Batiscan. Marissa alleged that one of the mandatory requirements of the invitation to tender was overly restrictive and created an “unnecessary obstacle” that prevented it from tendering, which, according to Marissa, was contrary to the fair procurement principles set out in the AIT.

According to Marissa, the condition requiring that the dredge be equipped with doors in the hull had never been stipulated previously in any of the invitations to tender for dredging, notwithstanding that the obligation to perform dredging had existed for 27 years. Marissa alleged that the addition of the condition had the effect of restricting competition without valid reason.

The Tribunal held a hearing in Ottawa on April 20, 2011. Marissa called its president and a geological engineer as witnesses, and PWGSC called an expert in dredging. Marissa argued that doors in the hull were hardly advantageous to the environment and called into question the preference for underwater doors found in the environmental impact study. PWGSC responded that, by adding the requirement for doors in the hull, it was merely stipulating what was already the industry norm and that it needed to comply with the environmental impact study.

The Tribunal found no basis to conclude that the subject requirement had been added with a view to eliminating Marissa from the process or that PWGSC discriminated against Marissa or its services. Stipulating requirements in tender documentation that were necessary for the achievement of PWGSC's objectives but which also had the effect of eliminating a potential supplier did not constitute an unnecessary obstacle to trade. Interpreting the AIT without accounting for the Government's needs is unacceptable. The Tribunal concluded that the complaint was not valid.

PR-2011-017—BRC Business Enterprises Ltd.

The Tribunal considered this case on the basis of written submissions. There were 2 participants in this inquiry. The official record consisted of 18 exhibits.

The complaint was filed by BRC Business Enterprises Ltd. (BRC) concerning a procurement by PWGSC for the supply, delivery and installation of freestanding furniture on an as-and-when-required basis. BRC alleged that PWGSC improperly declared non-compliant its offer in response to the Request for a Standing Offer (RFSO) and failed to evaluate its offer in accordance with the express terms of the solicitation documents.

In issue was the application of the RFSO. Article 1.1.1 of Part 4 of the RFSO stated the follows: “Mandatory Criteria must be submitted with the offer or within 5 business days upon request from the Contracting Authority. (Failure to do so will render the offer non-responsive).” Annex C to the RFSO, “TEST REPORT FORMS for Freestanding Office Desk Products and Components” stated the following: “. . . TEST REPORT FORMS MUST ALSO BE COMPLETED FOR EACH SERIES OFFERED AND SUBMITTED WITH YOUR PROPOSAL. FAILURE TO DO SO WILL RENDER YOUR [FIRM'S] PROPOSAL NON-COMPLIANT AND NO FURTHER EVALUATION WILL BE UNDERTAKEN.”

When submitting its offer, BRC also submitted its test report. However, the dimensions of the lateral file stipulated in the test report differed from those stipulated in the RFSO, and PWGSC sought clarification. Not satisfied with BRC's answers, PWGSC evaluated BRC's offer as being non-compliant.

BRC submitted, in effect, that it did not matter that the test was incomplete because the RFSO did not require it at the time of closing but rather only five business days following a request therefor. The Tribunal found that it was consistent with the remainder of the RFSO and with the well-established principle that the onus is on the offeror to demonstrate compliance with mandatory criteria.

The Tribunal found no basis to conclude that, by declaring BRC's bid non-compliant with regard to the Category 2 freestanding furniture on the basis of article 1.1.1 of Part 4 of the RFSO, PWGSC acted in a manner that was inconsistent with the provisions of the RFSO or with any of the applicable provisions of the trade agreements. The Tribunal concluded that the complaint was not valid.

PR-2011-041—FreeBalance Inc.

The Tribunal considered this case on the basis of written submissions. There were 2 participants in this inquiry. The official record consisted of 14 exhibits.

The complaint was filed by FreeBalance Inc. (FreeBalance) concerning a procurement (Solicitation No. 1000299304) by the Canada Revenue Agency (CRA) for the modernization of its revenue management system. More specifically, the CRA proceeded to procure, on a sole-source basis, from SAP Canada Inc. (SAP), the activation key to the SAP Public Sector Collection and Disbursement (PSCD) module, which forms part of an SAP software solution that was already running on the system. FreeBalance alleged that the CRA provided insufficient information for the sole-source justification and for the rejection of its statement of capabilities submitted in response to the Advance Contract Award Notice (ACAN).

The Tribunal found that the evidence disclosed that the CRA issued an ACAN and, in effect, evaluated FreeBalance's statement of capabilities as if it were a proposal in response to a fully detailed RFP. In so doing, the CRA used the ACAN procedure to avoid a competitive process. Accordingly, the Tribunal found that the CRA conducted a limited tendering process that was not justified under Article 506(12) of the AIT, Article 1016(2) of NAFTA, Article XV(1) of the AGP, Article 9.1 of the CCFTA or Article 1409.1 of the CPFTA, or was not otherwise consistent with the trade agreements. The Tribunal concluded that the complaint was valid.

Judicial Review of Procurement Decisions

Decisions Appealed to the Federal Court of Appeal

File No. Complainant Before the Tribunal Applicant Before the Federal Court of Appeal Court File No./Status
PR-2009-044 and PR-2009-045 1091847 Ontario Ltd. 1091847 Ontario Ltd. A—447—09
Application discontinued
(April 20, 2011)
PR-2009-080 to PR-2009-087, PR-2009-092 to PR-2009-099, PR-2009-101 and PR-2009-102, PR-2009-104 to PR-2009-107, PR-2009-109 to PR-2009-117, PR-2009-119 and PR-2009-120, and PR-2009-122 to PR-2009-128 Enterasys Networks of Canada Ltd. Attorney General of Canada A—264—10
Application allowed
(June 20, 2011)
PR-2009-132 to PR-2009-153 Enterasys Networks of Canada Ltd. Attorney General of Canada A—312—10
Application allowed
(June 20, 2011)
PR-2010-004 to PR-2010-006 Enterasys Networks of Canada Ltd. Attorney General of Canada A—321—10
Application allowed
(June 20, 2011)
PR-2010-049, PR-2010-050 and PR-2010-056 to PR-2010-058 Siemens Enterprise Communications Inc. Attorney General of Canada A—39—11
(September 14, 2011)*
PR-2006-045R Les Systèmes Equinox Inc. Les Systèmes Equinox Inc. A—246—11
Application dismissed
(February 15, 2012)
PR-2010-090 Opsis, Gestion d'infrastructures Inc. Opsis, Gestion d'infrastructures Inc. A—253—11
Application dismissed
(February 8, 2012)
PR-2010-086 Entreprise Marissa Inc. Entreprise Marissa Inc. A—298—11
Application discontinued
(January 13, 2012)
PR-2011-007 Acklands-Grainger Inc. Acklands-Grainger Inc A—387—11
PR-2011-031 Bell Canada Bell Canada A—397—11
PR-2011-009 and PR-2011-010 The Access Information Agency Inc. The Access Information Agency Inc. A—419—11
PR-2011-041 FreeBalance Inc. Canada Revenue Agency A—35—12
Application dismissed
(February 15, 2012)
PR-2011-023 Almon Equipment Limited Attorney General of Canada A—45—12
PR-2011-022 Almon Equipment Limited Attorney General of Canada A—46—12
* The application was allowed in part in the case of three Requests for Volume Discounts and dismissed in the case of two Requests for Volume Discounts.
Note: The Tribunal has made reasonable efforts to ensure that the information listed is complete. However, since the Tribunal usually does not participate in appeals to the Federal Court of Appeal or the Federal Court, it is unable to confirm that the list contains all appeals or decisions rendered that were before the Federal Court of Appeal and the Federal Court.

Disposition of Procurement Complaints

File No. Complainant Status/Decision
PR-2009-080R to PR-2009-087R, PR-2009-092R to PR-2009-102R and PR-2009-104R to PR-2009-128R Enterasys Networks of Canada Ltd. Decision rendered on June 29, 2011
Complaints dismissed
PR-2009-132R to PR-2009-153R Enterasys Networks of Canada Ltd. Decision rendered on June 29, 2011
Complaints dismissed
PR-2010-004R to PR-2010-006R Enterasys Networks of Canada Ltd. Decision rendered on June 29, 2011
Complaints dismissed
PR-2010-049R, PR-2010-050R and PR-2010-058R Enterasys Networks of Canada Ltd. Decision rendered on September 30, 2011
Complaints dismissed
PR-2010-086 Entreprise Marissa Inc. Decision issued on June 13, 2011
Complaint not valid
PR-2010-088 3056058 Canada Inc. o/a CLA Personnel Decision issued on May 4, 2011
Complaint not valid
PR-2010-090 Opsis, Gestion d'infrastructures Inc. Decision rendered on June 10, 2011
Complaint dismissed
PR-2010-094 Cauffiel Technologies Corporation Decision made on April 5, 2011
No reasonable indication of a breach
PR-2011-001 A. Salari Decision made on April 13, 2011
Not a designated contract
PR-2011-002 Tyco International of Canada o/a SimplexGrinnell Decision made on April 14, 2011
No reasonable indication of a breach
PR-2011-003 Sanofi Pasteur Limited Decision made on April 20, 2011
Complaint premature
PR-2011-004 D. Chaaban Decision made on May 5, 2011
Not a designated contract
PR-2011-005 ArmorWorks Enterprises Canada, ULC Decision made on May 10, 2011
Late filing
PR-2011-006 Sanofi Pasteur Limited Decision made on May 12, 2011
No reasonable indication of a breach
PR-2011-007 Acklands-Grainger Inc. Decision issued on September 19, 2011
Complaint not valid
PR-2011-008 Vector Aerospace Helicopter Services Inc. Decision made on May 30, 2011
No reasonable indication of a breach
PR-2011-009 The Access Information Agency Inc. Decision issued on October 17, 2011
Complaint not valid
PR-2011-010 The Access Information Agency Inc. Decision issued on October 17, 2011
Complaint not valid
PR-2011-011 TA Instruments Decision made on June 22, 2011
Late filing
PR-2011-012 Supremex Inc. Decision made on June 22, 2011
No reasonable indication of a breach
PR-2011-013 Tyco International of Canada o/a SimplexGrinnell Decision made on July 6, 2011
No reasonable indication of a breach
PR-2011-014 AdVenture Marketing Solutions Inc. Decision made on July 14, 2011
No reasonable indication of a breach
PR-2011-015 141895 Canada Inc. Decision made on July 13, 2011
No reasonable indication of a breach
PR-2011-016 Excel Human Resources Inc. Complaint withdrawn on August 8, 2011
PR-2011-017 BRC Business Enterprises Ltd. Decision issued on November 28, 2011
Complaint not valid
PR-2011-018 3775356 Canada Inc. Decision made on August 15, 2011
No reasonable indication of a breach
PR-2011-019 3775356 Canada Inc. Decision made on August 15, 2011
No reasonable indication of a breach
PR-2011-020 R.G.T. Cloutier Construction Ltd., H&H Construction Inc. and 902474 Ontario Inc., d.b.a. Do-All Construction Decision made on August 22, 2011
Lack of jurisdiction
PR-2011-021 Daigen Communications Decision made on August 23, 2011
No reasonable indication of a breach
PR-2011-022 Almon Equipment Limited Decision issued on January 3, 2012
Complaint not valid
PR-2011-023 Almon Equipment Limited Decision issued on January 3, 2012
Complaint not valid
PR-2011-024 The Masha Krupp Translation Group Limited Decision made on August 25, 2011
No reasonable indication of a breach
PR-2011-025 Valley Associates Inc. Decision made on August 30, 2011
Not a designated contract
PR-2011-026 Air Tindi Ltd. Decision made on August 30, 2011
No reasonable indication of a breach
PR-2011-027 Dymech Engineering Inc. Decision issued on December 2, 2011
Complaint not valid
PR-2011-028 723186 Alberta Ltd. Decision made on September 12, 2011
No reasonable indication of a breach
PR-2011-029 TA Instruments Decision made on September 15, 2011
Lack of jurisdiction
PR-2011-030 PA Consulting Group Decision made on September 20, 2011
No reasonable indication of a breach
PR-2011-031 Bell Canada Decision made on September 26, 2011
No reasonable indication of a breach
PR-2011-032 Almon Equipment Limited Decision made on October 19, 2011
Late filing
PR-2011-033 Almon Equipment Limited Decision made on October 19, 2011
Late filing
PR-2011-034 Dew Engineering and Development ULC Decision made on October 4, 2011
Complaint premature
PR-2011-035 Grass Roots Aviation Environmental Products Complaint abandoned while filing
PR-2011-036 ADRM Technology Consulting Group Corp. Complaint withdrawn on November 14, 2011
PR-2011-037 Ball Harrison Hansell Employee Benefits Insurance Agency Ltd. Decision made on October 18, 2011
Lack of jurisdiction
PR-2011-038 Teledyne Webb Research, a business unit of Teledyne Benthos, Inc. Decision made on October 20, 2011
No reasonable indication of a breach
PR-2011-039 FreeBalance Inc. Decision made on October 20, 2011
Complaint premature
PR-2011-040 Avaya Canada Corp. Decision made on October 26, 2011
Lack of jurisdiction
PR-2011-041 FreeBalance Inc. Decision issued on January 24, 2012
Complaint valid
PR-2011-042 Consortium Genivar—Centre for Asia-Pacific Initiatives Decision made on November 10, 2011
Late filing
PR-2011-043 Excel Human Resources Inc. Decision issued on March 2, 2012
Complaint not valid
PR-2011-044 Deloitte & Touche LLP Complaint withdrawn on March 29, 2012
PR-2011-045 Marathon Watch Company Ltd. Decision made on December 22, 2011
Not a potential supplier
PR-2011-046 Marathon Watch Company Ltd. Decision made on December 22, 2011
Not a potential supplier
PR-2011-047 Systematix IT Solutions Inc. Decision made on December 29, 2011
Complaint premature
PR-2011-048 Marathon Watch Company Ltd. Decision made on December 30, 2011
Not a potential supplier
PR-2011-049 E.G. Spence Residential, Commercial and Industrial Maintenance and Construction Accepted for inquiry
PR-2011-050 Israel Military Industries Ltd. Decision made on February 10, 2012
Not a designated contract
PR-2011-051 CORADIX Technology Consulting Ltd. Decision made on February 20, 2012
Late filing
PR-2011-052 APM Diesel 1992 Inc. Decision made on February 15, 2012
Late filing
PR-2011-053 Service d'entretien JDH Inc. Accepted for inquiry
PR-2011-054 Kanter Marine Inc. Decision made on February 21, 2012
No reasonable indication of a breach
PR-2011-055 The Masha Krupp Translation Group Limited Decision made on March 2, 2012
Complaint premature
PR-2011-056 Brains II Canada Inc. Decision made on March 15, 2012
Late filing
PR-2011-057 Exocortex Technologies Inc. Decision made on March 7, 2012
Late filing
PR-2011-058 Ernst & Young LLP Complaint withdrawn on March 29, 2012
PR-2011-059 Intergage Consulting Group Inc. Decision made on March 16, 2012
Late filing
PR-2011-060 Stonehaven Productions Inc. Decision made on March 16, 2012
Late filing
PR-2011-061 The Masha Krupp Translation Group Limited Under consideration
PR-2011-062 Secure Computing LLC Decision made on March 29, 2012
Decision and reasons to be issued in next fiscal year