Annual Report March 31, 2014 - Chapter IV

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, the CCOFTA or the CPAFTA, or any other applicable trade agreement, 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 the applicable trade agreements.

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 published 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, circumstances and outcome of the case.

Improving Access for Complainants to the Tribunal

This year, as contemplated by section 30.19 of the CITT Act, the Chairperson wrote to the Deputy Minister of the Department of Public Works and Government Services (PWGSC), with an observation regarding procurement processes conducted by PWGSC.

The Chairperson observed that complainants that were seeking redress under section 30.1 and following of the CITT Act were often unaware of their recourse options until it was too late. In fact, over a recent five-year period that was examined, 23 percent of complaints to the Tribunal did not proceed because complainants failed to file on time. It was noted that this was of concern because complainants may have been denied a hearing into the issues that they raised, as well as access to potential remedies, only because they were not aware of the need to make an objection to PWGSC or to file a complaint with the Tribunal within the 10-day time frame set out in the Canadian International Trade Tribunal Procurement Inquiry Regulations.

The Deputy Minister of PWGSC and the Chairperson exchanged correspondence on this subject. PWGSC has since taken steps to increase awareness of these time constraints and has suggested that the time limit for filing a complaint with the Tribunal be increased to 30 days.

This issue is not limited to procurements conducted by PWGSC. In fact, determinations issued by the Tribunal this year concerning procurements conducted by Parks Canada and the RCMP also recommended that solicitation documents, and letters advising bidders that they were not successful (regret letters), contain a paragraph advising them of the time constraints to file a complaint with the Tribunal. The Tribunal provided the text of the notification that it would like to see provided to bidders in such circumstances. Parks Canada did not specifically respond to this request when it informed the Tribunal of the extent to which it was implementing the Tribunal’s other recommendations concerning the solicitation in issue in that matter. The RCMP explicitly stated that it will include information in its regret letters about recourse to the Tribunal, if applicable.

Instead of the Tribunal having to make similar recommendations in such a case-by-case manner, and with varying results, the Tribunal would like to see its suggested notification clause included in both solicitation documents, and regret letters, and to see this practice adopted uniformly and voluntarily by all branches of the Government of Canada, in a pro-active manner.

Procurement Complaints

Summary of Activities

In 2013-2014, PWGSC issued approximately 22,669 contracts valued between $25,000 and $2 billion, for a total value of $151 billion.

Summary of Selected Determinations

During the fiscal year, the Tribunal issued 46 decisions on whether to accept complaints for inquiry and 14 final decisions on complaints that were accepted for inquiry, for a total of 60 decisions. Nine cases were still in progress at the end of the fiscal year, one of which was still under consideration for being accepted for inquiry.

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.

PR-2013-005 and PR-2013-008—Raymond Chabot Grant Thornton Consulting Inc. and PricewaterhouseCoopers LLP

Raymond Chabot Grant Thornton Consulting Inc. (RCGT) and PricewaterhouseCoopers LLP (PwC) each filed complaints concerning a procurement by PWGSC for the provision of forensic audit services. RCGT alleged that PWGSC had improperly concluded that one of the projects listed in the résumé of a proposed resource was not a forensic audit, while PwC argued that PWGSC had improperly found that the sample forensic audit report provided by PwC was not forensic audit report. As the complaints both related to the same designated contract, and as the matters at issue both centered on the proper definition of a forensic audit, the Tribunal determined that the complaints should be joined and heard together. Deloitte LLP, Ernst & Young LLP, and KPMG LLP all requested, and were granted, intervener status in the complaint.

In order to determine the proper meaning of the term “forensic audit”, the Tribunal looked to the Statement of Work (SOW) which formed part of the solicitation. In doing so, the Tribunal reiterated that the meaning of a term, in the context of its usage in a Request for Proposal (RFP), is logically connected to the tasks/deliverables set out in the SOW. As such, the Tribunal found that, for the purposes of the solicitation, a forensic audit is one which is predicated on the existence of reasonable grounds to suspect that fraud or other illegal acts have occurred. Similarly, the Tribunal held that the sample forensic audit report contemplated in the solicitation documents referred to a final report which would allow either the drawing of conclusions confirming or refuting the allegations which triggered the audit.

In reaching its conclusion, the Tribunal noted that it is well established that it would only interfere with an evaluation by PWGSC that was unreasonable. Moreover, an evaluation would be considered reasonable if it was supported by a tenable explanation, regardless of whether or not the Tribunal itself found that explanation compelling. As a result, the Tribunal held that PWGSC’s evaluation of both RCGT’s and PwC’s bids was reasonable, and that the complaints were therefore not valid.

PR-2013-014—Knowledge Circle Learning Services Inc.

This complaint was filed by Knowledge Circle Learning Services Inc. (Knowledge Circle) concerning a Request for Standing Offer by the Department of Health (Health Canada) for the provision of French language training services. Knowledge Circle alleged that Health Canada improperly extended 6 of 10 Standing Offer Agreements (SOAs) beyond the maximum duration specified in the Request for Standing Offer and in the original 10 SOAs.

The Tribunal noted that, under the relevant trade agreements, an invitation to participate must be published whenever a government institution seeks to acquire or continue services that are not provided for under an ongoing contract, except for in certain limited circumstances. Therefore, the Tribunal held that Health Canada should have created new procurements in order to continue to receive French language training services, since it did not have the authority, unilaterally or through negotiations, to extend the SOAs beyond their expiry. Accordingly, the complaint was found to be valid.

PR-2013-029—R.H. MacFarlands (1996) Ltd.

R.H. MacFarlands (1996) Ltd. (MacFarlands) filed a complaint concerning a procurement by PWGSC for five tracked line construction vehicles and ancillary items, including the provision of maintenance personnel training and operator training. MacFarlands submitted that PWGSC wrongly disqualified its proposal because it did not include a mandatory signature from a senior engineer as proof of compliance. MacFarlands argued that PWGSC’s finding was unfair, since its proposal complied with all other mandatory technical evaluation criteria in the RFP, and the missing signature was simply a trivial oversight.

While the Tribunal recognized that MacFarland’s bid likely would have been found compliant were it not for the missing signature, it nonetheless held that it could not intervene in cases where mandatory criteria was not met. The Tribunal held that requiring that all potential suppliers meet every mandatory requirement of each solicitation is a cornerstone of the integrity of the tendering system. In this case, MacFarlands recognized that a mandatory signature was not included in its bid. Accordingly, the complaint did not disclose a reasonable indication that PWGSC breached the applicable trade agreements in carrying out its evaluation, and the Tribunal determined that no inquiry was necessary.

Disposition of Procurement Complaints

Judicial Review of Procurement Decisions

Decisions Appealed to the Federal Court of Appeal