Annual Report March 31, 2016- 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, the CCOFTA, the CPAFTA, the CHFTA or the CKFTA, 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 a 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 should, by statute, 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.

Procurement Complaints

Summary of Activities
  2014-2015 2015-2016
Number of procurement cases received
Carried over from previous fiscal year 9 13
Received in fiscal year 69 70
Total 78 83
Disposition—Complaints accepted for inquiry
Dismissed 3 6
Not valid 6 14
Valid or valid in part 13 3
Ceased 5 2
Withdrawn/abandoned 4 2
Subtotal 31 27
Disposition—Complaints not accepted for inquiry
Lack of jurisdiction/not a potential supplier 4 6
Late filing 8 10
Not a designated contract/no reasonable indication of a breach/premature 20 30
Withdrawn/abandoned 2 2
Subtotal 34 48
Outstanding at end of fiscal year 13 8
Decisions to initiate 33 24
Remanded cases - -

Summary of Selected Determinations

During the fiscal year, the Tribunal issued 70 decisions on whether to accept complaints for inquiry and 25 final decisions on complaints that were accepted for inquiry, for a total of 95 decisions. Eight 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-2015-011—Arctus Inc.

In this procurement inquiry, Arctus Inc. (Arctus) filed a complaint with the Tribunal under subsection 30.11(1) of the CITT Act with regard to a solicitation for the provision of services for the conduct of a large-scale suspended matter monitoring demonstration project at sea using multispectral satellite imagery during an actual dredging project.

Firstly, Arctus alleged that the evaluation of the experience of its proposed resources was undertaken incorrectly. In this regard, Arctus asserted that the evaluators should have undertaken an on-line search of its proposed resources instead of limiting themselves to the contents of its bid. Secondly, Arctus alleged that some of the evaluation criteria were not relevant or were improperly weighted. In this regard, Arctus asserted that it was incorrect to require the orthorectification of images because this is a process that is not relevant to coastal waters and, further, that in any event the same points should not have been awarded to the “atmospheric corrections” step as was awarded to the “orthorectification” step. Thirdly, Arctus alleged that members of the evaluation committee did not have the necessary scientific expertise to analyze the bids received.

The Tribunal considered the requirement—contained in multiple trade agreements—that procuring entities provide potential suppliers with all the information necessary to permit them to submit responsive tenders, including the criteria which will be used for evaluating and awarding the contract. In addition, the Tribunal considered the stipulation—also found in multiple trade agreements—that to be considered for contract award, a proposal must conform to the essential requirements set out in the solicitation documentation.

With regard to Arctus’ assertion that the evaluators should have undertaken an on-line search of its proposed resources, the Tribunal noted that the onus regarding conformity to the essential requirements rests with Arctus, and since Arctus did not provide adequate information, the evaluators acted reasonably in assessing Arctus’ bid. In light of this finding, the Tribunal concluded that it was unnecessary to rule on the other grounds of the complaint.

This procurement inquiry was reiterative, in that it affirmed the rule that bidders are required to submit bids that conform to all of the essential requirements of solicitation documents, and cannot instead place an onus on the soliciting institution to undertake investigations with the objective of securing information not made available by such bidders.

PR-2014-048—Pomerleau Inc.

In this procurement inquiry, Pomerleau Inc. (Pomerleau) filed a complaint with the Tribunal under subsection 30.11(1) of the CITT Act with regard to a solicitation for the provision of construction management services. The solicitation was conducted by Brookfield Johnson Controls Canada LP (BJCC), a private party, on behalf of the Department of Public Works and Government Services (PWGSC).

Pomerleau alleged that its bid was improperly found to be non-compliant because provisions of the solicitation were misinterpreted or misapplied, that undisclosed criteria were used during the evaluation and that unwarranted clarifications were sought. In essence, Pomerleau asserted that the solicitation allowed it to include profit and overhead costs in the hourly rates for its proposed resources or, alternatively, that the solicitation was ambiguous on the issue.

In response to Pomerleau’s complaint, PWGSC filed a motion to dismiss on the basis that the Tribunal did not have jurisdiction to inquire into the complaint. In addition, PWGSC failed to disclose documents, contravened the Tribunal’s deadlines and informed the Tribunal—after expending the time it was allotted to respond to Pomerleau’s complaint—that it was unable to respond to the substantive grounds of the complaint because BJCC, and not it, was involved in the procurement process. Besides the above, PWGSC was ordered by the Tribunal to file submissions on the merits of Pomerleau’s complaint.

In its reasons, the Tribunal found it necessary to catalogue the procedural recalcitrance of counsel for PWGSC and to remark that “[n]o government institution should place the Tribunal in that situation again.” In addition, with regard to PWGSC’s motion to dismiss on the basis that the Tribunal did not have jurisdiction, the Tribunal noted that it had jurisdiction since the solicitation remained an instance of public procurement, with BJCC simply playing the role of PWGSC. The Tribunal also found that the solicitation was not—as PWGSC and BJCC asserted—a subcontract, since BJCC was not itself under contract to provide construction services to PWGSC but, instead, was acting as its agent with regard to the procurement of those services. In essence, the Tribunal concluded that public procurement conducted via a private party is public procurement nonetheless.

Concerning the merits of the complaint, the Tribunal concluded that it was not valid because Pomerleau, by including profit and overhead costs in the hourly rates for its proposed resources, actually failed to comply with the stated requirements of the solicitation. The revenue-generating structure of the solicitation was clear in that there was to be no mark-up of the direct labour cost but, instead, overhead costs related to supplying that direct labour were to be met indirectly through the construction manager’s fee.

PR-2015-026—Raytheon Canada Limited

In this procurement inquiry, Raytheon Canada Limited (Raytheon) filed a complaint with the Tribunal under subsection 30.11(1) of the CITT Act with regard to a solicitation on behalf of the Department of National Defence for the provision of an Integrated Soldier System Project (ISSP) pertaining to over 4,000 soldier-wearable communications suites, complete with required accessories, support equipment, contract management, training, logistic and engineering support. Raytheon alleged that PWGSC did not evaluate its bid fairly and that it evaluated the “availability” of its ISSP suite instead of its “performance”.

In attempting to substantiate its complaint, Raytheon asserted that there must have been “latent defects” that compromised the evaluation. Raytheon admitted that “. . . there is insufficient information available to pinpoint precisely what those latent defects are . . . .” As Raytheon bore the onus of making the case that the solicitation process was not conducted in accordance with the trade agreements, the Tribunal declined to find for Raytheon in the midst of such a paucity of evidence. Further, the Tribunal found that Raytheon’s allegations were untimely in that Raytheon knew, or reasonably should have known, about the grounds of its complaint during the bid submission process. Thus, it was incumbent upon Raytheon, in keeping with the Canadian International Trade Tribunal Regulations, to file a complaint within the established time frame instead of adopting a “wait and see” stance.

Raytheon requested that a portion of the evaluation undertaken by PWGSC be subjected to ex-post facto analysis by an expert, with the objective of unveiling purported latent defects Raytheon alleged to exist regarding the evaluation. The Tribunal rejected this request, noting that it reviews procurement processes against the standard of reasonableness and affords a large amount of deference to evaluators. In addition, the Tribunal found that Raytheon’s proposed use of an expert was an improper attempt at justifying the “wait and see” stance it had adopted.

The Tribunal also found that Raytheon’s allegation that PWGSC did not evaluate its bid fairly was entirely bald and unsubstantiated, and with regard to the “availability” versus “performance” allegation, the Tribunal found as follows: “. . . Raytheon is stating that its ISSP suite could not be evaluated until any and all shortcomings dealing with “availability” had been ironed out. Raytheon’s position on this ground must be rejected, as that is not an evaluation, but testing and development for market readiness.”

Disposition of Procurement Complaints
File No. Complainant Status/Decision
PR-2014-047 Lanthier Bakery Ltd. Decision issued May 6, 2015
Complaint not valid
PR-2014-048 Pomerleau Inc. Decision issued May 21, 2015
Complaint not valid
PR-2014-050 Samson & Associates Decision issued April 13, 2015
Complaint not valid
PR-2014-053 Monroe Solutions Group Inc. Decision issued June 10, 2015
Complaint dismissed
PR-2014-054 Monroe Solutions Group Inc. Decision issued June 10, 2015
Complaint dismissed
PR-2014-055 Deloitte Inc. Decision issued June 10, 2015
Complaint valid in part
PR-2014-056 Monroe Solutions Group Inc. Decision issued June 10, 2015
Complaint dismissed
PR-2014-057 PricewaterhouseCoopers LLP Decision issued April 13, 2015
Inquiry ceased
PR-2014-060 Marcomm Systems Group Inc. Decision issued April 22, 2015
Complaint dismissed
PR-2014-061 Falcon Environmental Services Inc. Decision issued May 13, 2015
Complaint not valid
PR-2014-067 Heddle Marine Services Inc. Decision made on April 13, 2015
Late filing
PR-2014-068 JOLI Distribution F. Hendel Inc. Decision made on April 8, 2015
Late filing
PR-2014-069 Accelerated Technology Laboratories, Inc. Decision made on April 1, 2015
Complaint premature
PR-2015-001 Dalian Enterprises Inc. Decision issued May 27, 2015
Complaint dismissed
PR-2015-002 Samson & Associates Decision issued July 16, 2015
Complaint not valid
PR-2015-003 Juniper Networks Decision made on April 29, 2015
Not a potential supplier
PR-2015-004 Workplace Medical Corp. Decision issued July 27, 2015
Complaint not valid
PR-2015-005 Oproma Inc. Complaint withdrawn on July 6, 2015
PR-2015-006 Optima Decision made on May 21, 2015
Late filing
PR-2015-007 Space2place Design Inc. Decision made on May 20, 2015
Complaint premature
PR-2015-008 Simex Defence Inc. Decision made on May 25, 2015
Complaint premature
PR-2015-009 Survival Systems Training Limited Decision made on June 3, 2015
Complaint premature
PR-2015-010 Survival Systems Training Limited Decision issued September 3, 2015
Complaint not valid
PR-2015-011 Arctus Inc. Decision issued October 7, 2015
Complaint not valid
PR-2015-012 Space2place Design Inc. Decision issued October 30, 2015
Complaint valid
PR-2015-013 Konica Minolta Business Solutions (Canada) Ltd. Decision made on July 3, 2015
No reasonable indication of breach
PR-2015-014 Workplace Medical Corp. Decision made on July 3, 2015
Lack of jurisdiction
PR-2015-015 HeartZAP Services Inc. Decision made on July 7, 2015
Complaint premature
PR-2015-016 Workplace Medical Corp. Decision made on July 3, 2015
Lack of jurisdiction
PR-2015-017 Simex Defence Inc. Decision made on July 7, 2015
No reasonable indication of breach
PR-2015-018 ATCO Structures & Logistics Decision made on July 15, 2015
Complaint premature
PR-2015-019 Adirondack Information Management Inc. Decision made on July 20, 2015
Complaint premature
PR-2015-020 Visiontec (2008) Limited Decision made on July 27, 2015
Late filing
PR-2015-021 Méridien Maritime Réparation Decision issued November 23, 2015
Complaint not valid
PR-2015-022 HeartZAP Services Inc. Decision made on July 28, 2015
Not a designated contract
PR-2015-023 MasterBedroom Inc. Decision made on August 14, 2015
No reasonable indication of a breach
PR-2015-024 MasterBedroom Inc. Decision made on August 26, 2015
No reasonable indication of a breach
PR-2015-025 ATCO Structures & Logistics Complaint withdrawn on September 17, 2015
PR-2015-026 Raytheon Canada Limited Decision issued January 19, 2016
Complaint not valid
PR-2015-027 Coastal Hydropower Corporation / Sawer-Douro Hydro LP Decision made on September 11, 2015
Late filing
PR-2015-028 Pacific Northwest Raptors Ltd. Complaint withdrawn on September 15, 2015
PR-2015-029 Workplace Medical Corp. Decision made on September 28, 2015
Not a designated contract
PR-2015-030 Iron Mountain Information Management Services Canada, Inc. Decision issued February 17, 2016
Complaint not valid
PR-2015-031 Eclipsys Solutions Inc. Decision made on October 19, 2015
Lack of jurisdiction
PR-2015-032 Eclipsys Solutions Inc. Decision made on October 26, 2015
Premature
PR-2015-033 Neopost Canada Limited Decision issued December 29, 2015
Complaint not valid
PR-2015-034 Strength Tek Fitness and Wellness Consulting Decision made on October 22, 2015
Not a designated contract
PR-2015-035 Talk Science to Me Communications Inc. Decision issued January 12, 2016
Complaint valid
PR-2015-036 eVision Inc. Decision made on November 6, 2015
No reasonable indication of a breach
PR-2015-037 Poulin Électrique Inc. Decision made on November 4, 2015
Lack of jurisdiction
PR-2015-038 Eclipsys Solutions Inc. Decision issued March 21, 2016
Complaint dismissed
PR-2015-039 Eclipsys Solutions Inc. Decision issued February 4, 2016
Complaint dismissed
PR-2015-040 MD Charlton Co. Ltd Decision made on November 20, 2015
Premature
PR-2015-041 Tektronix Canada Inc. Decision made on November 20, 2015
No reasonable indication of a breach
PR-2015-042 Oshkosh Defence Canada Incorporated Decision made on December 1, 2015
Premature
PR-2015-043 StenoTran Services Inc. and Atchison & Denman Court Reporting Services Ltd. Accepted for inquiry–In progress
PR-2015-044 Wheel Systems International, Inc. Decision made on December 15, 2015
No reasonable indication of a breach
PR-2015-045 J.K. Engineering Ltd. Decision made on December 15, 2015
Late filing
PR-2015-046 Grand and Toy Limited Decision made on December 15, 2015
Late filing
PR-2015-047 Madsen Power Systems Inc. Accepted for inquiry–In progress
PR-2015-048 Dominion Diving Ltd. Decision issued March 29, 2016
Complaint not valid
PR-2015-049 Venture Healthcare Inc. Decision made on December 30, 2015
No reasonable indication of a breach
PR-2015-050 Cornerstone Occupational Therapy Consultants Decision made on January 11, 2016
Not a designated contract
PR-2015-051 Oshkosh Defence Canada Incorporated Accepted for inquiry–In progress
PR-2015-052 MasterBedroom Inc. Decision made on January 12, 2016
Premature
PR-2015-053 ENVINT Consulting Complaint withdrawn on January 15, 2016
PR-2015-054 Toromont Cat Decision made on January 22, 2016
Late filing
PR-2015-055 Genesis Security Inc. Decision made on February 2, 2016
Late filing
PR-2015-056 Azimuth Consulting Group Partnership Decision made on February 1, 2016
No reasonable indication of a breach
PR-2015-057 Global Upholstery Co. Inc. Decision made on February 18, 2016
Premature
PR-2015-058 Jaura Enterprises Accepted for inquiry–In progress
PR-2015-059 Imperial Surgical Limited Decision made on February 24, 2016
No reasonable indication of a breach
PR-2015-060 HDT Expeditionary Systems, Inc. Accepted for inquiry–In progress
PR-2015-061 Ordre des traducteurs, terminologues et interprètes agréés du Québec Decision made on February 25, 2016
Not a potential supplier
PR-2015-062 Helicopter Transport Services (Canada) Inc. Decision made on February 29, 2016
No reasonable indication of a breach
PR-2015-063 Air Dynamics Co. Ltd. Decision made on March 11, 2016
Late filing
PR-2015-064 MasterBedroom Inc. Accepted for inquiry–In progress
PR-2015-065 Aero Support Canada Inc. Decision made on March 14, 2016
Late filing
PR-2015-066 Vanderbeken Enterprises Ltd. dba Drycake Decision made on March 9, 2016
Late filing
PR-2015-067 Oshkosh Defence Canada Incorporated Accepted for inquiry–In progress
PR-2015-068 Renown Industries Ltd. Decision made on March 21, 2016
No reasonable indication of a breach
PR-2015-069 Pico Envirotec Inc. Decision made on March 29, 2016
Premature
PR-2015-070 M.D. Charlton Co. Ltd. Under consideration

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-2014-022 Shaw Industries Inc. Shaw Industries Inc. A—393—14
Application discontinued
(April 2, 2015)
PR-2014-015 & PR-2014-020 CGI Information Systems and Management Consultants Inc. CGI Information Systems and Management Consultants Inc. A—498—14
Application dismissed
(November 30, 2015)
PR-2014-030 4Plan Consulting Corp. Attorney General of Canada A—136—15
Application dismissed
(January 26, 2016)
PR-2014-067 Heddle Marine Services Inc. Heddle Marine Services Inc. A-236-15
In progress
PR-2014-053 Monroe Solutions Group Inc. Monroe Solutions Group Inc. A-321-15
In progress
PR-2014-054 & PR-2014-056 Monroe Solutions Group Inc. Monroe Solutions Group Inc. A-323-15
In progress
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.