Chapter 4 - 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 the CCOFTA may file a complaint with the Tribunal. The relevant provisions of the CITT 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 and circumstances of the case.

Procurement Complaints

In 2012-2013, the Department of Public Works and Government Services (PWGSC) issued approximately 11,503 contracts valued at between $25,000 and $2 billion each, for a total value of $7 billion. The 53 complaints that the Tribunal received in the fiscal year pertained to 50 different contracts with a collective value of over $350 million.

Summary of Selected Determinations

During the fiscal year, the Tribunal issued 52 decisions on whether to accept complaints for inquiry, which included one decision to inquire that was made in a matter received in the previous fiscal year, and 12 final decisions on complaints that were accepted for inquiry, for a total of 64 decisions. Two cases were still in progress at the end of the fiscal year.

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-2012-006—Secure Computing LLC

This complaint was filed by Secure Computing LLC (Secure Computing) concerning a procurement by PWGSC on behalf of the Department of National Defence (DND) for the provision of networking equipment. Secure Computing alleged that DND accepted products that were not compliant with the requirements of the solicitation.

PWGSC conceded that the units delivered by the winning bidder, Conexsys Communications Ltd. (Conexsys), did not meet the requirements. However, PWGSC submitted that, as the allegations contained in the complaint related to matters that fall under contract administration, an area which is beyond the Tribunal’s jurisdiction, and given that PWGSC had advised the Tribunal that it intended to enforce the terms of the contract and require Conexsys to deliver compliant products that meet all the requirements of the solicitation documents and of the contract, the Tribunal ought to dismiss this complaint.

The Tribunal found that PWGSC had evaluated Conexsys’ proposal, as it was submitted at the time of bid closing, in accordance with the terms of the solicitation documents. Accordingly, the decision to award the contract to Conexsys was reasonable because, on its face, Conexsys’ proposal was fully compliant with the technical requirements of the solicitation. The Tribunal was satisfied that PWGSC took the necessary steps to enforce the contract that was awarded to Conexsys and that this matter had to be treated as one of contract administration or contract performance over which the Tribunal does not have jurisdiction. Finally, the Tribunal did not accept Secure Computing’s argument that PWGSC’s actions in this matter improperly permitted Conexsys to repair its initial bid. Bid repair is a term used to describe the improper alteration or modification of a bid either by the bidder or by the procuring entity after the deadline for the receipt of bids has passed. In this case, there was no such alteration or modification of Conexsys’ bid. Therefore, the Tribunal determined that the complaint was not valid.

PR-2012-007—Sunny Jaura d.b.a. Jaura Enterprises

Sunny Jaura d.b.a. Jaura Enterprises (Jaura) filed a complaint concerning a procurement by PWGSC on behalf of DND for the provision of temporary housing accommodation services in Mesa, Arizona. According to Jaura, PWGSC and DND improperly determined that its proposal was non compliant with two mandatory technical requirements in the solicitation. After the Tribunal accepted the complaint for inquiry, PWGSC filed evidence that the estimated value of the contract was below the monetary thresholds specified in the trade agreements.

In this case, the Tribunal considered whether DND selected a valuation method with the intention of avoiding the obligations of the trade agreements. Although the value of the contract awarded to the winning bidder, Oakwood Temporary Housing, and the total amount of Jaura’s bid were both greater than the value of the contract as estimated by DND, this could have been attributable to the fact that PWGSC only received proposals from two bidders. In the end, the Tribunal was satisfied that the estimated value of the contract was not unreasonable. As the estimated value of the contract was below the monetary thresholds specified in the applicable trade agreements, the Tribunal found that the complaint did not relate to a “designated contract”. Accordingly, the Tribunal was without jurisdiction to conduct an inquiry, and the complaint was dismissed.

PR-2012-014—Weir Canada Inc.

Weir Canada Inc. (Weir) filed a complaint concerning a procurement by PWGSC on behalf of DND for the repair, overhaul and testing of a variety of pump assemblies or subassemblies used in various fluid systems on board DND ships. Weir alleged that PWGSC failed to conduct a fair and unbiased procurement process because the Request for Proposal (RFP) contained certain requirements that were unjustifiably biased in favour of particular Original Equipment Manufacturer (OEM) goods and OEM bidders, with the effect of excluding Weir’s bid. Specifically, Weir alleged that the following requirements under the RFP were unjustifiably biased in favour of OEM goods and OEM bidders: certification of the supply of OEM parts (Requirement No. 1); and the bidder must be an OEM or under a contract pertaining to technical data and repair/overhaul specifications with an OEM (Requirement No. 2).

The Tribunal found that a proper interpretation of section 6 of the CITT Procurement Inquiry Regulations that a complainant’s assumption regarding its ability to meet requirements which it finds objectionable was irrelevant. Once a complainant knows or ought to know the basis of its complaint, it should take action. Therefore, Weir should have reasonably objected or filed a complaint within 10 working days of May 31, 2012, the day on which the RFP was issued, and should not have waited to see if its subcontractor OEM, Curtiss-Wright, would agree to support its bid.

In any event, even if section 6 of the CITT Procurement Inquiry Regulations could be construed such that the relevant time line was when Weir knew that it could not meet the requirements of the RFP which it found objectionable, then Weir reasonably ought to have objected to PWGSC or filed a complaint with the Tribunal within 10 working days of July 6, 2012, when Curtiss-Wright responded to Weir that it would not be able to support its bid. That would make the objection to Requirement No. 2 late, considering that it was not made until August 22, 2012, and the complaint was not filed until September 4, 2012. Similarly, even though the objection with respect to Requirement No. 1 would have been timely, having been made on July 17, 2012, it was nonetheless late because there was a clear denial of relief to this objection on August 9, 2012, when PWGSC issued amendment No. 006, but the complaint was not filed until September 4, 2012. Therefore, the complaint was late on both grounds, and the Tribunal decided not to conduct an inquiry.

Judicial Review of Procurement Decisions