J.K. ENGINEERING LTD.

J.K. ENGINEERING LTD.
File No. PR-2015-045

Decision made
Tuesday, December 15, 2015

Decision issued
Wednesday, December 16, 2015

Reasons issued
Wednesday, December 23, 2015

TABLE OF CONTENTS

 

IN THE MATTER OF a complaint filed pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C., 1985, c. 47 (4th Supp.).

BY

J.K. ENGINEERING LTD.

AGAINST

THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES

DECISION

Pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal has decided not to conduct an inquiry into the complaint.

Rose Ritcey
Rose Ritcey
Presiding Member

The statement of reasons will be issued at a later date.

STATEMENT OF REASONS

  1. Subsection 30.11(1) of the Canadian International Trade Tribunal Act[1] provides that, subject to the Canadian International Trade Tribunal Procurement Inquiry Regulations,[2] a potential supplier may file a complaint with the Canadian International Trade Tribunal (the Tribunal) concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint. Subsection 30.13(1) of the CITT Act provides that, subject to the Regulations, after the Tribunal determines that a complaint complies with subsection 30.11(2) of the CITT Act, it shall decide whether to conduct an inquiry into the complaint.

SUMMARY

  1. The complaint relates to a Request for Proposal (RFP) (Solicitation No. W8476-155286/B) by the Department of Public Works and Government Services (PWGSC), on behalf of the Department of National Defence, for the provision of a mobile waste water treatment plant.
  2. J.K. Engineering Ltd. (J.K. Engineering) alleged that PWGSC unfairly disqualified its bid on the basis of an irrelevant and non-essential technical evaluation requirement in the RFP. In addition, it submitted that the evaluation criteria were specifically designed in favour of a pre-selected supplier (i.e. the winning bidder) and were applied in a manner that seriously restricted the competitive procurement process. As a remedy, J.K. Engineering requested that it be awarded the contract or, alternatively, compensated for the loss of the contract.

BACKGROUND

  1. The solicitation was issued on September 11, 2015, and the solicitation period closed on October 28, 2015.[3]
  2. J.K. Engineering submitted a bid within the solicitation period.
  3. On November 18, 2015, PWGSC notified J.K. Engineering that the evaluation team had found that its bid did not comply with one of the mandatory technical requirements of the RFP. PWGSC asked J.K. Engineering to clarify whether certain information in relation to that requirement had been provided in its bid, in case it had been overlooked in the evaluation process.
  4. On November 18 and 19, 2015, J.K. Engineering replied to PWGSC that its bid had included information related to the requirement in question, but it also provided additional information that had not been included in its bid.
  5. On November 19, 2015, PWGSC informed J.K. Engineering that it could not accept additional information, as it was only seeking to clarify whether the information had been included in the bid.
  6. On December 2, 2015, PWGSC notified J.K. Engineering that its bid was found non-responsive to the mandatory requirements of the solicitation and that the contract had been awarded to another bidder.
  7. On December 3, 2015, J.K. Engineering requested from PWGSC a copy of the successful bid and a list of all other bidders with their bid prices and technical bid evaluation results. PWGSC denied the request, on the basis that such information is protected, and indicated that the only way that it could be released is through a request under the Access to Information Act.[4] The next day J.K. Engineering submitted such a request.
  8. On December 7, 2015, PWGSC disclosed to J.K. Engineering a list of all other bidders for this solicitation, in no particular order, and the total evaluated price of the successful bidder.[5] It indicated that all other details would need to be obtained pursuant to the AIA.
  9. On December 8, 2015, J.K. Engineering filed a complaint with the Tribunal.[6]

ANALYSIS

  1. On December 15, 2015, pursuant to subsection 30.13(1) of the CITT Act, the Tribunal decided not to conduct an inquiry into this complaint. The reasons for that decision are as follows.
  2. Pursuant to sections 6 and 7 of the Regulations, the Tribunal may conduct an inquiry if the following four conditions are met:
  • the complaint has been filed within the time limits prescribed by section 6;[7]
  • the complainant is an actual or potential supplier;[8]
  • the complaint is in respect of a designated contract;[9] and
  • the information provided discloses a reasonable indication that the government institution did not conduct the procurement in accordance with the applicable trade agreements.[10]
  1. J.K. Engineering’s complaint meets the second and third conditions. With respect to the first condition, it is not entirely clear whether the complaint was filed within the prescribed time limits. However, for the reasons discussed below, J.K. Engineering’s complaint does not meet the fourth condition, as it does not disclose a reasonable indication that PWGSC failed to conduct the procurement in accordance with the applicable trade agreements. As such, even if the Tribunal were to accept that the prescribed time limits have been met, it will not conduct an inquiry into this complaint.

Time Limit for Filing the Complaint

  1. Subsection 6(1) of the Regulations provides that a complaint shall be filed with the Tribunal “. . . not later than 10 working days after the day on which the basis of the complaint became known or reasonably should have become known to the potential supplier.” Subsection 6(2) states that “[a] potential supplier who has made an objection . . . to the relevant government institution, and is denied relief by that government institution, may file a complaint with the Tribunal within 10 working days after the day on which the potential supplier has actual or constructive knowledge of the denial of relief, if the objection was made within 10 working days after the day on which its basis became known or reasonably should have become known to the potential supplier” [emphasis added].
  2. In other words, a complainant has 10 working days from the date on which it first becomes aware, or reasonably should have become aware, of its ground of complaint to either object to the government institution or to file a complaint with the Tribunal. If a complainant objects to the government institution within the designated time, the complainant may file a complaint with the Tribunal within 10 working days after it has actual or constructive knowledge of the denial of relief by the government institution.
  3. In procurement matters, time is of the essence and potential suppliers are required not to wait for the award of a contract before filing complaints that they may have with respect to a solicitation process. Rather, they must challenge problems as soon as they become aware or reasonably should have become aware of them in order to ensure that their complaints are submitted to the Tribunal in a timely manner.[11]
  4. In the present case, J.K. Engineering alleged that a mandatory technical requirement in the RFP was irrelevant and non-essential to the technical and performance requirements of the contract. It argued that the application of this particular requirement seriously restricted competition in the solicitation process and resulted in the unfair rejection of its bid. However, it should have raised its concerns at the earliest opportunity during the solicitation process (for example, when it obtained a copy of the RFP) instead of waiting until after its bid was found non-compliant.
  5. At the latest, J.K. Engineering knew or ought to have known the ground of its complaint as of November 18, 2015, since, as noted above, PWGSC notified J.K. Engineering on that date that its bid had been found non-compliant with the mandatory technical requirement in question.[12]
  6. J.K. Engineering claimed that it made an objection by e-mail to PWGSC on December 2, 2015[13] after it was informed that the contract had been awarded to another company. An objection made on this date would have fallen within 10 working days from the last possible date that J.K. Engineering knew or ought to have known the basis of its complaint regarding the necessity and relevance of the mandatory technical requirement (i.e. November 18, 2015).
  7. However, the evidence filed with the complaint does not show that, in any event, J.K. Engineering made an objection to PWGSC. As indicated above, J.K. Engineering wrote to PWGSC, after the award of contract to request information regarding the successful bidder and other bidders for this solicitation and then filed a request under the AIA.
  8. While there is no “one size fits all approach” to the form or content of an objection notice[14] and each case must be reviewed on its own facts, there is nonetheless a requirement that an objection be made. It is up to the Tribunal to determine whether the form and content of the objection is sufficient. On the basis of the facts of this matter, the Tribunal finds that none of J.K. Engineering’s correspondence with PWGSC mentioned its concerns regarding the necessity or relevance of the mandatory technical requirement that its bid had failed to meet.
  9. Although J.K. Engineering knew or ought to have known its ground of complaint by November 18, 2015, at the latest, it waited until December 8, 2015, to file a complaint with the Tribunal.
  10. Therefore, the Tribunal finds that J.K. Engineering did not make an objection to PWGSC or file a complaint with the Tribunal in relation to this ground of complaint within the time limits set out in section 6 of the Regulations.[15]
  11. Even if the Tribunal were to accept that J.K. Engineering made an objection to PWGSC on December 2, 2015, for the reasons discussed below, it does not disclose a reasonable indication that PWGSC failed to conduct the procurement in accordance with the applicable trade agreements.
  12. J.K. Engineering’s other ground of complaint is that the technical evaluation criteria were designed in favour of a pre-selected supplier, which was the winning bidder. The Tribunal finds that this allegation relates to information that may have only become known to J.K. Engineering when it was notified of the contract award (i.e. December 2, 2015). Although this ground of complaint may be considered timely, the information provided did not disclose a reasonable indication of a breach, as discussed below.

No Reasonable Indication of a Breach

  1. The solicitation at issue is covered by all the relevant trade agreements set out in section 11 of the Regulations, including the Agreement on Internal Trade,[16] the North American Free Trade Agreement[17] and the Agreement on Government Procurement.[18]
  2. The applicable trade agreements require that a procuring entity 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, further, awarding the contract. For instance, Article 1013(1) of NAFTA provides as follows: “Where an entity provides tender documentation to suppliers, the documentation shall contain all information necessary to permit suppliers to submit responsive tenders . . . . The documentation shall also include: . . . (h) the criteria for awarding the contract, including any factors other than price that are to be considered in the evaluation of tenders . . . .”
  3. The trade agreements also stipulate that, to be considered for contract award, a tender must conform to the essential requirements set out in the tender documentation and require that procuring entities award contracts in accordance with the criteria and essential requirements specified in the tender documentation. For instance, Articles 1015(4)(a) and (d) of NAFTA provide as follows: “An entity shall award contracts in accordance with the following: (a) to be considered for award, a tender must, at the time of opening, conform to the essential requirements of the notices or tender documentation . . . (d) awards shall be made in accordance with the criteria and essential requirements specified in the tender documentation . . . .”
  4. It is well established in Tribunal jurisprudence that it is a bidder’s responsibility to ensure that its proposal is compliant with all essential elements of a solicitation.[19] For its part, the government institution must ensure that the bid under evaluation thoroughly and strictly complies with the mandatory requirements identified in the tender documents.[20]
  5. In conducting procurement inquiries, the Tribunal will not substitute its judgment for that of the evaluators unless the evaluators have not applied themselves in evaluating a bidder’s proposal, have ignored vital information provided in a bid, have unreasonably interpreted the scope of a requirement, have based their evaluation on undisclosed criteria or have otherwise not conducted the evaluation in a procedurally fair way.[21]
  6. The RFP at issue clearly indicated that bids must comply with the requirements of the bid solicitation and meet all mandatory technical evaluation criteria to be declared responsive.[22] In order to be recommended for award of a contract, a bid must be responsive and have the lowest evaluated price on an aggregate basis.[23] Bidders were also required to provide documentation demonstrating compliance with the requirements of the bid solicitation.[24]
  7. The mandatory requirements of the RFP included the following technical criterion at Annex C:

2.1.1 The bidder must:

. . . 

c) Demonstrate a history of directly related experience in the design/manufacture of at least one (1) [mobile waste water treatment plant] with a minimum of 10 m3 per day of waste water capacity integrated in one (1) CSC certified 20 foot ISO container in the last five (5) years from the date of bid closing. The year when the system was completed must be provided.

  1. The evaluation team found that J.K. Engineering’s bid failed to demonstrate compliance with the criterion 2.1.1(c) of Annex C to the RFP. J.K. Engineering has not disputed this finding. Its position is rather that the demonstration of such past experience was irrelevant and non-essential to the performance of the contract. Specifically, in the complaint, it stated that the criterion was “. . . not relevant to the technical and performance requirements of the procurement specifications since the container is only a housing for the [mobile waste water treatment plant] and our bid clearly demonstrates how our proposed [mobile waste water treatment plant] will be integrated in the container required.”[25]
  2. The Tribunal finds that it was clear from the solicitation documents that the scope of criterion 2.1.1(c) of Annex C to the RFP was mandatory. As indicated above, if J.K. Engineering disagreed with the mandatory nature of that requirement, then it should have raised its concerns with PWGSC in a timely manner, i.e. prior to bid closing. This was not done; therefore, the mandatory requirement remained in effect. It was thus incumbent upon J.K. Engineering to exercise due diligence in the preparation of its bid to make sure that it was compliant with all essential elements of the RFP.[26]
  3. The Tribunal has previously held that a government institution is entitled to define and meet its reasonable and legitimate operational requirements, as long as the procurement is not structured to favour any particular potential supplier.[27] Here, J.K. Engineering further alleged that its bid was rejected on criteria specifically designed to favour a pre-selected supplier.
  4. The claim that the solicitation process was unfair in that the selection criteria were designed to favour a particular potential supplier is a serious allegation of discriminatory treatment. To support its claim, J.K. Engineering referred to two previous solicitations (one in 1998 and the other in 2013) for similar waste water treatment systems where its bid was allegedly rejected on similar grounds and the contracts were awarded to pre-selected suppliers.[28] However, the Tribunal is unable to draw any conclusion from these unsubstantiated allegations other than to note that, in that case, it would have been reasonable to expect J.K. Engineering to be on alert for the inclusion of this mandatory requirement in the solicitation at issue and prepared to make its objection to PWGSC or complain to the Tribunal without delay, i.e. prior to bid closing, instead of waiting to challenge the mandatory scope of the requirement.
  5. The Tribunal finds that the complaint lacked specific information or evidence to support the allegation that the contract was designed to favour and awarded to a pre-selected supplier. For example, J.K. Engineering provided no explanation of how technical criterion 2.1.1(c) of Annex C to the RFP was designed to favour the winning bidder in this solicitation.
  6. In light of the above, the Tribunal finds that the complaint does not disclose a reasonable indication that PWGSC did not conduct the procurement in accordance with the relevant trade agreements.

DECISION

  1. Pursuant to subsection 30.13(1) of the CITT Act, the Tribunal has decided not to conduct an inquiry into the complaint.
 

[1].      R.S.C., 1985, c. 47 (4th Supp.) [CITT Act].

[2].      S.O.R./93-602 [Regulations].

[3].      Amendment No. 002 of the RFP extended the solicitation closing date from October 26 to October 28, 2015.

[4].      R.S.C., 1985, c. A-1 [AIA].

[5].      The amount is greater than the amount indicated by PWGSC in its December 2, 2015, e-mail to J.K. Engineering. PWGSC subsequently described the latter as being “for the firm quantity only”.

[6].      On December 8, 2015, J.K. Engineering was unable to complete the e-filing of its complaint due to a known technical issue with the Tribunal’s server. As a result, J.K. Engineering had to re-submit its complaint on December 10, 2015. The Tribunal acknowledged the complaint as if it had been filed on December 8, 2015.

[7].      Subsection 6(1) of the Regulations.

[8].      Paragraph 7(1)(a) of the Regulations.

[9].      Paragraph 7(1)(b) of the Regulations.

[10].    Paragraph 7(1)(c) of the Regulations.

[11].    Sani Sport (10 March 2015), PR-014-064 (CITT) at para. 29 [Sani Sport]; Teledyne Webb Research, a business unit of Teledyne Benthos, Inc. (20 October 2011), PR-2011-038 (CITT) at para. 17; The Corporate Research Group Ltd., operating as CRG Consulting (26 January 2010), PR-2009-075 (CITT) at para. 24; IBM Canada Ltd. v. Hewlett Packard (Canada) Ltd., 2002 FCA 284 (CanLII).

[12].    The rejection notice from PWGSC dated December 2, 2015, stated that J.K. Engineering’s bid was found non‑responsive to the mandatory requirements of the solicitation, without listing them specifically. J.K. Engineering inferred the requirement that its bid had failed to meet on the basis of PWGSC’s earlier e-mail of November 18, 2015. However, the Tribunal is of the view that it would have been preferable, and more transparent, if PWGSC’s rejection letter had specifically identified the mandatory requirements that were not met by J.K. Engineering’s bid.

[13].    In fact, as noted above, the evidence attached with the complaint shows that J.K. Engineering sent an e-mail to PWGSC on December 3, 2015. If this was the date on which an e-mail was first sent, then it would not have fallen with the 10-working-day time limit for making an objection.

[14].    Sani Sport at para. 26; CGI Information Systems and Management Consultants Inc. v. Canada Post Corporation and Innovapost Inc. (14 October 2014), PR-2014-016 and PR-2014-021 (CITT) at para. 63.

[15].    Furthermore, the request for access to information cannot somehow serve to keep J.K. Engineering’s complaint alive; it is an independent process with no bearing on the time limits for making an objection to PWGSC or filing a complaint with the Tribunal.

[16].    18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/agreement-on-internal-trade/>.

[17].    North American Free Trade Agreement between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America, 17 December 1992, 1994 Can. T.S. No. 2, online: Department of Foreign Affairs, Trade and Development <http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-... (entered into force 1 January 1994) [NAFTA].

[18].    Revised Agreement on Government Procurement, online: World Trade Organization <http://www.wto.org/‌english/docs_e/legal_e/rev-gpr-94_01_e.htm> (entered into force 6 April 2014).

[19].    Unisource Technology Inc. (13 December 2013), PR-2013-027 (CITT) at para. 16; Thomson-CSF Systems Canada Inc. (12 October 2000), PR-2000-010 (CITT); Canadian Helicopters Limited (19 February 2001), PR‑2000-040 (CITT); WorkLogic Corporation (12 June 2003), PR-2002-057 (CITT).

[20].    Siemens Westinghouse Inc. v. Canada (Minister of Public Works and Government Services), 2000 CanLII 15611 (FCA).

[21].    Excel Human Resources Inc. (operating as excelITR) v. Department of Public Works and Government Services (25 August 2006), PR-2005-058 (CITT) at para. 30; Northern Lights Aerobatic Team, Inc. v. Department of Public Works and Government Services (7 September 2005), PR-2005-004 (CITT) at para. 51; Marcomm Inc. (11 February 2004), PR-2003-051 (CITT) at para. 10.

[22].    RFP, Section III, Articles 4.1.1.1 and 4.2; RFP, Annex “C”, Articles 1.3 and 2.

[23].    RFP, Section III, Article 4.2.

[24].    RFP, Section III, Article 4.1.1.1. In addition, the Standard Instructions incorporated by reference into the RFP specified that Canada would only evaluate the documentation provided with a bidder’s bid. See 2003 (2015‑07‑03) Standard Instructions – Goods or Services – Competitive Requirements, subsection 5(7).

[25].    Complaint, section 5.A.

[26].    Excel Human Resources Inc. v. Department of the Environment (2 March 2012), PR-2011-043 (CITT) at para. 34; Integrated Procurement Technologies, Inc. (14 April 2008), PR-2008-007 (CITT) at para. 13.

[27].    Agri-SX Inc. (27 March 2013), PR-2012-051 (CITT) at paras. 26-29; 723186 Alberta Ltd. (12 September 2011), PR-2011-028 (CITT) at paras. 19-21.

[28].    Complaint, section 5.F.

Case Number(s)

PR-2015-045

Attachment(s)

pr2p045_e.pdf (91.11 KB)

Status

Publication Date

Tuesday, January 12, 2016

Modification Date

Tuesday, January 12, 2016