Canadian International Trade Tribunal
www.citt-tcce.gc.ca
Common menu bar links
Procurement
Determinations
File No.: PR-2000-028
Download full document in MS Word format, compressed - zip (12K) through FTP
Download full document in Adobe Acrobat format (104K) through FTP
Download full document in MS Word format, compressed - zip (12K) through HTTP
Download full document in Adobe Acrobat format (104K) through HTTP
Ottawa, Wednesday, November 1, 2000
File No.: PR-2000-028
IN THE MATTER OF a complaint filed by Global Upholstery Co. Inc. under subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C. 1985 (4th Supp.), c. 47;
AND IN THE MATTER OF a decision to conduct an inquiry into the complaint under subsection 30.13(1) of the Canadian International Trade Tribunal Act.
DETERMINATION OF THE TRIBUNAL
Pursuant to section 30.14 of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal determines that the complaint is not valid.
Richard Lafontaine
Richard Lafontaine
Presiding Member
Michel P. Granger
Michel P. Granger
Secretary
|
Date of Determination: |
November 1, 2000 |
|
Tribunal Member: |
Richard Lafontaine, Presiding Member |
|
Investigation Manager: |
Randolph W. Heggart |
|
Investigation Officer: |
Paule Couët |
|
Counsel for the Tribunal: |
John Dodsworth |
|
Complainant: |
Global Upholstery Co. Inc. |
|
Government Institution: |
Department of Public Works and Government Services |
|
Counsel for the Government Institution: |
David M. Attwater |
STATEMENT OF REASONS
On August 3, 2000, Global Upholstery Co. Inc. (Global) filed a complaint with the Canadian International Trade Tribunal (the Tribunal) under subsection 30.11(1) of the Canadian International Trade Tribunal Act 1 concerning the procurement (Solicitation No. 19150-00T120/B) by the Department of Public Works and Government Services (the Department) for the supply and installation of free-standing desk product components for the Department of Justice.
Global alleged that, in conducting this procurement, the Department made "technical compromises" to accommodate other potential suppliers, while no allowance was made to accommodate its bid with respect to the non-specific mandatory delivery date set out in the Request for Proposal (RFP).
Global requested, as a remedy, that the Tribunal order the suspension of the current solicitation and that the procurement be reissued to allow for longer delivery lead times. In the alternative, considering that Global was the only technically compliant bidder in the original solicitation (Solicitation No. 19150-00T120/A), it requested that negotiations be conducted to accommodate currently unspecified operational dates of the Department of Justice.
On August 9, 2000, the Tribunal informed the parties that the complaint had been accepted for inquiry, as it met the requirements of subsection 30.11(2) of the CITT Act and the conditions set out in section 6 and subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations. 2 That same day, the Tribunal issued an order postponing the award of any contract in relation to this solicitation until the Tribunal determined the validity of the complaint. On August 11, 2000, the Department informed the Tribunal, in writing, that a contract in the amount of $532,929.94 (GST included) had been awarded on August 8, 2000, for the subject solicitation to Xception International Inc (Xception). Accordingly, on August 14, 2000, the Tribunal rescinded its postponement of award order of August 9, 2000. On September 5, 2000, the Department filed a Government Institution Report (GIR) with the Tribunal in accordance with rule 103 of the Canadian International Trade Tribunal Rules. 3 On September 14, 2000, Global filed comments on the GIR with the Tribunal.
Given that there was sufficient information on the record to determine the validity of the complaint, the Tribunal decided that a hearing was not required and disposed of the complaint on the basis of the information on the record.
PROCUREMENT PROCESS
On May 2, 2000, the Department received a requisition from the Department of Justice for the supply of "executive furniture" for 120 offices located at 130 King Street, Toronto, Ontario.
On May 30, 2000, a Notice of Proposed Procurement (NPP) for Solicitation No. 19150-00T120/A with a closing date of July 10, 2000, was published on Canada's Electronic Tendering Service (MERX). The NPP indicated that the procurement was subject to the Agreement on Internal Trade, 4 the North American Free Trade Agreement 5 and the Agreement on Government Procurement. 6
Section 1.8.1 of the RFP read as follows:
.1 It is requested that delivery commence within 8 weeks from date of award with installation to be completed within 2 weeks, however, it is mandatory that delivery commence within 10 weeks from date of award and be completed within 3 weeks.
Section 3.5 of the RFP read, in part, as follows:
.1 To be considered responsive bids must meet all of the mandatory requirements of this solicitation. Bids not meeting all of the mandatory requirements will be given no further consideration.
Section 3.5.5 of the RFP read, in part, as follows:
8. Commencement of delivery within 10 weeks from date of award, installation to be completed within 3 weeks of commencement - 1.8.1. Mandatory
The RFP was amended, in part, to clarify the wording of section 1.8.1 by Amendment No. 001 published on MERX on June 2, 2000, as follows:
Delete 1.8.1 in its entirety.
Insert the following:
1.8.1.1 It is requested that delivery commence within 8 weeks from date of award with installation to be completed within 2 weeks, however, it is mandatory that delivery commence within 10 weeks from date of award with installation to be completed within 3 weeks.
On June 7, 2000, Global addressed, by facsimile, several questions to the Department pertaining to specifics on the items of office furniture. No questions were raised relative to the mandatory delivery and installation dates.
Four bids were received in response to this solicitation. According to the GIR, one bid failed to offer office furniture on the Qualification Program List, as required by the RFP; Global failed to offer delivery within the mandatory period (the front page of Global's proposal, under "Delivery Offered - Livraison proposée", reads "15 Weeks For First Shipment - 3 Subsequent Weeks To Complete"); and two bids appeared to meet the requirements of the RFP. On July 11, 2000, the latter three bids were referred to the Industrial and Commercial Products Directorate of the Department for a detailed analysis.
As a result of the detailed analysis, all bids were declared non-compliant with the mandatory requirements of the RFP: Global for failing to commit to the mandatory delivery date and the other two bidders for not meeting some of the following requirements of the Specifications for the office furniture:
Section 4.8 of the Specifications requires that tops be a minimum of 1 3/16 in. thick. One bidder's product was 1 1/8 in. thick.
Section 4.10 of the Specifications requires an interior height of the hutch to be 12 1/2 in. One bidder's hutch had an interior height of 12 1/4 in.
Section 4.11 of the Specifications requires levelling glides with a minimum vertical adjustment of 1 3/4 in. One bidder offered levelling glides that allowed for only 1 in. of adjustment.
Section 4.12 of the Specifications requires the bookcase to be the same height as the credenza with hutch. One bidder offered a bookcase that was 1 9/16 in. higher than the credenza with hutch.
On July 25, 2000, the Department of Justice advised that "non-compliance with the Specifications was minor, and had no effect on the acceptability of the proposed products". It also advised that it wanted to retain the 10-week mandatory delivery time.
That same day, the Department advised the four bidders that no technically responsive bid had been received and that the requirement was being re-tendered under Solicitation No. 19150-00T120/B (the second solicitation). Bidders were advised that a "few minor changes" had been made to the Specifications (to accommodate the minor deviations listed above). Bidders had until 2:00 p.m., on July 28, 2000, to submit proposals.
On July 27, 2000, Global sent a facsimile to the Department objecting to the unspecified delivery and installation dates in the RFP. Having been informed by the Department that the facsimile could not be located, a second transmission was sent on July 28, 2000.
Four bidders responded to the revised solicitation, with one bidder submitting two proposals. Global's bid was found to be non-responsive for failing to meet the mandatory delivery and installation schedule of the RFP, and two bids were found to be fully responsive to the RFP. The bid with the lower overall price was identified for award.
On August 3, 2000, Global was advised that its bid had been found to be non-responsive. That same day, Global informed the contracting officer of its intention to file a complaint with the Tribunal. Global filed its complaint with the Tribunal on August 3, 2000. On August 8, 2000, the Department awarded a contract to Xception and, on August 9, 2000, the Tribunal informed the parties that Global's complaint had been accepted for inquiry.
POSITION OF PARTIES
Department's Position
With respect to Global's allegation that the evaluation criteria were not clearly specified in the RFP, in that the actual date of delivery of the office furniture was unspecified and based on an unspecified contract award date, the Department submitted that the RFP clearly required delivery and installation within a specified period of time, commencing with the occurrence of a specified event. The Department submitted that the actual dates of delivery and installation of the furniture are not significant under the RFP. Rather, what is significant are the dates on which delivery must commence and installation be completed after the award of the contract. The Department submitted that Global was aware of, and understood, these mandatory time limits.
Furthermore, the Department submitted that Global does not take issue with the time within which installation of the office furniture is required, but objected to the delivery time frame that cannot accommodate its "current delivery lead time" of 15 weeks. The Department submitted that, in establishing a delivery time for this requirement, it was entitled to consider the reasonable needs of the Department of Justice and, in this respect, the Department noted that to expect delivery to commence approximately two and one half months after contract award is not unreasonable. The Department submitted that, pursuant to Article 1012(4) of NAFTA and Article XI(4) of the AGP, it could establish a delivery date having regard to such factors as the time realistically required for production, de-stocking and transport of goods from the points of supply.
The Department submitted that the 10-week time period was a realistic time period and that, of all bidders, only Global indicated that it would not meet the mandatory delivery date, as stated in the original solicitation and in the second solicitation. The Department argued that the Crown need not structure its procurement of goods to accommodate the business decision of a potential supplier whose "current delivery lead time" is well beyond what is reasonably and normally required for production and delivery of those goods. Otherwise, the Department argued, the Crown would be held hostage to the business decisions of individual potential suppliers. The Department also added that it currently has 17 National Master Standing Offers (NMSOs) for free-standing furniture, five of which are for furniture of the type being procured under the RFP. In each of these NMSOs, the delivery time varies between four and eight weeks and, in an NMSO with Global, Global has offered delivery within six to eight weeks for similar furniture. Therefore, requiring delivery of the office furniture to commence within 10 weeks is a reasonable requirement.
The Department also submitted that, although Global was aware of the delivery time frame at the time of the issuance of the first solicitation, it did not object to the delivery time frame until after the issuance of the second solicitation, when it was too late for the Department to respond. Furthermore, the Department submitted that the adjustments made to the Specifications in the second solicitation were minor and did not benefit some potential suppliers to the detriment of others. There was no discrimination involved in the minor changes to the original Specifications introduced by the Department.
The Department requested its complaint costs.
Global's Position
Global submitted that the contracting officer knew very well about Global's position on the delivery issue at the time of the original solicitation. Furthermore, Global submitted that the delivery period set out in the RFP is based on a number of uncontrollable elements. Global submitted that the delivery time frames in the NMSOs referred to by the Department have no relevance to this case, as the requirement for the Department of Justice exceeds by more than 13 times the call-up limit set in the NMSO. Global argued that the production lead time is obviously longer for larger orders.
Global submitted that delivery is a matter of manufacturing capacity and load of orders at a certain time. There are no "industry standards". Some manufacturers may work at 60 percent capacity, when others, such as Global at this time, may be working at more than 100 percent capacity. Therefore, Global argued, delivery fluctuates with market activity and individual manufacturer market penetration.
Global submitted that, because the RFP allowed bidders (through clause A0006T of the Standard Acquisition Clauses and Conditions Manual [SACC Manual] incorporated into the RFP) to propose alternative means by which several technical, performance, time and other goals and objectives may be best met having regard to stated mandatory requirements, the Department should have paid more attention to the alternative delivery date that it proposed, i.e. a 15-week delivery schedule.
In essence, Global is of the view that the proposal that it submitted in response to the original solicitation was not adequately considered. Considering that a contract has already been awarded in this instance, Global requested to be compensated for its complaint costs and all income lost.
TRIBUNAL'S DECISION
Section 30.14 of the CITT Act requires that, in conducting an inquiry, the Tribunal limit its consideration to the subject matter of the complaint. Furthermore, at the conclusion of the inquiry, the Tribunal must determine whether the complaint is valid on the basis of whether the procedures and other requirements prescribed in respect of the designated contract have been observed. Section 11 of the Regulations further provides, in part, that the Tribunal is required to determine whether the procurement was conducted in accordance with the provisions of the applicable trade agreements.
Article 1015(4)(a)of NAFTA provides that "to be considered for award, a tender must, at the time of opening, conform to the essential requirements of the notices or tender documentation and have been submitted by a supplier that complies with the conditions of participation". Article 506(6) of the AIT provides, in part, that the tender documents shall clearly identify the requirements of the procurement. In addition, Article 1012(4) of NAFTA provides that "[a]n entity shall, in establishing a delivery date for goods or services and consistent with its own reasonable needs, take into account such factors as the complexity of the procurement, the extent of subcontracting anticipated and the time realistically required for production, destocking and transport of goods from the points of supply". Article XI of the AGP provides likewise.
In the Tribunal's opinion, there are two questions at issue: whether the delivery time frame set out in the RFP was reasonable and whether the Department discriminated against Global.
The Tribunal finds that the RFP clearly indicates that the delivery and installation time frame was a mandatory requirement and that, according to the RFP, bidders not meeting all the mandatory requirements would not be considered further. This is not in dispute.
In respect of the reasonableness of the time frame set out in the RFP, the Tribunal agrees with the Department's position that actual dates by which delivery must commence and installation be completed can be calculated once the contract award is made. It follows then that it was not necessary to establish a specific date, i.e. day of the month, until after contract award. Delivery of all the office furniture was not required within 10 weeks, rather the delivery had to start within 10 weeks.
The Tribunal finds that a 10-week period for the commencement of the delivery was not unreasonable. The Department is entitled to take into consideration the reasonable needs of the client department. The Tribunal notes that the Department of Justice itself did not agree to change the time period for the delivery. With respect to the "industry standards" of six to eight weeks for delivery of office furniture referred to by the Department, the Tribunal agrees with the argument made by Global that the performance of a large contract may take longer than a smaller one. However, the Tribunal believes that "industry standards" are the backdrop upon which one can judge the reasonableness of the time period used by the Department and that adding two weeks to those "industry standards" is not unreasonable. The Tribunal also notes that Global's bid was the only one that did not meet the mandatory 10-week time frame for the commencement of the delivery of the furniture.
As far as the submission by Global that the Department should have considered its proposed delivery schedule as "an alternative means by which . . . time and other goals may be best met, having regard to stated mandatory requirements" as referenced by clause A0006T of the SACC Manual, the Tribunal finds that this clause offers no discretion to the Department when evaluating a mandatory requirement. In this case, the time period for delivery and installation was clearly defined as a mandatory requirement.
Article 1008 of NAFTA provides, in part, that the tendering procedures of its entities are applied in a non-discriminatory manner. The technical specifications set out in the RFP applied equally to all bidders, including Global. Similarly, all bidders faced the same requirement in terms of the time frame for delivery. With respect to the submission made by Global that the Department modified the technical specifications to accommodate some potential suppliers, the Tribunal finds that this ground is not valid. The Tribunal believes that the changes made to the technical specifications were minor and did not affect the acceptability or nature of the goods being procured. In addition, the Department of Justice agreed to these changes. However, it did not agree to change the 10-week delivery time period.
DETERMINATION OF THE TRIBUNAL
In light of the foregoing, the Tribunal determines that the procurement was conducted in accordance with the requirements of the AIT and that, therefore, the complaint is not valid.
1 . R.S.C. 1985 (4th Supp.), c. 47 [hereinafter CITT Act].
2 . S.O.R./93-602 [hereinafter Regulations].
3 . S.O.R./91-499.
4 . As signed at Ottawa, Ontario, on July 18, 1994 [hereinafter AIT].
5 . 32 I.L.M. 289 (entered into force 1 January 1994) [hereinafter NAFTA].
6 . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm> [hereinafter AGP].
[Table of Contents]
Initial publication: October 31, 2000
