1. Overall organization of the project
Before the closing date for the receipt of proposals, the
Department issued three bid updates. Two of these updates contained
answers in response to questions posed, in writing, by the
complainant before bid closing, and one was to advise of a change
in address for the Department’s Calgary office. In addition to the
updates that were sent to all potential bidders, the Department
sent letters of response directly to the complainant.
Three proposals were received. The contracting officer did an
initial evaluation of the mandatory criteria. As a result of this
evaluation, it was determined that one proposal was not compliant
and, therefore, would receive no further consideration. Two
proposals, that of the complainant and that of the contract
awardee, were found to be compliant with the mandatory criteria.
The technical and management portions of these proposals were sent
to DND, along with a covering memorandum.
An evaluation of the proposals with respect to the rated
criteria contained in the RFP was conducted by DND personnel. DND
forwarded a covering memorandum dated January 12, 1996, to the
Department, along with a proposal evaluation summary and
consolidation of remarks for each proposal. After receiving the
summary from DND, the contracting officer completed an evaluation
of the two proposals with respect to the rated criteria. On January
29, 1996, in order to reconcile differences between the proposal
evaluation summary of the DND evaluation committee and the
evaluation conducted by the contracting officer, the contracting
officer and the Staff Officer - Cadet Training and Support at DND
conducted, by telephone, a consensus scoring of the proposals. As a
result of this evaluation, it was determined that the complainant’s
bid did not achieve the required minimum mark of 75 for rated
requirements and, therefore, only the contract awardee was
qualified to be awarded the contract.
On February 9, 1996, the contract was awarded to Pacific Granite
Mountaineering Inc. The complainant was notified of the contract
award on February 12, 1996. On February 19, 1996, the Department
provided a debriefing to the complainant and followed up the
meeting with a memorandum. The complainant filed a complaint with
the Tribunal on March 8, 1996.
The complainant addresses certain concerns that relate to
process. These are identified as ongoing contact and a personal
relationship between the contract awardee and the technical
evaluation committee in Winnipeg, Manitoba, during the bidding
process and the divulgence of information to the contract awardee
by DND prior to the bid closing date.
The complainant alleges that the evaluation of proposals was
flawed in the assessment of both mandatory requirements and rated
criteria. With respect to the mandatory requirements, the
complainant takes issue with: (1) the acceptance of the contract
awardee’s evidence that the necessary authorities will issue it a
Banff business licence; (2) the need for an Assiniboine Provincial
Park licence when its bid does not include the use of this park;
and (3) the assessment of the contract awardee’s proposal as
meeting the requirement to “[p]rovide sufficient instructors to
meet the minimum instructor/student ratio acceptable industry wide
standard.”
The complainant takes issue with the marks that its proposal
received in the assessment of rated criteria and with various
remarks reported in the evaluation summary disclosed. With respect
to the assessment of the technical proposal, the complainant
believes that the mark that it received does not properly reflect
the worth of that part of its proposal. The committee, by making
remarks such as “too much discussion about perceived shortcomings
of previous contractor” and “spends a lot of time discussing staff
program, what about cadet program,” shows a lack of
understanding of its proposal. With respect to the assessment of
personnel, the complainant emphasizes the concern relating to
résumés being submitted that have not been authorized by the
individuals concerned. The complainant notes that the committee’s
comments regarding résumés that it had submitted as not clearly
indicating first aid and CPR qualifications are evidence of the
importance of the staff proposed. It also indicates that the
committee’s comments relating to the availability of staff indicate
the importance of supplying the staff proposed. As such, it feels
that the use of résumés without consent should result in a
declaration of a bid being non-responsive. With respect to the
assessment of related experience, the complainant feels that its
score is not consistent with the remark from the previous section:
“large support system utilizing HRI resources [and] supporting
management infrastructure.”
In its comments on the GIR, the complainant reiterates its
concern with the contact between the contract awardee and DND
personnel, in light of its interpretation of the enquiries clause
of the RFP. The composition of the evaluation committee is
questioned and the participation of the Staff Officer - Cadet
Training and Support at DND in any aspect of the procurement is
viewed by the complainant as favouring the contract awardee. The
complainant questions the ability of the contract awardee to bid a
price that is close to the actual budget figure and attributes this
fact as evidence that information has been unfairly passed between
DND and the contract awardee. The complainant is of the view that
its proposal documentation demonstrated that it has sufficient
depth, character and personal and corporate experience to fulfil
these requirements.
In the GIR, the Department categorized the complaint into three
subject areas: interaction between DND and the contract awardee,
prior to and during the bidding process; the evaluation of the
complainant’s proposal; and the evaluation of the contract
awardee’s proposal and its subsequent selection as the contractor.
The Department’s position is that there was no interaction between
the contract awardee and DND that was discriminatory or that had
the effect of precluding competition, that both proposals were
evaluated fairly and in accordance with the criteria and essential
requirements specified in the tender documentation and that the
Tribunal should dismiss the complaint.
On the question of interaction between DND and the contract
awardee, prior to and during the bidding process, the Department is
of the view that the clause in the RFP regarding communication
between bidders and the Crown must be viewed in the context in
which it is intended. The Department maintains that the ongoing
business of the government is not to be constrained and that the
clause is intended to eliminate a supplier, should it seek out and
obtain knowledge of a requirement that would give it an unfair
competitive advantage. The Department acknowledges that there may
have been contact between the contract awardee and DND prior to and
during the bidding process, but that such contact was limited to
matters arising from administrative requirements of the previous
contract and that nothing has compromised the competition in this
respect. With respect to alleged contact during the 1993 process,
the Department’s position is that the 1993 process is not the
subject of the present complaint. With respect to personal
relationships developing between the contract awardee and members
of DND, the Department acknowledges that personal relationships,
both negative and positive, can and do develop in circumstances
with long-term contracts, but takes the position that, in this
case, numerous and adequate steps were taken to protect the process
from any unfair advantage relating to these relationships.
On the question of the evaluation of the complainant’s proposal,
the Department’s position is that all proposals were evaluated
according to the requirements prescribed in the RFP. The Department
acknowledges that there is some subjectivity in the application of
this type of evaluation criteria, but that, in this case,
evaluations were carried out as objectively as possible and that
the points assigned to any particular criterion reflect the
judgement of the evaluation team. In the GIR, the Department
presented detailed arguments relating to the specific areas of
assessment of the rated criteria of the complainant’s proposal. An
especially detailed explanation in the area of “Corporate
Experience in Related Work” is included.
On the question of the evaluation of the contract awardee’s
proposal and its subsequent selection as the contractor, the
Department’s position is that the contract awardee’s proposal met
all the mandatory requirements as stipulated in the RFP and
received the only passing mark on the rated criteria and,
therefore, was entitled to be awarded the contract. With respect to
the complainant’s assertions in its proposal about the
instructor/student ratio and the unauthorized use of résumés by the
contract awardee, the Department views these issues as relating to
either contract administration or the individual concerned and the
bidder. The Department’s position, in general, is that each
proposal must be evaluated on its own merit and not in accordance
with information or allegations contained in a competitor’s
proposal and that the opinions or views of a bidder on another
bidder cannot be taken into consideration in the evaluation of
proposals.
The Department summarizes its position by stating that the
complainant was not discriminated against or treated less
favourably than any other potential supplier during the procurement
process; that the contract awardee was not provided with
information with regard to the procurement process that was not
available to any other prospective bidder or that would have the
effect of precluding competition; that the evaluation of the
complainant’s proposal was carried out properly and in accordance
with the criteria and essential requirements specified in the
tender documentation; and that the evaluation of the contract
awardee’s proposal and the subsequent contract award were carried
out in accordance with the criteria and essential requirements
specified in the tender documentation.
The contract awardee sought and was granted status as an
intervener in this case. With respect to the issues of safety, the
intervener stands by its exemplary eight-year safety record. In
summary, the intervener’s position with respect to the complaint is
that the allegations of misconduct and improprieties are without
basis and sufficiently addressed within the GIR.
Section 30.14 of the CITT Act requires that, in conducting an
inquiry, the Tribunal limit its considerations 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 requirements set out in the
AIT and NAFTA.
Paragraph 3(b) of Article 504 of the AIT prohibits “the biasing
of technical specifications in favour of, or against, particular
goods or services, ... or in favour of, or against, the suppliers
of such goods or services for the purpose of avoiding the
obligations of this Chapter.” Article 501 of the AIT provides, in
part, that the purpose of Chapter Five is to “establish a framework
that will ensure equal access to procurement for all Canadian
suppliers in order to contribute to a reduction in purchasing costs
and the development of a strong economy in a context of
transparency and efficiency.” Article 506(6) of the AIT provides,
in part, that “[t]he tender documents shall clearly identify the
requirements of the procurement, the criteria that will be used in
the evaluation of bids and the methods of weighting and evaluating
the criteria.”
Article 1008 of NAFTA, “Tendering Procedures,” reads as
follows:
1. Each Party shall ensure that the tendering procedures of
its entities are:
(a) applied in a non-discriminatory manner; and
(b) consistent with this Article and Articles 1009 through
1016.
2. In this regard, each Party shall ensure that its
entities:
(a) do not provide to any supplier information with regard to
a specific procurement in a manner that would have the effect of
precluding competition; and
(b) provide all suppliers equal access to information with
respect to a procurement during the period prior to the issuance of
any notice or tender documentation.
Article 1015 of NAFTA reads, in part, as follows:
4. 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 and have been submitted by a supplier that
complies with the conditions for participation;
(d) awards shall be made in accordance with the criteria and
essential requirements specified in the tender
documentation.
The Tribunal has examined all of the evidence before it and all
of the arguments made in all of the submissions by the Department,
the complainant and the intervener. After careful consideration of
the requirements of the applicable agreements, the Tribunal
determines that the complaint is valid in part. In evaluating the
proposals of both the complainant and the contract awardee, the
Department has failed to apply the stated evaluation criteria in
the manner specified in the RFP. This action amounts to a violation
of Article 506(6) of the AIT and paragraph 1(a) of Article 1008 and
paragraph 4(d) of Article 1015 of NAFTA.
In the Tribunal’s view, the complaint can be divided into five
main issues: (1) the apparent personal relationship between the
previous contract holder, the contract awardee, and DND personnel
involved in the administration of the contract and the resulting
effect that this had or could have had on the fairness of the
conduct of the procurement at issue; (2) the communication of
information by DND personnel to the contract awardee prior to or
during the bidding process that had the effect of discriminating
against other potential bidders; (3) the incomplete or improper
evaluation of the mandatory requirements stipulated in the RFP; (4)
the improper evaluation of the complainant’s proposal with respect
to the rated requirements stipulated in the RFP; and (5) the
improper evaluation of the contract awardee’s proposal and the
subsequent improper award of the contract.
With respect to the first issue, the evidence shows that the
Department and DND took and are taking steps (as stated in the GIR)
to minimize the effect of personal relationships on the competitive
procurement process, as it relates to this particular requirement.
In the Tribunal’s opinion, there is no evidence to suggest that
such relationships have provided the contract awardee with an
unfair advantage in this case.
With respect to the second issue, according to both the contract
awardee and DND, there were communications between the contract
awardee and DND personnel from Calgary and Winnipeg who were
involved with the leadership training camp; these communications
were limited to discussions about equipment to be purchased for the
camp, and no information about budgets or other proposals was
discussed at these times. The RFP requires that all
inquiries and any other communication with the Crown be
directed to the Department and that a violation of this clause
may result in the disqualification of the offender’s
proposal. In the Tribunal’s opinion, this clause must be read in
the spirit in which it is intended, that is, in relation to and
about the procurement being competed. This does not, however, mean
that potential bidders are entitled to receive, through casual
contact or through necessary administrative contact, information
that will give them an unfair advantage over other potential
bidders. Paragraph 2(b) of Article 1008 of NAFTA specifically
forbids this. In the case at hand, information about equipment that
was recommended to be purchased for the leadership camp, as a
result of the previous contract, was discussed between the contract
awardee and DND personnel. In some circumstances, such information
could provide knowledge about the future procurement that was not
readily available to other bidders. The requirement of this
procurement was specified in great detail in the tender
documentation which was available to all suppliers. Therefore, in
the Tribunal’s opinion, based on the evidence before it, the
contract awardee did not receive an unfair advantage based on the
communication about equipment. Although the Tribunal determined
that an unfair advantage was not created in this case, such a
practice during the bidding period could lead to unfavourable
perceptions.
With respect to the third issue, the Tribunal is satisfied,
based on the information before the contracting officer in relation
to the business licence required for the town of Banff, that she
correctly accepted a licence for 1995 as “evidence that the
necessary authorities will issue the requisite licence/permit.”
With respect to the assessment of item “C” of the mandatory
requirements, an examination of the proposed personnel was
performed only to determine if the minimum requirement “of three
fully qualified members [full mountain guides summer and winter] of
the Association of Canadian Mountain Guides (UIAGM)” was met. The
Tribunal determines that the omission of an assessment of the
stated mandatory requirements to “[p]rovide sufficient instructors
to meet the minimum instructor/student ratio acceptable industry
wide standard” and ensuring that the remainder of the guides were
“Associate or Restricted Members of the Association of Canadian
Mountain Guides” amounts to a change in the evaluation criteria
stipulated in the tender documentation and is, therefore, a
violation of the requirements of paragraph 4(a) of Article 1015 of
NAFTA and Article 506(6) of the AIT.
With respect to the fourth issue, the assessment of the rated
requirements of the complainant’s proposal, the Department and DND
took definitive steps with the goal of making the evaluation
objective. The RFP contained an annex dedicated to the evaluation
and selection of proposals. The Department sent proposals to DND to
be evaluated, with pricing information removed. The evaluation
committee had two members not connected with the administration of
the contract. An evaluation guide was prepared for the evaluation
committee members. Each evaluation was done independently by
committee members. The contracting officer performed an evaluation
independent of DND, and the results of all of the evaluations were
taken into consideration in arriving at the final scores. The
Tribunal is of the opinion, however, that there were serious flaws
in the conduct of the evaluation that may have resulted in a
somewhat less than objective scoring of the complainant’s proposal.
The Tribunal notes, as the Department noted, that the evaluation
committee was relatively inexperienced in assessing the kind of
services being procured. The Tribunal does state, for the record,
that the conduct of the individuals involved is not in question.
There is no evidence to indicate that their behaviour was anything
but conscientious. The flaws in the conduct of the evaluation are
of a procedural nature relating to defects in the instruments used
for that purpose, possibly compounded by the inexperience of the
evaluators.
The evaluation rating guide used by the evaluation committee is
seriously flawed in relation to the evaluation criteria stipulated
in the tender documentation. The weighting allocated to the
elements of the rated criteria cannot be predicted by the
organization of the same criteria in Annex C of the RFP. Potential
bidders could not possibly know what elements should be given
greater explanation or how their proposals would be ultimately
evaluated. The rating guide provides no scale of scoring for
evaluators, i.e. what constitutes full marks, half marks, no marks,
etc. The absence of such a scale results in allowing too much
subjective judgement on the part of the evaluators and is a
problem, particularly when the evaluators may not be familiar with
the subject matter being reviewed. The Tribunal notes that two
evaluators gave the complainant’s proposal a zero score for three
significant elements of the rated criteria for “Corporate
Experience in Related Work” and yet provided very little
explanation for doing so. Although the Department expanded
significantly on the reasons for this scoring in the GIR, the
Tribunal’s examination of the individual scoring worksheets leaves
doubt as to why those scores were zero. Given the fact that the
proposal contained significant information in relation to this
topic, scoring the proposal as such without explicit and detailed
reasons amounts to a procedural issue rather than one of judgement.
The averaging of the evaluators’ scores did not relieve the burden
of explaining the low scores at the time of the evaluation. The
Tribunal determines that the unpredictability of the point rating
scheme and the lack of direction to evaluators, resulting in
increased subjectivity in evaluations, favour the previous contract
holder simply because of its past participation in the same
procurement, discriminates against other potential bidders and is,
therefore, a violation of paragraph 1(a) of Article 1008 of NAFTA
and Article 506(6) of the AIT.
With respect to the fifth issue, the assessment of the contract
awardee’s proposal, the evaluation committee chose to ignore the
information in the complainant’s proposal that related to the
contract awardee’s proposal. The Tribunal is of the opinion that
the Department’s position on this matter, that each proposal be
evaluated on its own merits, is supported by the wording of the RFP
as to how the evaluation and selection would be conducted. With
respect to the question of the availability of personnel, although
there is no evidence that “bait-and-switch [6] ” tactics have been used in this case,
the lack of a definitive requirement relating to the availability
of personnel proposed leaves open the possibility of such tactics.
The Tribunal is of the opinion that the evaluation of the contract
awardee’s and the complainant’s proposals was incomplete in the
area of item “C” of the mandatory requirements found in Annex C of
the RFP and that, therefore, the award of the contract without a
complete evaluation was a violation of paragraph 4(d) of Article
1015 of NAFTA and Article 506(6) of the AIT.
Where the Tribunal determines that a complaint is valid, in
recommending an appropriate remedy, it is required, pursuant to
subsection 30.15(3) of the CITT Act, to consider all the
circumstances relevant to the procurement of the services to which
the designated contract relates, including the following:
(a) the seriousness of any deficiency in the procurement process
found by the Tribunal;
(b) the degree to which the complainant and all other interested
parties were prejudiced;
(c) the degree to which the integrity and efficiency of the
competitive procurement system was prejudiced;
(d) whether the parties acted in good faith; and
(e) the extent to which the contract was performed.
In examining the degree to which the complainant was prejudiced
in this case, the Tribunal will discuss what should have happened
to the complainant’s proposal at the initial stages of this
procurement. The complainant’s proposal did not address the
transportation requirement. The proposal did not contain any
pricing for this portion of the requirement and did not make direct
reference to this requirement in either the technical proposal or
the management plan. Although, according to the complainant, a
question of whether or not it was mandatory to bid on the
transportation portion of the requirement came up during telephone
conversations with the contracting officer and it was left with the
impression that bidding on this portion of the requirement was
optional, this enquiry and any subsequent response was never
communicated in writing, as required by the RFP. The tender
documentation, in the Tribunal’s opinion, required all portions of
the pricing information to be completed and required transportation
to and from the sites by the contractor as part of the statement of
requirement. The complainant’s proposal, therefore, did not, at the
time of bid opening, conform to all the essential requirements of
the tender documentation and should not have received further
consideration.
Given that there is insufficient time to conduct a
re-solicitation for this year and that a re-evaluation of the
proposals would eliminate the complainant from contention, the
Tribunal will not make a recommendation to terminate the contract.
It is, however, recommended that the Department not exercise the
option to extend the contract for an additional two years and,
instead, should the requirement continue to exist, re-issue a
competitive solicitation for the requirement. The re-issued
solicitation should include a complete list of mandatory and rated
criteria that will be examined and considered during the evaluation
of any proposals. The RFP should clearly indicate the weighting and
definition of any rated criteria. The Department should review any
evaluation rating guide to ensure that proposals can be objectively
and fairly evaluated and that evaluators have clear and detailed
instructions on how to evaluate and the justification required for
scoring. Attention should be paid to clarifying the clauses
relating to key personnel and the extent to which the proposal of
particular personnel translates to a commitment to provide those
named individuals.
In light of the foregoing, the Tribunal determines, in
consideration of the subject matter of the complaint, that the
complaint is valid in part.
Pursuant to subsection 30.15(2) of the CITT Act, the Tribunal
recommends, as a remedy, that the Department not exercise the
option to extend the contract for an additional two years and,
instead, should the requirement continue to exist, re-issue a
competitive solicitation for the requirement in accordance with the
provisions of the applicable agreements.
1. R.S.C. 1985, c. 47
(4th Supp.).
2. SOR/93-602,
December 15, 1993, Canada Gazette Part II, Vol. 127, No. 26 at
4547, as amended.
3. Done at Ottawa,
Ontario, December 11 and 17, 1992, at Mexico, D.F., on December 14
and 17, 1992, and at Washington, D.C., on December 8 and 17, 1992
(in force for Canada on January 1, 1994).
4. As signed at
Ottawa, Ontario, on July 18, 1994.
5. SOR/91-499, August
14, 1991, Canada Gazette Part II, Vol. 125, No. 18 at 2912, as
amended.
6. Bait and switch
occurs when a bidder obtains a favourable evaluation of its
proposal by offering personnel that it does not expect to use
during contract performance.
[Table of Contents]
Initial publication: December 18, 1996
