Procurement

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TABLE OF CONTENTS

• DECISION
• STATEMENT OF REASONS
• • DECISION

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

BY

HEARTZAP SERVICES INC.

AGAINST

THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES

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

Dominique Laporte
Dominique Laporte
Secretary

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 that the Tribunal 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.

2. The complaint relates to a procurement (Solicitation No. U6800-096642/A) by the Department of Public Works and Government Services (PWGSC), on behalf of the Department of Industry, for, among other things, the provision of 22 defibrillators, 1 extra battery and 1 extra pad.

3. HeartZAP Services Inc. (HSI) alleged that PWGSC (1) did not properly specify the goods that it was seeking and (2) awarded the contract to a company that was not qualified to provide the goods to the Government of Canada.

4. The Invitation to Tender (ITT) was made available to bidders through MERX ³ on December 10, 2009. After receiving questions from HSI regarding the part numbers used to describe the goods, PWGSC verified the part numbers with the manufacturer and, on December 18, 2009, issued an amendment revising those part numbers. On January 14, 2010, HSI again questioned PWGSC about the part numbers and advised PWGSC that the part number listed for the defibrillator was for the main unit only and did not include batteries or pads. HSI suggested that PWGSC increase the line items for both the extra battery and the pad by 22 to ensure the receipt of all necessary items. On January 15, 2010, PWGSC advised HSI of the following:

[Another organization] says they got their original part numbers from another distributor in Ottawa, who bundle[s] the defibrillator itself, the battery pack and the pad. Some distributors do that bundling, others do not; whether or not you want to do so is your choice. Please indicate clearly in your bid what your prices do or do not include . . . so there is no need for another [ITT] amendment. Items and quantities are as per the original ITT and amendment 1.

5. On January 25, 2010, PWGSC posted a contract award notice on MERX, advising that a contract had been awarded to a competitor of HSI. It appears that, on January 29, 2010, HSI wrote to PWGSC’s Access to Information and Privacy Coordinator not only to raise concerns regarding the response from the contracting officer but also to allege that PWGSC had awarded the contract to a company that was not qualified to supply the Government of Canada with the goods. Specifically, HSI alleged that the winning bidder:

6. On February 2, 2010, HSI made an initial submission to the Tribunal. The Tribunal responded, on February 3, 2010, that the submission was not complete and that HSI’s complaint could not be considered filed until additional information was provided to the Tribunal. On February 5, 2010, HSI provided the necessary information, and the complaint was considered filed.

7. 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 that 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.”

8. 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 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.

9. Moreover, paragraph 7(1)(c) of the Regulations requires that the Tribunal determine whether the information provided by the complainant discloses a reasonable indication that the procurement has not been conducted in accordance with whichever of Chapter Ten of the North American Free Trade Agreement, ⁴ Chapter Five of the Agreement on Internal Trade, ⁵ the Agreement on Government Procurement, ⁶ Chapter Kbis of the Canada-Chile Free Trade Agreement ⁷ or Chapter 14 of the Canada-Peru Free Trade Agreement ⁸ applies. In this case, the Tribunal finds that only the AIT and NAFTA apply. ⁹

10. The Tribunal must first determine the date on which the basis of the complaint became known or reasonably should have become known to HSI. The Tribunal notes that HSI objected to the first ground of complaint—that PWGSC did not properly specify the goods that it was seeking—on January 14, 2010. PWGSC responded to the objection on January 15, 2010, when it advised HSI that certain bidders bundled the defibrillator with the battery and pad and that “. . . there [was] no need for another [ITT] amendment. Items and quantities are as per the original ITT and amendment 1.”

11. The Tribunal considers that, on January 15, 2010, HSI received its denial of relief, as contemplated by subsection 6(2) of the Regulations. Accordingly, in order for the complaint to have been properly filed with the Tribunal, it should have been filed within 10 working days of the denial of relief communicated on January 15, 2010, or by January 29, 2010. Pursuant to paragraph 96(1)(b) of the Canadian International Trade Tribunal Rules, ¹⁰ HSI’s complaint was not considered to have been filed until February 5, 2010, upon receipt of the additional information sent by HSI. Therefore, the Tribunal considers that the first ground of complaint was not filed within the time limit set out in section 6 of the Regulations. Consequently, it will not conduct an inquiry into this ground of complaint.

12. With regard to the second ground of complaint—that PWGSC awarded the contract to a company that was not qualified to provide the goods to the Government of Canada—the Tribunal notes that the contract award notice was posted on MERX on January 25, 2010. As the complaint was filed on February 5, 2010, it was filed within the 10 working days specified in subsection 6(1) of the Regulations, and the Tribunal considers that this ground of complaint was filed in a timely manner.

13. The ITT required the following:

PART 3 - BID PREPARATION INSTRUCTIONS

. . . 

Section I: Technical Bid

. . . 

2.3 Warranty Product Support

The Bidder must indicate if it is authorized by the manufacturer to supply to the Canadian Government all products being offered:

(a) Bona fide agent/distributor of the manufacturer: YES (___) NO (___)

(b) Exclusive Canadian representative: YES (___) NO (___)

. . . 

PART 5 - CERTIFICATIONS

Bidders must provide the required certifications to be awarded a contract. Canada will declare a bid non-responsive if the required certifications are not completed and submitted as requested.

. . . 

1. Certifications Required With the Bid

The certifications listed below should be completed and submitted with the bid . . . .

1.1 Federal Contractors Program for Employment Equity - over $25,000 and below $200,000

. . . 

1.2 Price Certification Please check and sign the one that applies

Price Certification - Canadian Suppliers (other than agency and resale outlets) (_____)

. . . 

Price Certification - Canadian Agency and Resale Outlets (_____)

. . . 

1.3 Certification of compliance (Mandatory)

. . . 

. . . We hereby certify that our bid complies with all the articles, clauses, terms and conditions contained in this document.

14. The wording of the ITT does indicate that a bidder must answer the questions relating to warranty product support. However, it does not indicate that a “No” response to either of the questions posed at article 2.3 of Part 3 of the ITT would render a bid non-compliant. Part 5 of the ITT contained no requirement for a bidder to be “. . . authorized by the manufacturer to supply to the Canadian Government . . . .”

15. The Tribunal also notes that the ITT does not contain any requirement for a bidder to have a Medical Device Establishment Licence or for the units to have been purchased from a Canadian company or manufactured in Canada.

16. On the basis of the evidence contained in the complaint, HSI’s allegation regarding its competitor’s proposal is speculative, and the Tribunal does not consider that it reasonably indicates that PWGSC awarded the contract in a manner that was not in accordance with the provisions of either the AIT or NAFTA.

DECISION

17. Therefore, pursuant to subsection 30.13(1) of the CITT Act, the Tribunal decides not to conduct an inquiry into the complaint.

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

² . S.O.R./93-602 [Regulations].

³ . Canada’s electronic tendering service.

⁴ . 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 (entered into force 1 January 1994) [NAFTA].

⁵ . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/index_en/ait.htm> [AIT].

⁶ . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm> [AGP].

⁷ . Free Trade Agreement between the Government of Canada and the Government of the Republic of Chile, 1997 Can. T.S. No. 50 (entered into force 5 July 1997) [CCFTA]. Chapter Kbis, entitled “Government Procurement”, came into effect on September 5, 2008.

⁸ . Free Trade Agreement between Canada and the Republic of Peru, online: Department of Foreign Affairs and International Trade <http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/peru-perou/chapter-chapitre-14.aspx> (entered into force 1 August 2009) [CPFTA].

⁹ . According to the information found in the complaint, the value of the procurement fell below the monetary thresholds of the AGP, CCFTA and CPFTA, and, therefore, those trade agreements did not apply.

¹⁰ . S.O.R./91-499.