The recent CITT ruling in Rockwell Collins Canada Inc. v. Department of Public Works and Government Services PR-2017-006 underscores the importance of using unambiguous, consistent and plain language when drafting RFX documents.

Briefly, in August 2016 the Department of Public Works and Government Services (“PWGSC”) issued a Request for Standing Offers (“RFSO”) on behalf of the Department of National Defence for the provision of air traffic control radio systems for military bases across Canada.

Ambiguous language

In some places, the RFSO specified that radios with both Very High Frequency (VHF) and Ultra High Frequency (UHF) band capabilities were required – but in other places the RFSO was less clear, using the oblique type symbol (“/”) when referring to different band capability requirements.

The Rockwell Collins Canada Inc. (“Rockwell”) bid had provided pricing for equipment having both capabilities, whereas the bid from Rohde & Schwarz Canada Inc. (“Rohde & Schwarz”) had proposed pricing for equipment that had either only VHF or only UHF band capabilities. As a result, Rohde & Schwarz was awarded the contract as the lowest bidder. Rockwell challenged that decision.

The Tribunal, in noting that the oblique is probably the most confusing symbol of the keyboard, found that Rockwell had interpreted it to mean ‘and’ but that Rohde & Schwarz interpreted it to mean ‘or.’ In this case, the use of the oblique created nothing but confusion and latent ambiguity. The language in the rest of the RFSO added to the confusion by stating that “the preferred solution is a VHF/UHF capable multi-channel transceiver,” and went on to say that PWGSC will not refuse a solution that does not meet this “preference” (para 73).

Meaning of “Preference”

The facts show that no weight was given to that stated preference in the evaluation room. In response, PWGSC argued that “a ‘preference’ in the present case should be read in the same way as when a buyer fancies a more expensive car but that, at the end of the day, will settle for something cheaper when faced with the choice” (para 77). The CITT noted that this interpretation may be applicable to a commercial negotiation or when a consumer is just shopping around; however this position is incorrect under the law of tendering where bilateral obligations exist. Instead, as is often the case where the judiciary is called upon to resolve the interpretation of ambiguous language, the CITT turned to the definition of “preference” in the Merriam-Webster’s Collegiate Dictionary: “the state of being preferred […] one that is preferred […] the act, fact or principle of giving advantages to some over others” and “to like better or best” (para 76).

The Outcome

Given this definition, and reviewing the 10 instances that the word was used in the RFSO, the Tribunal found that PWGSC’s failure to afford any weight to the stated preference violated Article 506(6) of the AIT and was sufficient in and of itself for the Tribunal to find the Rockwell complaint valid: “Not evaluating according to the stated criteria and, worse, pretending that the criterion does not exist, is simply wrong. A fundamental tenet of the law of tendering is this: a supplier who bids by the rules cannot be failed for abiding by them” (para 81).

The CITT found that the RFSO did overall contain a requirement that equipment meet both band capabilities, that this requirement was ignored in evaluating the responses, and that Rockwell should therefore be compensated for 50% of the profits it would have made had it been awarded the contract. The remedies of re-tendering or cancelling the RFSO were no longer available, and the Tribunal concluded that the Rockwell bid would have been on at least equal footing with the Rohde & Schwarz bid had PWGSC evaluated the bids in accordance with the stated requirements.

Editor’s Note:

As more Canadian organizations strive to create ‘flexibility’ in their competitive procurement processes, this ruling stands as a stark reminder to exercise care and ensure that all criteria for selection are both stated clearly and followed. In this case, the government argued that the RFSO was set up to allow maximum flexibility so that bidders could provide “innovative low-cost solutions” (para 51). The Tribunal found that this statement meant very little at all, and was certainly is no excuse for lack of clarity.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case.  For any particular legal problem, seek advice directly from your lawyer or in-house counsel.  All dates, contact information and website addresses were current at the time of original publication.