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Background

PWGSC issued an RFP on behalf of the Coast Guard for the provision of 2 emergency towing vessels and awarded the contract to Atlantic Services Limited (“ATL”). Another bidder, Heiltsuk Horizon (“Horizon”), filed a complaint with the CITT alleging that ATL’s bid was non-compliant because its vessels did not meet one of the mandatory requirements, and that PWGSC had demonstrated bias in favour of ATL in the structuring of the RFP .

CITT granted ATL intervener status in Horizon’s complaint because ATL had a vested interest in the outcome , and the matter proceeded to determination by the tribunal without a hearing in late 2018.

Bias

The evidence presented showed that a few days after PWGSC’s decision to award the contract to ATL, an ATL employee commented on social media that an ATL project team had been working on the same tender for 2 years. Horizon argued that this social media post showed that ATL had been working in consultation with the Canadian government many months before the issuance of the RFP. A similar argument was made that an RFP amendment that reduced the vessel age favoured ATL.

Mandatory Requirements

The RFP and amendments stated that, in order to satisfy the relevant mandatory requirement, bidders had to demonstrate that their vessels exerted “a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account.

The assessment methodology, amended in response to a bidder’s question, provided that “the Bidder must provide a certificate of compliance (independently verified) or bollard test output data . . . less than 10 years old that demonstrates a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account”.

Although ATL’s bid included bid pull certificates of less than 10 years old that confirmed the requisite bollard pull capacity, the Horizon objected because the vessels’ specifications showed that the tests conducted on the vessels had not accounted for engine-driven consumers, and the certificates on their face made no such calculation.

ATL and PWGSC argued that the RFP did not require the latter to look behind the certificates to test the accuracy of the pull capacity.

During the tribunal filing process, the CITT ordered PWGSC to disclose ATL’s complete bid as well as the evaluators’ individual and collective notes. PWGSC had opposed the disclosure order, arguing that the notes would not assist the CITT in its determination of the issues. The CITT was quite critical of this position, as such notes are routinely provided in similar proceedings and, most importantly, because the notes were “directly relevant to, and indeed determinative in, the Tribunal’s decision”, as will be explained below.

Tribunal Decision

In PR-2018-023, A Complaint By Horizon Maritime Services Ltd. (CITT), the tribunal ruled that PWGSC acted unreasonably in concluding that ATL’s bid was compliant, but rejected the argument that PWGSC had shown bias in ATL’s favour.

The CITT also recommended that PWGSC conduct a re-evaluation of the relevant mandatory requirement within 6 months while retaining the existing contract with ATL, with no further expenditures under that contract. The tribunal further recommended that, if ATL is unsuccessful after the re-evaluation, the current contract should be terminated and issued to the successful bidder. The CITT also made recommendations about the calculation of damages due to the complainant (ATL) if it is the successful bidder, based on the fact that Horizon held the contract for the first 6 months.

Unreasonable Evaluation by PWGSC

The tribunal applied the reasonableness standard in assessing PWGSC’s evaluation, following the Dunsmuir v. New Brunswick 2008 SCC 9 line of cases – the process must be ‘justified, intelligible and transparent’. The Tribunal also confirmed that bidders have the onus of demonstrating that their bid complies with mandatory criteria.

In this case, the instructions to bidders required that the bid address the evaluation criteria in detail, and not simply repeat a statement contained in the bid documents. The tribunal found therefore, that ATL was required to demonstrate how its vessels met the mandatory requirements – i.e. that all engine-driven consumers were taken into account in the calculation of the minimum bollard pull capacity. The tribunal found that it was insufficient for PWGSC to rely solely on the certificates that ATL submitted.

The notes of one of the evaluators were especially damaging to PWGSC’s position, as one evaluator had questioned the very issue in dispute – that ATL’s bid, on its face, did not address the engine-driven consumer requirement, and the notes included the evaluator’s own calculations. There was no evidence that the evaluation team considered this question; in contrast, the evidence was that the team assumed that ATL’s bid was compliant on the basis of the certificates, and looked no further.

The CITT found that such an assumption does not meet the requirement of “justification, transparency and intelligibility” imposed by the Dunsmuir line of cases, thus determining that PWGSC’s decision was unreasonable.

Bias Allegations

The CITT confirmed that the duty of fairness applies to the tendering process for federal procurements and that this includes the decision-maker’s obligation to be impartial. Affirming the well-established principles that reasonable apprehension of bias depends on the unique facts of the case, allegations must have evidentiary support, and there is a presumption of “good faith and honesty both of the bidders and of the public servants”, the CITT concluded that a single social media post is insufficient evidence of bias.

Similarly, the tribunal found that the complainant did not meet the onus of proving that the bid requirements were restructured to favour ATL, especially as PWGSC had amended the age requirements in response to questions from another bidder and ATL.

What are the lessons learned?

It is critical that bidders demonstrate that their bids comply with all mandatory criteria; this is particularly important when RFx documents are explicit that it is insufficient to simply restate a statement from those documents.

The role of the evaluation team in documenting its review is equally important. Decision makers cannot rely on the usual deference of courts and tribunals to their decisions if the evaluation process shows that the team made assumptions about mandatory criteria and did not properly document the evaluation. In this case there is also the complicating fact that cautions about compliance raised by one of the evaluators appear to have been ignored.

It is good practice to seek legal advice in the event of a document disclosure request in a tendering dispute. Particularly troubling to the CITT was PWGSC’s position that the team’s notes were irrelevant and would not assist the tribunal. The CITT chastises PWGSC: “[t]he Tribunal expects a government institution to act with candor in the context of an inquiry. Documents of the kind routinely provided in proceedings such as this should be turned over as a matter of course even if they include information that could be detrimental to the government institution’s case. The public’s confidence in the integrity and efficiency of the procurement process… depends on it.” This finding highlights the significant risk to public sector organizations that fail to retain a copy of the individual evaluators’ notes. As we know, it is not enough to do the right thing in procurement, you also must be able to demonstrate that you did the right thing.

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.