In two related January 2012 determinations indexed as Almon Equipment Limited v. Department of Public Works and Government Services, the Canadian International Trade Tribunal rejected an unsuccessful bidder’s unfair advantage complaints. The first complaint, in which the bidder claimed that the past experience evaluation requirements unfairly favoured the incumbent, dealt with a Department of National Defence procurement of aircraft de-icing glycol recovery services at Canadian Forces Base Trenton. The second complaint, in which the bidder alleged that the government had posted the opportunity for an insufficient time and had relied on biased specifications, dealt with related aircraft de-icing, de-snowing and anti-icing services at the same air force base.
With respect to the first complaint, the complainant alleged that the past experience requirements intentionally excluded it and other companies from competing and were therefore overly restrictive and biased, representing a restraint of trade. The impugned past experience requirements were set out in the solicitation as follows:
The relevant requirements of the RFP, as amended, provide as follows:
TECHNICAL EVALUATION CRITERIA
4 Bidders must demonstrate experience providing aircraft de-icing glycol fluid recovery service at a minimum of one (1) airport meeting the classification requirements for a NAS airport or NON NAS Regional airport as defined in the Canadian National Airports Policy . . . with similar climatic conditions. Similar climatic conditions are defined as the same amount or more annual snowfall and the same or a lower average temperature than the average winter temperature at CFB Trenton in accordance with the national environmental service. These services must have been performed for a minimum of 3 de-icing seasons since 2006, of which 2 de-icing seasons must be since 2008. …
9. RESUMES OF PROPOSED PERSONNEL
The Bidder must provide resumes of all personnel dedicated to performing the tasks detailed in the SOW, directly relating to the reclamation of aircraft de-icing glycol fluids. Project Personnel must have a minimum of one (1) de-icing season of experience within the past two (2) years directly relating to the reclamation of aircraft de-icing glycol fluids at an airport which had similar climatic conditions as CFB Trenton. Similar climatic conditions are defined as the same or greater amount of annual snowfall and the same or lower average temperature than the average winter temperature at CFB Trenton in accordance with the national environmental service.
In turn, the SOW includes the following requirements:
3.1.4 The contractor must adhere to Reference 2.2; the acceptable glycol release concentration guideline is a maximum of 100[parts per million (ppm)].
3.1.5 The contractor must test the glycol concentration of the standing water in the de-icing area and once it is below 100 ppm, the contractor will then notify the DWO [Duty Watch Officer] who will call the duty WEnv Tech [Wing Environmental Technologist] to retest and verify the reading.
. . .
3.2.7 Glycol analytical equipment must be approved by the Wing Environment Officer. (paras. 27-28)
The Tribunal summarized the complainant’s arguments against this requirement as follows:
Regarding mandatory criterion 4, Almon submitted that there have only been five de-icing seasons since 2006 and three seasons since 2008 Thus, the requirement is to show services that have been provided in two of the last three years and three of the last five years. Almon submitted that it is overburdensome and unnecessary to require a company to demonstrate that it has experience in two of the last three years, especially for long established companies like itself.
Regarding mandatory criterion 9, Almon submitted that there is no requirement to have staff with such recent aircraft de-icing glycol fluid recovery experience, as the glycol spray and recovery procedure used today is relatively unchanged since the 1980s and that, by requiring experience with climatic conditions similar to those at CFB Trenton, the contract is biased towards the company which held the contract at CFB Trenton for the past two seasons. It also submitted that it is uncertain what is meant by “… one (1) de-icing season of experience within the past two (2) years…”, as the glycol recovery season straddles two calendar years. Thus, only one full “season” has occurred in the past two calendar years, that being 2010-2011.
Almon contended that, by phrasing the requirement in such a way, it can be interpreted as meaning that the contract will be awarded to the company that provided the services last year. Almon submitted that an operator with 10 years of experience is more qualified than an operator that has only collected glycol fluid over the past two years. (paras. 29-31, footnotes omitted)
However, as the Tribunal explained, the Department of National Defence maintained that the past experience criteria constituted legitimate operational requirements in light of the challenging weather conditions which did not allow contractors to get “on the job training” in order to perform the work:
PWGSC acknowledged that the requirements for recent experience in the services at issue are demanding. However, it submitted that, in the circumstances of the particular operational requirements of CFB Trenton, including aircraft safety and environmental concerns, these rigorous requirements are both reasonable and well founded.
In particular, PWGSC stated that CFB Trenton is required to be prepared to support, without delay, a wide variety of critical flight operations in all climatic conditions in support of the Canadian Forces’ operations, including military transportation, search-and-rescue flights, and sovereignty missions. It submitted that, in such circumstances, there is no room for a contractor that needs time for it or its personnel to “get up to speed”; hence, the requirement for recent experience.
PWGSC further submitted that, in the case of the services required under the procurement at issue, CFB Trenton is extremely mindful of its responsibilities with respect to the environmental concerns posed by the close proximity of CFB Trenton to the Bay of Quinte and its watershed. Given these concerns, PWGSC submitted that it is entirely reasonable to require that any glycol recovery services provided at CFB Trenton be of a high standard of reliability. PWGSC contended that the likelihood of a contractor being able to meet such standards is strongly enhanced by the requirement that a bidder and its proposed personnel all have recent experience, as set out in the RFP.
Regarding Almon’s allegation that, by requiring experience with climatic conditions similar to those at CFB Trenton, the contract is biased towards the company which held the contract for the past two seasons, PWGSC submitted that the term “similar climatic conditions” is broadly defined and not specific to CFB Trenton. In other words, in PWGSC’s view, since the required experience can be obtained by potential suppliers at a significant number of airports in Canada, such requirements are not discriminatory or biased in favour of any particular suppliers. (paras. 32-35)
In this case, the Tribunal determined that past experience criteria fell within the meaning of “legitimate operational requirements” and therefore dismissed the complaint. As this determination illustrates, incorporating strict past experience requirements does not constitute a breach of the trade treaty duties relating to open competition as long as those requirements can be justified in the circumstances. That said, the determination also illustrates the close scrutiny that such requirements will face by competing suppliers and underscores the importance of ensuring a proper balance in government procurement between threshold evaluation requirements and open competition obligations.
With respect to the second related complaint, the complainant alleged that the time allowed to submit bids was unreasonable. It also asserted that certain requirements in the solicitation intentionally excluded it and other companies from competing and were overly restrictive and biased and represented a restraint of trade. The Tribunal summarized the complainant’s allegations regarding the biased specifications as follows:
Annex I to the RFP, which sets out the mandatory technical evaluation criteria for the solicitation at issue, provides as follows:
The Bidder must demonstrate how they meet the Minimum Application Equipment stipulations under point 3.2.7 of the Statement of Work (SOW) in Annex A. In particular, the Bidder must demonstrate that at bid closing it either owns the equipment identified or has an executed agreement, a copy of which must be provided with the bid.
The SOW, which is found in Annex A to the RFP, provides as follows:
3.2.7 Minimum Application Equipment: The contractor must provide four (4) application vehicles and personnel for the de/anti-icing process: two (2) vehicles to de/anti-ice the aircraft wings (55 foot boom) and two (2) vehicles to de/anti-ice the aircraft tail (75 foot boom).
Almon submitted that this requirement is overly restrictive and anti-competitive because it is not necessary and the purchase of two such vehicles, namely, vehicles with a 75-foot boom, in such a short time, is untenable. It further submitted that it held a previous contract for the de-icing services at CFB Trenton and that it was able to successfully and safely de-ice the largest airplane with a 75-foot tail, by making a simple modification to a 55-foot de-icing and anti-icing vehicle by incorporating a platform device.
Almon also submitted that a de-icing and anti-icing vehicle with a 75-foot boom is not readily available for purchase by companies wishing to compete for this requirement since there is insufficient lead time left before the commencement of the 2011-2012 de-icing season for the acquisition of such specialized equipment. Almon further submitted that it was unreasonable to expect potential suppliers to spend large sums to acquire the required equipment on the basis of the possibility that they may be granted a contract. (paras. 22-25)
However, the Tribunal rejected these assertions, finding that the government’s vehicle requirements were not unreasonable given the nature of the services in question. The Tribunal also rejected the complainant’s arguments regarding the length of the bidding period, finding that the 30-day period was sufficient, particularly given the complainant’s past knowledge and experience in providing these services, which should have allowed it to anticipate that the solicitation would be forthcoming:
The Tribunal is unable to accept Almon’s argument that a 30-day bidding period was unreasonable in the circumstances. On the whole, the evidence on the record establishes that PWGSC extended the bidding period as much as it could, taking into account its legitimate operational requirements, and the Tribunal is not convinced that the procurement was of a level of complexity that warranted providing suppliers with a longer period of time to submit bids.
Almon argued, in effect, that it was put in a difficult position to properly respond to the solicitation because of the fact that PWGSC only issued the RFP in August 2011. However, there is no evidence that this was done to give a competitive advantage to the incumbent supplier.
In any event, the Tribunal notes that Almon was a former, not previous, contract holder for the same services at the same airport. Through a previous complaint, File No. PR-2008-048, Almon closely monitored and followed the award process of two contracts—one for the removal of snow and ice from aircraft to prepare them for flight, and another for the reclamation and disposal of glycol and glycol-contaminated materials resulting from the snow and ice removal.
The Tribunal’s decision in that case was subsequently appealed to the Federal Court of Appeal and was remanded back to the Tribunal for further review. The Tribunal’s decision in the remand was made on March 1, 2011, with a compensation order in Almon’s favour issued on October 14, 2011. Through this process, the timing of the expiration of the last contract and the probability that the requirement would again need to be filled for the 2011-2012 season should reasonably have been clear to Almon. All this previous activity tells the Tribunal that Almon should have been aware of this contract and should have had a general idea of its requirements and its renewal process. (paras. 42-45, footnotes omitted)
The Tribunal therefore rejected the complaint and awarded costs against the complainant. The complainant appealed both determinations, but they were subsequently upheld by the Federal Court of Appeal in its December 2012 decision in Almon Equipment Limited v. Canada (Attorney General) in which the court found that the Tribunal’s decisions were reasonable:
Almon has not satisfied us that either decision is unreasonable. For the most part, it merely repeated the arguments rejected by the CITT. The CITT’s thorough reasons provide sufficient justification for the decisions, which fall within the range of possible outcomes reasonably open to it on the facts and the applicable law.
We note, in particular, the absence of specific evidence in the affidavit filed on behalf of Almon by Mr Ally. For example, he adduced no specific evidence to prove that trucks with 75-foot booms could not readily be obtained, or that Almon asked PWGSC for additional time to attempt to acquire one.
We would only add that we agree with the CITT that the fact that one bidder is better able than another to meet the specifications of an RFP does not in itself necessarily mean that the requirements of the RFP are biased in favour of that bidder. We also agree that the purchaser of goods or services has the right to determine the requirements needed for bidders to meet its legitimate operational requirements, subject to the limits imposed by the applicable trade agreements to ensure fair competition in public procurement. (paras. 9-11)
The complainant’s appeal was therefore dismissed and the Tribunal’s rejection of the losing bidder’s complaints was upheld. As these decisions illustrate, bidders bear the onus of proving their allegations of biased specifications and unfair incumbent advantage when they seek to challenge government procurement processes on these grounds.