This article is an excerpt from Government Procurement, which is available for purchase.
In its May 2012 decision in Mastermeter Products Canada Inc. v. North Bay (City), the Ontario Divisional Court rejected an unsuccessful proponent’s challenge of the City of North Bay’s evaluation and award decision. The case dealt with an RFP for the provision of a long-term water metering strategy, along with related implementation. After the City announced that it would award the $6.96 million contract to a competing proponent, Mastermeter launched a judicial review application to stop the contract award.
By way of background, after the City’s Chief Financial Officer raised concerns over the use of an undisclosed 15 year period as the base assumption for the net present value calculations of competing financial proposals, the evaluation committee was ordered to revisit its net present value analysis using 5, 10 and 15 year evaluation periods. While Mastermeter took issue with this evaluation process, the court found that the selected competing proponent scored highest under all three calculations and therefore rejected the legal challenge:
In our view, the RFP process was fair, and the decision to award the contract to Neptune was reasonable. Thus, there is no basis for judicial intervention in the City’s decision to award the contract to Neptune.
The Evaluation Committee applied the same set of criteria and undertook the same evaluation for the proposals of Neptune, Mastermeter and the other proponents.
The Evaluation Committee did not apply a criterion undisclosed in the RFP when it looked at the technical ratio. The RFP clearly specifies that price is part of the financial evaluation. While the RFP does not use the term “technical ratio”, it clearly states in Article 11 that the selection will be based on “the best overall value to the Corporation in terms of merit and price ratio.”
While the RFP did not explicitly set out an evaluation period, this did not render the process unfair. The City made no representation about the evaluation period. Mastermeter chose to use a capital cost ratio based on a 15 year period because the RFP required the meters to have a life cycle of at least 15 years. Mastermeter did not inquire or request clarification concerning its use of the 15 year period. Neptune calculated cost differently.
Each proponent received the same information from the City. Members of the Evaluation Committee applied the same set of criteria for each of the selected proponents. Some of the members of the Evaluation Committee provided sworn affidavits concerning the criteria they had used and they were not cross-examined. There is no suggestion of bad faith or that the decision was unreasonable or based on irrelevant extraneous factors. (paras. 27-31)
While the City’s evaluation process survived the judicial review challenge, this case illustrates how the failure to establish and communicate the baseline assumptions for evaluating competing proposals prior to the submission deadline can create legal exposures for a purchasing institution. In this instance, the evaluation decision withstood the legal challenge since the internal decision to revisit the evaluation based on different assumptions had no impact on the proponent rankings. Had the re-evaluation changed the proponent rankings, this could have adversely impacted the reasonableness and legal defensibility of the evaluation process. This case should therefore serve as a reminder of the need to properly plan and implement evaluations based on clearly understood and transparently disclosed factors.
