This article is an excerpt from Government Procurement, which is available for purchase.
In its January 2013 determination in Paul Pollack Personnel Ltd. o/a The Pollack Group Canada, the Canadian International Trade Tribunal dismissed the complaint of a supplier who claimed that the government had improperly allowed a competing bidder to use the complainant’s employees in its competing bid. The Tribunal also dismissed the complainant’s allegations that the government had improperly leaked the complainant’s employee rates to its competitor.
The case dealt with a Request for Services for the provision of mailroom clerks under a Temporary Help Services Supply Arrangement framework. The complainant lost the contract award to a competing bidder that named the complainant’s employees in its bid. The complainant took issue with this outcome, arguing that it was contrary to the procurement rules to quote based on another bidder’s employees, and alleging that the government had leaked its employee rate information to the competing bidder.
The Tribunal rejected the complainant’s assertion that using a competitor’s employees in a bid was contrary to the procurement rules. It found that the treaty rules contained no such prohibition. Furthermore, the Tribunal found that the process expressly contemplated using employees of competing bidders since the rules expressly directed bidders to submit a prescribed form signed by the relevant employees in these situations:
- The Tribunal has reviewed the terms of the THS SA, the RFS as well as the documents incorporated by reference into these documents. The Tribunal has found no provision prohibiting Maplesoft from including another vendor’s resources in its bid, provided that the resources have signed a “Permission to Bid” form. According to evidence submitted with the GIR, Maplesoft provided signed “Permission to Bid” forms for each of the resources that it bid.
- In addition to there being no express prohibition against bidding another vendor’s resources, the Tribunal has previously stated that the “poaching” of employees is an internal matter between two bidders that does not amount to a breach of the trade agreements. In Brains II Canada Inc., the Tribunal decided not to inquire into a complaint that concerned allegations of employee poaching. Although the complaint was ultimately dismissed for being filed late, the Tribunal’s reasons included the following statement:
In this instance, there was no evidence to suggest that the evaluation process was conducted in a procedurally unfair manner. Although Brains II alleged that the successful bidder had improperly “poached” five of its employees, Public Safety Canada concluded that the transfer of employees was an internal matter between Brains II and the other bidder and ought not to be considered in its evaluation. The Tribunal agrees. In other words, there is no evidence that the above provisions of the trade agreements have been breached.
- In light of the above, the Tribunal finds that there is no evidence that DFAIT acted unfairly or in a manner that was inconsistent with the provisions of the THS SA, the RFS or the AIT when it accepted Maplesoft’s bid as compliant and awarded it the contract.
The Tribunal also rejected the complainant’s allegation that the government had provided the competing bidder with information about the complainant’s employee rates. The Tribunal found that there were other plausible explanations for the similar rates being contained in the competing bid:
- In the Tribunal’s view, Pollack’s position appears to be that the only explanation for the similarity between Maplesoft’s financial bid and its own must be that someone within DFAIT leaked Pollack’s pricing information. However, DFAIT has argued that there are alternative possibilities which could explain how Maplesoft may have known Pollack’s hourly rate, such as through the public disclosure of Pollack’s previous contract awards or through one of Pollack’s employees. The Tribunal accepts that there are alternative means by which Maplesoft may have obtained Pollack’s pricing information. In addition, the Tribunal has not discarded the possibility that the similarity between the two financial bids is coincidental.
- In addition, the Tribunal has reviewed the submissions and the evidence filed in this case and it finds that Pollack has not submitted sufficient evidence to establish that DFAIT failed to safeguard Pollack’s bid or that DFAIT leaked Pollack’s pricing information to Maplesoft. In fact, Pollack has provided no evidence, aside from its suspicions with respect to the similarity between Maplesoft’s financial bid and its own, to support the very serious allegations that it has made. Accordingly, the Tribunal cannot conclude that DFAIT breached the AIT.
While the Tribunal ultimately rejected the complaint, this determination serves as a useful reminder of the importance of safeguarding confidential supplier information since its improper disclosure by a purchasing entity to competing suppliers can give rise to potential legal liabilities.
