This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its July 2008 determination in Immeubles Yvan Dumais Inc. v. Department of Public Works and Government Services, the Canadian International Trade Tribunal found that the government applied an undisclosed formula to score the pricing of the complainant’s bid. The case dealt with a tender call for office space leasing. Instead of multiplying each competing lease rate by the minimum 562 square metres required in the tender call, the government multiplied each bidder’s lease rate by the total number of square metres offered in each bid. By applying this calculation, the complainant’s tender was assessed as being more expensive than the tenders of competing bidders who proposed higher per-square-metre rates but offered less space. The Tribunal, referring to the Agreement on Internal Trade (referred to as the AIT), determined that the government had failed to properly disclose its scoring formula:
Article 506(6) of the AIT provides that tender documents must clearly indicate the requirements of the procurement, the criteria that will be used in the evaluation of bids and the methods of weighting and evaluating the criteria. It follows from this requirement that the way in which the required information will be used will be clearly stated in the tender documents.
In this instance, subparagraph 11e)v) stated that the “quoted areas” would be” “used” for evaluation purposes. As mentioned, there is nothing which specifies how it will be used. To the extent that the subparagraph is supposed to inform the potential supplier about the criteria that will be applied during the evaluation, it is not clear; it is ambiguous. As such, the Tribunal is of the view that it is reasonable for Dumais to think, based on the information in the tender documents, that the square metre unit cost resulting from the information submitted in its tender was going to be considered for the purpose of evaluating the tender.… [I]f Dumais had understood from this information that it would have been disadvantageous for it to provide a rentable area of 602 square metres instead of 562 square metres, it would have elected to propose a more limited area.
In light of the foregoing, the Tribunal finds that the evaluation criteria of the solicitation do not meet the requirements of Article 506(6) of the AIT, Article 1015(4)(d) of NAFTA and Article XIII(3)(c) of the AGP and that the complaint is valid.
The Tribunal therefore determined that the evaluation criteria used in the Request for Proposals (RFP) failed to meet the disclosure requirements of the AIT, the North American Free Trade Agreement (referred to as the NAFTA), and the World Trade Organization’s Agreement on Government Procurement (referred to as the AGP). The complainant was awarded damages for lost profits. This case serves as a useful reminder to ensure that pricing evaluation criteria are transparent and properly aligned to clearly specified requirements.
