This article is an extract from the 5th edition of Government Procurement.
The Canadian International Trade Tribunal recently upheld two contract award recissions by the federal government after the post-award discovery of evaluation errors led to a reconsideration of the original awards.
In its August 2017 decision in Francis H.V.A.C. Services Ltd. v. Canada (Public Works and Government Services), the Federal Court of Appeal dismissed a losing bidder’s application for the judicial review of a Tribunal decision that rejected that bidder’s original complaint. The dispute dealt with a request for proposal for the provision of maintenance services in respect of heating, ventilation, air conditioning, commercial refrigeration, and boiler equipment at the Department of National Defence’s Connaught Range location in Ottawa, Ontario. The complainant was originally awarded the contract, but that award was rescinded when the government discovered that it has mistakenly disqualified a competing lower bidder, Modern Niagara Ottawa (“MNO”) based on an erroneous security clearance assessment. In dismissing the original complaint, the Tribunal determined that the government was under an obligation to correct it evaluation error and ruled that the government did not engage in bid repair when it corrected MNO’s mathematical errors based on correctly submitted unit prices. The Federal Court of Appeal agreed that the government acted properly in reversing its original award decision and that the government did not engage in bid repair when it corrected the mathematical errors. The Federal Court of Appeal dismissed the complainant’s application for judicial review and upheld the contract award decision.
Similarly, in its July 2021 determination in Leistritz Advanced Technologies Corp. v. Canada (Department of Public Works and Government Services), the Tribunal dismissed a complaint after finding that the government had the right and duty to correct its evaluation errors and revisit its contract award decision. The dispute dealt with a request for proposal issued by the Department of Public Works and Government Services (“PWGSC”) on behalf of the National Research Council of Canada (“NRC”) for the purchase of a high free volume twin-screw extruder. The government rescinded the complainant’s selection during contract award negotiations after discovering that a competing bid was improperly rejected as non-compliant. The Tribunal recognized the government’s right and duty to take this proactive remedial action:
In reviewing the communications between PWGSC and the parties, it is clear that a mistake had been made in finding Thermo Electron’s bid non-compliant. The missing information was easily found within its bid and PWGSC finalized the re-evaluation of Thermo Electron’s bid on the same day Thermo Electron had communicated its objection.
As both the Federal Court of Appeal and the Tribunal have stated, a contracting authority must take appropriate steps to correct errors in the procurement process, in keeping with the terms of the solicitation and in a manner that preserves the integrity of the competitive procurement process.
The Tribunal also typically accords a large measure of deference to evaluators in their evaluation of proposals. It has often indicated the following:
The Tribunal . . . [w]ill interfere only with an evaluation that is unreasonable and will substitute its judgment for that of the evaluators only when the evaluators have not applied themselves in evaluating a bidder’s proposal, have ignored vital information provided in a bid, have wrongly interpreted the scope of a requirement, have based their evaluation on undisclosed criteria or have otherwise not conducted the evaluation in a procedurally fair way. In addition, the Tribunal has previously indicated that a government entity’s determination will be considered reasonable if it is supported by a tenable explanation, regardless of whether the Tribunal itself finds that explanation compelling.
Even had Leistritz been awarded the contract, Thermo Electron would have had a right to object to its bid being found non-compliant and PWGSC would have then had to address this objection. Had PWGSC acted otherwise, Thermo Electron would have similarly had the opportunity to file a complaint with the Tribunal.
The Tribunal dismissed the complainant’s protest. As these cases illustrate, public institutions are under a duty to run a fair evaluation and award process and cannot rely on their own errors to prejudice a bidder’s right to a contract award. Rather, when evaluation errors are discovered, they should take proactive steps to mitigate those errors so that prejudiced bidders are not required to initiate legal proceedings to enforce their rights to a fair process.
