This article is an excerpt from Government Procurement, which is available for purchase.
In its May 2010 determination in Halkin Tool Limited v. Department of Public Works and Government Services, the Canadian International Trade Tribunal determined that the government used biased specifications in a hydraulic press brake RFP. The Tribunal ordered the government to cancel its procurement process and redraft its RFP using specifications that complied with the applicable treaty rules.
In its determination, the Tribunal considered the technical details of the challenged specification and ultimately determined that they breached the relevant requirements by referring to a particular design or type, rather than referring to generic functionalities:
Article 1007 of NAFTA provides as follows:
…
2. Each Party shall ensure that any technical specification prescribed by its entities is, where appropriate:
a. specified in terms of performance criteria rather than design or descriptive characteristics; and
b. based on international standards, national technical regulations, recognized national standards, or building codes.
3. Each Party shall ensure that the technical specifications prescribed by its entities do not require or refer to a particular trademark or name, patent, design or type, specific origin or producer or supplier unless there is no sufficiently precise or intelligible way of otherwise describing the procurement requirements and provided that, in such cases, words such as “or equivalent” are included in the tender documentation.Halkin submitted that the mandatory requirements for the solicitation at issue were not specified in terms of performance criteria, but rather made reference to a particular design or type, namely, clevis-mounted hydraulic cylinders and centreline loading construction. PWSGC, on the other hand, submitted that the mandatory requirements support DND’s legitimate operational requirements and are generic in nature and not specific to any particular design.
In the Tribunal’s opinion, the requirements set out in mandatory technical specifications 2.1.2 and 2.1.17 refer to a particular design or type and cannot be construed as being generic in nature. It is clear to the Tribunal that, in making reference to clevis-mounted hydraulic cylinders and centreline loading construction, PWGSC was making reference to a design or to descriptive characteristics for the product that it was procuring rather than specifying the performance that it was seeking to achieve through the particular design, even if this type of design is well known in the industry.
In its GIR, PWGSC included a letter dated January 28, 2010, signed by a DND employee (a professional engineer) who was involved in establishing the technical specifications for the solicitation at issue in which the employee claims that the concepts of clevis-mounted hydraulic cylinders and centreline loading construction are not specific to any particular design. However, the Tribunal notes that, despite this claim, the letter includes the following passages: “…the use of the clevis mounting creates a superior design…” and “
[t]he placement of the cylinders directly over the ram in the centre-line loading construction concept yields a simplified design… .” This only serves to reinforce the Tribunal’s belief that the requirements set out in mandatory technical specifications 2.1.2 and 2.1.17 refer to a particular design or type.By not including words such as “or equivalent” in these specifications, as required by Article 1007(3) of NAFTA and the similar provisions of the other applicable trade agreements, hydraulic press brakes based on other designs, which can potentially meet DND’s operational requirements, are precluded from being considered by PWGSC. The Tribunal finds that such an omission creates or has the effect of creating an unnecessary obstacle to trade.
Therefore, in light of the foregoing, the Tribunal determines that Halkin’s complaint, insofar as it relates to the improper formulation of the mandatory technical specifications, is valid.
In light of the above, the Tribunal determined that “not framing requirements in accordance with the applicable trade agreements represents a serious deficiency in the procurement process.” As this case illustrates, the consideration of biased specifications will often be a complex assessment of facts requiring a close understanding of the relevant technical details. In these situations, qualified technical subject matters experts should be responsible for preparing defensible neutral specifications.
