This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its March 2018 determination in AirClean Systems Canada v. Department of Public Works and Government Services, the Canadian International Trade Tribunal upheld a government evaluation process, but expressed concerns over the government’s reliance on the written assurances of the winning bidder regarding the adequacy of its proposed products. The case dealt with a tendering process for the procurement of a fume hood for the Royal Canadian Mounted Police (RCMP) to test dangerous drugs. The complainant challenged the evaluation process, arguing that the government never tested the products proposed by its competitor to ensure that they met the safety requirements and instead relied on the written assurances provided by the winning bidder to inform the contract award decision.
The government took the position that it was not required to test the products during evaluations to confirm if they functioned to specification, that it could confirm compliance with the specifications during contract performance, and that it could terminate the contract for non-performance if the products failed to meet the specifications. While the Tribunal agreed that the government was not required to actively assess product compliance during an evaluation if the solicitation rules did not mandate the testing, it also questioned whether relying on the written assurances of bidders was a prudent approach to awarding contracts for products that would be relied on for health and safety purposes:
The Tribunal remains concerned that the methodology selected for this solicitation is not what an average person reasonably informed of the risks involved would have expected given the nature of the products that the fume hoods will be used with. If a performance criterion does not live up to its claim and this is discovered only after a fume hood fails to perform in the field, human life may already have been risked or compromised. As such, absent actual testing of performance claims prior to field use, if ever it were to be uncovered “that the HEPAire products have non-compliance issues in meeting the contractual requirements,” the RCMP’s contemplated approach to “exercise [its] contractual legal options to terminate the Standing Offer” would be of no solace whatsoever to personnel exposed to, or affected by, fentanyl or similar products.
Given the nature of the subject-matter product and the history of this procurement, the Tribunal believes that it is incumbent upon it to share its concerns regarding the assessment methodology that was selected in the circumstances of this procurement and whether solicitations of this nature ought to be assessed on the basis of actual testing of bidders’ performance claims instead of paper claims of compliance only. Even though the Tribunal cannot make it a formal recommendation under the CITT Act because it has found no trade agreement breach to remedy, it trusts that PWGSC will consider these comments prior to launching other procurements for goods of that nature.
This matter raises potentially serious public and workplace safety concerns at the RCMP and other federal departments and agencies on whose behalf this procurement has been conducted by PWGSC. The Tribunal trusts that PWGSC will also consider the Tribunal’s concerns before the fume hoods are used in operational settings.
As this case illustrates, complying with the minimum procedural requirements set out in the tendering rules for bid evaluations is not necessarily the same as complying with broader due diligence duties in relation to the selection of appropriate goods and services. While in some instances it may be appropriate for public institutions to rely on the written assurances of bidders to inform contract award decisions, and then to rely on contract remedies if those assurances later prove false, public institutions should engage in a more active level of testing during bid evaluations when a breach of standards can result in significant downstream consequences during contract performance. In other words, government evaluators should avoid taking false comfort in limiting their evaluations to the assessment of written submissions and should carefully consider whether their procurement calls for a more active level of pre-award scrutiny. In those situations, the tendering rules should be tailored to clearly specify the nature of the testing that will be conducted as a pre-condition of contract award.
