This article is an extract from the 5th edition of Government Procurement.
To avoid bid compliance disputes, public institutions are increasingly adopting the use of post-bid compliance rectification procedures. However, to be legally defensible, bidding procedures that employ post-bid compliance rectifications must operate outside of the “bid repair” restrictions of Contract A bidding rules. As the cases below illustrate, even where non-Contract A process rules expressly allow for post-bid cure periods, those rules must be administered in a fair and procedurally correct manner.
For example, in its May 2019 determination in Accipiter Radar Technologies Inc. v. Department of Public Works and Government Services, the Canadian International Trade Tribunal determined that the government’s unequal application of rectification and clarification procedures resulted in a biased evaluation process. The dispute dealt with a request for proposal for coastal radar equipment for the Canadian Coast Guard.
The complainant alleged that the government gave preferential treatment to competing bidders when it permitted a compliance cure period during a Compliance Assessment Report (“CAR”) process. The complainant also asserted that the government further biased the evaluation process through the unequal use of clarifications. While the Tribunal found that the government did not apply biased procedures in its CAR rectification process, it agreed with the complainant that the use of clarifications unfairly favoured competing bidders and biased the evaluation:
According to PWGSC, the purpose of the clarification questions was to clarify aspects of the bid which were unclear; not to determine compliance with mandatory technical criteria. The notification of non-compliance was to occur during Phase II with the issuance of the CAR. PWGSC submitted that clarification questions were unique to each bid; each bidder would not be issued the same clarification questions. Instead, clarification questions would necessarily be different as they were dependent upon the nature of the bids themselves. With respect to the CARs, PWGSC submitted that the CARs were unique to each bidder because they set out the requirements which the evaluators had determined to be non-compliant in respect of each individual bid. However, the form and scope of information provided to each bidder was the same. As no additional information was provided in the CARs, PWGSC maintained that all bidders were treated fairly.
For its part, Accipiter submitted that PWGSC’s conduct contradicted the purpose of the clarification questions as described by PWGSC in the GIR. Moreover, Accipiter claimed that the clarification questions it received were different than those provided to the other bidders in that the questions sent to other bidders contained “substantially greater information and detail”. They advised bidders of areas of non-compliance relating to their bids. Accipiter described the clarification questions it received on June 13, 2018, as being limited to technical questions regarding the structure of its bid, such as which items were included in Accipiter’s pricing proposal, what assumptions were being made in respect of the Statement of Work (SOW), which antenna was proposed for a particular location, and which response took precedence in a case of conflict. No references were made with respect to potential areas of non-compliance with any mandatory criteria. As Accipiter was allegedly not provided an opportunity to specifically address those issues, it claimed that it did not have the opportunity to provide PWGSC with the information necessary to determine whether its bid was indeed compliant or not. In this regard, Accipiter asserted that it was unfairly discriminated against as it was not provided a clarification process and/or CAR process that was comparable to those provided to the other bidders.
The Tribunal concurs. Based on its review of the relevant evidence, the Tribunal finds that there were prima facie differences between the clarification questions that Accipiter received in contrast to other bidders, both in form and substance. However, the Tribunal finds that the CARs issued to all bidders during Phase II of the evaluation were similar both in form and substance (i.e. each CAR included a list of requirements for which PWGSC determined the bid was non-compliant). Accordingly, the issue of fairness arises in respect of the clarification questions, not the CARs themselves.
The Tribunal also determined that this unequal treatment gave competing bidders an unfair advantage and breached the government’s trade treaty duties:
The key question for the Tribunal then is to determine whether the prima facie differences in the clarification questions amounted to a breach of the applicable provisions of the CFTA. To do this, the Tribunal must first determine whether the clarification questions were legitimately unique to the other bids, i.e. Bidders B and C. Insofar as the clarification questions were unique to those bids, it would be less likely that there would be any fairness issues concerning PWGSC’s conduct. However, if in fact they addressed issues that were also relevant to the contents of Accipiter’s bid, and Accipiter was not provided with the same questions, the other bidders would have received a comparative advantage. This prejudice would not have been limited to Accipiter’s opportunity to respond to the clarification questions, but also its ability to respond to the CAR in a more effective manner guided by insight into what issues PWGSC was grappling with in determining compliance from the clarification questions. The Tribunal notes that this may not have been the intention or purpose behind the clarification questions, but nevertheless the manner in which they were crafted provided the other bidders with specific knowledge regarding areas impacting their compliance.
Further, the Tribunal ruled that this resulted in a biased evaluation process:
Accipiter pointed to several indicators of bias, including the manner in which PWGSC implemented the terms of the RFP relating to the Canadian content certification, an amendment to the RFP which introduced a new requirement (the Inter VTS Exchange Format protocol interface), the differential approach to evaluating Accipiter’s bid and providing clarification questions to bidders, and the retendering of the RFP. The Tribunal finds that PWGSC’s conduct amounted to a reasonable apprehension of bias only in regards to the manner in which it posed clarification questions to Bidders B and C prior to the CARs.
With respect to the clarification questions posed to Bidders B and C, Accipiter was treated differently both in terms of the form and substance of the questions. The result: pertinent information was not provided to Accipiter in respect of the issues relating to its non-compliance. Meanwhile, the other bidders were provided this information to varying degrees and this gave them an advantage during the solicitation process. Additionally, they were permitted to provide information in responding to the clarification questions for evaluation outside the rules of the RFP; those rules explicitly limited the submission of different or additional information to Phase II of the evaluation process.
On this basis, the Tribunal finds it appropriate to draw adverse inferences from the lack of explanation on the part of PWGSC for the discrepancies described above.
The Tribunal, applying the test of an informed person viewing the matter realistically and practically, and having thought the matter through, considers PWGSC’s conduct, as described above, to give rise to a reasonable apprehension of bias. The Tribunal finds this ground of complaint to, therefore, be valid.
The Tribunal determined that the inconsistent use of clarifications prior to engaging in a compliance rectification process gave the other bidders a material advantage in responding to the compliance requirements and placed the complainant at a disadvantage. Given these findings, the Tribunal warned the government to give careful consideration of how it administers its future evaluation procedures:
The Tribunal finds the deficiencies were serious. Instead of ensuring a level playing field, PWGSC’s confidential communication with Bidders B and C during the solicitation process (and in particular when clarification questions were posed before the CARs were issued) gave those bidders a material advantage over Accipiter. In seeking clarification, PWGSC appeared to take little care in ensuring that the information it disclosed to one bidder was not prejudicial to another.
As noted above, Accipiter was prejudiced by the manner in which PWGSC breached the trade agreement. The lack of information concerning its bid and issues regarding its non-compliance, denied Accipiter the same opportunity to efficiently and more effectively address the CAR, which was the only opportunity it was given to respond to any correspondence of PWGSC relating to its non-compliance.
The Tribunal also finds that PWGSC’s conduct undermined the integrity and efficiency of the procurement process. As a result of its clarification questions, PWGSC provided other bidders a better opportunity prior to the issuance of the CAR to address specific issues that would impact their compliance assessment. PWGSC was, consequently, not in a position to proceed with the next phase of the solicitation process in a way that treated all bidders fairly and equitably. Considering the Tribunal’s findings that its conduct gave rise to a reasonable apprehension of bias, the Tribunal would therefore strongly urge PWGSC to give careful thought to how it will proceed in the next solicitation process.
However, since the Tribunal also determined that the complainant was properly disqualified on other grounds, it declined to provide a substantive remedy and limited the remedy to awarding the complainant its bid complaint costs. As this case illustrates, post-bid compliance rectifications must be administered in a fair and procedurally correct manner and should be distinguished from the broader clarification rights that may also apply to various aspects of an evaluation process, including the scoring of bids.
Similarly, in its October 2020 determination in Falcon Environmental Inc. v. Canada (Department of Public Works and Government Services), the Tribunal ordered the cancellation of a contract and ordered that the contract be awarded to the complainant after concluding that the original award was based on a flawed evaluation process. The dispute dealt with a request for proposals for aerodrome wildlife control services at Canadian Forces Base Trenton and Canadian Forces Detachment Mountain View. While the Tribunal accepted the government’s use of a post-bid rectification process to allow bidders to rectify and cure non-compliance issues in their initial bids, it found that the tender call rules did not permit the government to use information collected through this Compliance Assessment Report (“CAR”) process to also score the bids:
Applying the principles above to the facts before the Tribunal, it is clear that PWGSC failed to evaluate PNWR’s bid against rated criterion R1 in accordance with the terms of the RFP. As discussed below, the RFP expressly prohibited evaluators from using the information filed by a bidder in response to a CAR to increase the points an original bid could have received for a rated requirement. As argued by Falcon, the evidence filed with the GIR in File No. PR-2020-009 demonstrates that the evaluators did just that and, by doing so, improperly determined that PNWR was the highest ranked bidder.
Given the provisions in the trade agreements requiring contracting authorities to base their evaluation solely on the evaluation criteria in the solicitation documents, this error, in itself, is sufficient to conclude that the evaluation was unreasonable and justifies the Tribunal’s intervention to substitute its judgment for that of the evaluators.
The Tribunal therefore ruled that the original contract award was invalid and that the contract should be awarded to the complainant. As this case illustrates, evaluators should draw a clear distinction between post-bid cure procedures that permit bidders to rectify areas of non-compliance in their initial bid submissions, and other post-bid procedures that may allow bidders to refine their original scores through multi-stage bidding procedures. Unless the solicitation rules specifically allow for the post-bid collection of information for scoring purposes, evaluators should not use information collected for compliance rectification purposes for the subsequent scoring of compliant proposals.
Finally, in its February 2021 determination in Marine Recycling Corporation and Canadian Maritime Engineering Ltd. v. (Canada) Department of Public Works and Government Services, the Tribunal recognized the government’s phased approach to bid compliance. The case dealt with a request for proposal (“RFP”) for vessel disposal services. As the Tribunal noted, the RFP included a phased bid compliance process where bids were first reviewed for pricing irregularities to determine whether any information required to be included in the financial bid was missing so that bidders could remedy any identified deficiencies. Once pricing issues were addressed, the phased rectification process moved to a second technical review phase to identify any instances where the bid failed to meet any other mandatory criteria. As the Tribunal explained, after the technical compliance review, bidders were issued a compliance assessment report identifying any mandatory criteria that the bid failed to meet. After receiving those reports, bidders were then provided a period in which they could provide additional information to achieve compliance with the identified criteria.
The Tribunal found no issue with the phased compliance process used by the government. In fact, it overruled the government’s decision to cancel the RFP over other issues relating to the subsequent scoring of those compliant proposals. The Tribunal determined that the cancellation decision was unnecessary and ordered the government to proceed with re-evaluating the proposals that had passed the phased compliance screening process:
Considering the foregoing, the Tribunal agrees that PWGSC’s actions constituted a breach of Article 503(2) of the CFTA. The decision to cancel the RFP prior to conducting a re-evaluation amounted to a vital step being missed in the procurement process, one that cannot be justified on the basis of public interest. The Tribunal has not been persuaded that the ambiguity in the RFP described by PWGSC prevented it from determining the highest-ranking bidder nor did it constitute unforeseen circumstances in which it needed to exercise its right to cancel the RFP. In consideration of MRC’s and CME’s relative scores, careful review of their bids was warranted. It should be noted that the Tribunal does not believe that PWGSC’s response to the objections made by the complainants to be in bad faith; rather it was based upon a faulty assumption that there was only one possible recourse. The option to cancel in this instance was ultimately chosen due to an apparent lack of due diligence on the part of PWGSC to assess the evaluation errors alleged by the bidders and to mitigate the impact of these errors on the integrity of the procurement process, particularly as there were at least two compliant bidders who were capable of performing the contract.
As these cases illustrate, recent decisions are increasingly recognizing the validity of transparent rectification processes that allow bidders to cure compliance irregularities so that a larger number of submissions remain eligible for scoring in the subsequent stages of the evaluation process. Provided that the bidding process in question is not subject to Contract A tendering rules, the use of post-bid rectifications can help resolve bid compliance issues and avoid unnecessary litigation.
