This article is an excerpt from Government Procurement, which is available for purchase.
In its July 2013 determination in ML Wilson Management v. Parks Canada Agency, the Canadian International Trade Tribunal seized jurisdiction over a post-award dispute that arose over the government’s decision to rescind the complainant’s contract and award it to a competing bidder. The case dealt with the procurement of housekeeping services at the Palisades Stewardship Education Centre in Jasper National Park, Alberta. The complainant alleged that the cancellation of its contract and the award to a competing bidder were unfair and in contravention of the trade treaties.
Before considering the merits of the fairness complaint, the Tribunal turned its attention to the issue of its jurisdiction over post-award matters. It held that it in the circumstances it had jurisdiction to consider the complaint for the following reasons:
- In interpreting these provisions of the trade agreements, the Tribunal is of the view that the beginning of the procurement process is the moment in time when the contracting authority has decided on its procurement requirements and that the procurement process only comes to an end once the contract has been attributed in a definitive way. Contract administration is a separate phase that takes place after the procurement process is completed. It deals with issues that arise as a contract is performed and managed. The Tribunal has been clear that matters of contract administration are beyond the scope of its jurisdiction.
- Applying the Tribunal’s understanding of the procurement process to the present case, it is true that the procurement process would have normally ended with the award of the contract to ML Wilson. However, the contract between Parks Canada and ML Wilson was summarily cancelled by Parks Canada and then awarded in a definitive manner to another bidder. The Tribunal is of the view that once Parks Canada began re-evaluating the bids that it received in response to the RFP, it re-engaged the procurement process.
- To adopt another view would ignore the fact that a new evaluation process integral to the procurement process had been undertaken. Whether that step occurred, as in this instance, after an initial award can in no way subtract Parks Canada from the disciplines of the trade agreements, in favour of recourse to the courts.
- As such, the Tribunal has no difficulty in concluding that it has jurisdiction to inquire into a complaint relating to any element of the procurement process up to and including the definitive awarding of the contract to Dilligaf, as envisaged by the trade agreements.
After determining that it had jurisdiction, the Tribunal considered the fairness of the government’s rescission and re-award decision. The Tribunal found that the government had conducted an improper hidden re-evaluation based on information that was brought to its attention by a competing bidder:
- Nevertheless, at a certain period in time, whether before or after its decision to put that contract on “hold”, or to terminate it, but presumably before it awarded it to Dilligaf, Parks Canada conducted a re-evaluation. That re-evaluation appears to have been a direct result of Dilligaf’s grievances.
- Whether those grievances were well founded or not is beside the point. What is relevant is the way in which Dilligaf’s grievances influenced the evaluators to either reopen their initial evaluation or to ultimately decide as they did. From the moment that Parks Canada allowed itself to be influenced by these grievances and, more importantly, to consider or decide to act on them, the duty of fairness required it to take into account the rights of all other bidders involved in the procurement process.
- Here, the Tribunal finds that Parks Canada did not proceed with procedural fairness in a way that meets even the lower end of what is required by the trade agreements or what has come to be known as the “spectrum” of obligations in Canadian administrative law.
The Tribunal also found that the government breached its fairness duties by failing to provide the complainant with an opportunity to respond to the allegations that were brought forward by the competing bidder. Furthermore, the Tribunal found that the government put itself in the position of being the adjudicator of a procurement dispute when it instead should have directed the competing bidder to file a complaint with the Tribunal:
- Simply put, in the specific circumstances of the procurement process at issue in this inquiry, the Tribunal believes that Parks Canada should have disclosed to ML Wilson (and perhaps to all bidders) the specific basis upon which it was engaging in a re-evaluation of the bids and, at the very least, provided ML Wilson with the opportunity to make submissions on the issue.
- In effect, in acting as it did, Parks Canada became the adjudicator of a procurement dispute. But the manner in which Parks Canada proceeded could be mistaken for a decision based on an ex parte hearing of a single bidder’s viewpoint. ML Wilson did not get the chance to voice its position until it was too late, i.e. not until after it had been subjected to a re-evaluation and a decision affecting its contract had been made. In the Tribunal’s view, a reasonable participant in the procurement process could rightfully view the manner in which Parks Canada proceeded as having negatively affected the integrity of the competitive bidding process.
- Indeed, the reasonable participant in the procurement process is left pondering whether Parks Canada sacrificed fairness in favour of convenience, why it did not cancel the tender and proceed with a new solicitation process, or why, instead of acting in the potentially compromising situation it found itself in, it did not refer Dilligaf to file a complaint with the Tribunal, so that it’s grievances could be publicly heard and eventually responded to by ML Wilson.
While the Tribunal found that the government had been unfair in the manner that it addressed the procurement, it did not award a remedy to the complainant since it also found that the complainant had been allowed to improperly lower its price during post-bid negotiations. As this case illustrates, in order to better ensure the defensibility of their procurement decisions, government institutions should ensure that their procurement processes are run in accordance with the principles of fairness and should, at minimum, avoid hidden and arbitrarily applied procedures. Complainants should also be alive to the fact that their own procedural transgressions may factor against obtaining a future remedy if they later choose to bring a legal challenge against a procurement process.
