This article is an excerpt from Government Procurement, which is available for purchase.
In its February 2013 determination in C3 Polymeric Limited v. National Gallery of Canada, the Canadian International Trade Tribunal dismissed a complaint filed by a non-compliant bidder. The case dealt with an Invitation to Tender issued by the National Gallery of Canada for the replacement of insulation glass units and roof repairs. The complainant brought a legal challenge to the Tribunal after being disqualified for failing to provide proof of insurance with its proposal. It argued that proof of insurance was not a tender compliance requirement and that it could have been satisfied later in the process, after the submission of tenders. The Tribunal disagreed, finding that the insurance requirements had to be satisfied at the time of bid submission:
29. According to the NGC, the ITT indicated, in both clauses A.10.1b and B.1.1.1b, that it was mandatory for bidders to provide proof, in the form of an insurance certificate or letter of undertaking from the bidder’s insurance carrier, that the insurance carrier was able to provide the detailed coverage specified in Appendix C.
30. The NGC submitted that C3’s proposal was properly disqualified, because it did not address broad form completed operations coverage (BFCO) and broad form contractor’s equipment coverage, both of which were required in Appendix C. The NGC submitted that standard CGL does not, without additional information, establish BFCO or “broad form contractor’s equipment” coverage.
31. The NGC also noted that BFCO “was distinct from ‘completed operations’” coverage, which appears in the Masters Letter. As the Masters Letter neither addressed the specific types of coverage required by the ITT nor included a general statement that it would comply with all the requirements, the NGC submitted that determining whether the mandatory coverage was provided required guesswork.
32. The NGC noted that, before disqualifying C3, it consulted an insurance expert, Mr. Richard Lalonde, who advised the NGC that the Masters Letter did not meet the requirements of the ITT because it omitted the two elements noted above; these elements were deemed essential for the contemplated project. Mr. Lalonde also noted that, of lesser importance, but also missing was confirmation of the $5,000 maximum deductible and the rating of the insurer.
After upholding the government’s interpretation of the insurance requirements, the Tribunal stated that the onus is on proponents to ensure that they comply with the mandatory requirements set out in a solicitation. It found that the complainant had failed to meet this onus:
51. A well-established principle in the Tribunal’s jurisprudence is that “. . . the responsibility for ensuring that a proposal is compliant with all essential elements of a solicitation ultimately resides with the bidder. Accordingly, it is incumbent upon the bidder to exercise due diligence in the preparation of its proposal to make sure that it is compliant in all essential respects.”
52. Conversely, while it may choose to do so in some circumstances, a procuring entity is under no obligation to seek clarification of a proposal that falls short of demonstrating how it meets the evaluation criteria set out in the solicitation documents.
53. On the contrary, there is evidence in this case demonstrating that C3 adopted a passive attitude and did not exercise the required due diligence to ensure that the insurance document that it provided with its bid demonstrated compliance with the revised insurance requirements. According to the affidavit of Ms. Krueger, during the debriefing session of September 28, 2012, the representatives of Masters stated that they recognized the changes introduced by Appendix C but had decided not to modify their letter in light of any missing elements, since these could be added after the contract award.16 This recount is consistent with the letter from Masters to C3, dated October 9, 2012, wherein it is affirmed that, “
[i]n our experience when there is a question or concern regarding any documentation which serves as confirmation of coverage terms, these concerns are brought to the attention of the contractor and dealt with prior to the contract being executed.”1754. This was an incorrect assumption to make.
55. The onus is on bidders to demonstrate compliance with mandatory criteria and the procuring entity must evaluate bidders’ conformance with the mandatory requirements of a solicitation thoroughly and strictly before the contract award. Moreover, as previously noted, the trade agreements do not impose on a procuring entity an obligation to seek additional information from bidders or to otherwise perform research to find information that is not included in the proposal itself in order to clarify or confirm whether a proposal is compliant with the mandatory requirements of a solicitation; such actions could in some cases actually amount to bid repair, which the Tribunal has consistently held as impermissible.
The Tribunal therefore dismissed the complaint, finding that the proponent had been properly rejected for non-compliance. As this case illustrates, much will turn on both the substantive interpretation of tender call requirements, as well as on the interpretation of precisely when in the tendering process those requirements must be met. To better ensure the enforceability of their requirements, purchasing institutions should be precise in defining both the content of their requirements and the prescribed timing for compliance with those requirements.
