This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its February 2009 determination in Re MTS Allstream Inc., the Canadian International Trade Tribunal awarded lost profit damages to a complainant after finding that the government relied on vaguely drafted compliance requirements to improperly reject the complainant’s proposal. The case dealt with a Request for Proposals (RFP) for portable and mobile radios for the Royal Canadian Mounted Police. The RFP contained the following technical evaluation criteria:
1.1 Technical Evaluation
It is recommended that the Bidders include a compliance checklist in their proposals, cross-referring each mandatory technical criteria with the relevant portion in their proposals.
1.1.1 In order to establish full and unreserved compliance with all mandatory provisions, the bidder must:
a. specify that its Proposal is COMPLIANT or NON-COMPLIANT to those paragraphs/requirements which are associated with the bolded word “must” which are mandatory/essential requirements. The bidder can describe its compliance to these paragraphs/requirements by using the word “COMPLIANT” or the word “NON-COMPLIANT”;
b. clearly demonstrate compliance to mandatory/essential requirements by providing a statement which clearly supports/justifies the response provided;
and/or
Clearly demonstrate compliance to mandatory/essential requirements by providing features or characteristics with Original Equipment Manufacturer (OEM) or vendor published specifications, manuals, brochures or test data. This documentation must be included with the proposal;
c. include clear directions regarding where the relevant information required for evaluation can be found in its proposal. References to Web pages are forbidden. The bidder’s proposal must be complete by itself.
The complainant was rejected for failing to meet the technical requirements. It challenged its rejection, arguing that by “specifying” that its proposal complied with the requirements, as called for in part (a) above, it had satisfied the technical requirements. The government disagreed, arguing that the complainant had failed to meet all three parts of the requirements (i.e., parts (a), (b), and (c)) and that the proposal was therefore non-compliant.
The Tribunal noted that applicable trade treaty standards required the clear identification of the criteria to be used in the evaluation of bids and the methods of weighting and evaluating the criteria. It found that the government breached this treaty duty by using ambiguous evaluation requirements:
[T]he Tribunal notes that an ambiguity exists in section 1.1.1 of Part 4 of the RFP. A close review of that provision reveals the absence of a conjunction between paragraphs (b) and (c). The absence of the word “and” or “or” at the end of paragraph (b) leaves this section open to more than one reasonable interpretation. One interpretation would be to read in the word “and” between paragraphs (b) and (c). Doing so would make the requirements of all three paragraphs mandatory. On the other hand, if one read in the word “or” between paragraphs (b) and (c), then it would be reasonable to infer that only one of the three requirements needs to be met. Applying the principle of contra proferentem to this matter, any ambiguities should be construed as against the party that drafted the ambiguous provision.
The Tribunal determined that the interpretation and application of the applicable requirements was unreasonable and unfair and that the disqualification of the complainant breached applicable trade treaty rules. It therefore awarded lost profits to the complainant. As this case illustrates, bad punctuation can lead to legal liability, so institutions would be wise to carefully proof their solicitation documents, particularly those sections that relate to tender compliance requirements.
