SPACEFILE INTERNATIONAL CORP.
File No. PR-2013-038

Decision made
Monday, February 10, 2014

Decision issued
Tuesday, February 11, 2014

Reasons issued
Friday, February 21, 2014

TABLE OF CONTENTS

DECISION

STATEMENT OF REASONS

SUMMARY OF THE COMPLAINT

BACKGROUND INFORMATION

TRIBUNAL ANALYSIS

 Did PWGSC Unfairly Discriminate Against Spacefile in its Choice of Time Frames?

 Did PWSGC Give Spacefile Sufficient Time to Obtain the Necessary Security Clearances?

DECISION

 

IN THE MATTER OF a complaint filed pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C., 1985, c. 47 (4th Supp.).

BY

SPACEFILE INTERNATIONAL CORP.

AGAINST

THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES

DECISION

Pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal has decided not to conduct an inquiry into the complaint.

Ann Penner
Ann Penner
Presiding Member

Dominique Laporte
Dominique Laporte
Secretary

The statement of reasons will be issued at a later date.

STATEMENT OF REASONS

1. Subsection 30.11(1) of the Canadian International Trade Tribunal Act^[1] provides that, subject to the Canadian International Trade Tribunal Procurement Inquiry Regulations,^[2] a potential supplier may file a complaint with the Canadian International Trade Tribunal (the Tribunal) concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint. Subsection 30.13(1) of the CITT Act provides that, subject to the Regulations, after the Tribunal determines that a complaint complies with subsection 30.11(2) of the CITT Act, it shall decide whether to conduct an inquiry into the complaint.

SUMMARY OF THE COMPLAINT

2. The complaint relates to a Request for Proposal (RFP) issued by the Department of Public Works and Government Services (PWGSC) on December 4, 2013, for the supply, delivery and installation of high‑density mobile shelving.
3. Spacefile International Corp. (Spacefile) complained that PWGSC acted in an unfair and discriminatory manner by not giving it adequate time to obtain the necessary security clearances to meet the requirements of the RFP.^[3]

BACKGROUND INFORMATION

4. When the RFP was first issued, it required bidders to meet security requirements at the date of bid closing. Part 6 of the RFP provides as follows:

(a) the Bidder must hold a valid organization security clearance as indicated in Part 7 – Resulting Contract Clauses;

(b) the Bidder’s proposed individuals requiring access to classified or protected information, assets or sensitive work site(s) must meet the security requirement as indicated in Part 7 – Resulting Contract Clauses;

(c) the Bidder must provide the name of all individuals who will require access to classified or protected information, assets or sensitive work sites.

5. On January 10, 2014, PWGSC amended the RFP to require bidders to meet the same requirements before the award of the contract.^[4] This amendment also reminded bidders to “. . . obtain the required security clearance promptly” and that “[a]ny delay in the award of a contract to allow the successful bidder to obtain the required clearance will be at the entire discretion of the Contracting Authority.”
6. Spacefile began the process of applying for its Designated Organizational Screening (DOS) with the Canadian Industrial Security Directorate (CISD) at PWGSC on October 16, 2013, in relation to another RFP in which it wanted to participate.^[5] In order to be able to start the process, Spacefile requested that the procurement officer responsible for the other RFP act as its sponsor and submit the necessary forms.^[6]
7. On December 4, 2013, Spacefile received an e-mail from PWGSC containing a list of the information required and the forms to be completed for the DOS.^[7] On December 17, 2013, Spacefile sent the required information and completed forms to the CISD.^[8]
8. On December 25, 2013, Spacefile sent an e-mail to PWGSC expressing concern that it would not receive the required security clearances before the bid closing date of January 16, 2014.^[9]
9. On January 16, 2014, Spacefile submitted its bid, even though it had not yet received the required security clearances.
10. On January 27, 2014, PWGSC notified Spacefile that the contract had been awarded to another bidder at a price that was higher than the one bid by Spacefile. It stated that, although Spacefile’s bid was responsive to the mandatory requirements of the solicitation, its security clearance was still pending with the CISD at the time of the contract award. PWGSC stated that “[d]ue to time constraints including a short delivery window a Contract could not be delayed to await the potential award of security clearance to Spacefile International Corp.”^[10]
11. On January 28, 2014, Spacefile sent an objection to PWGSC indicating that PWGSC’s choice of time frames for the security clearances was unfair and discriminatory.^[11] On February 5, 2014, PWGSC responded that operational requirements prevented it from delaying the contract award in order to allow Spacefile to obtain the required security clearances. Specifically, PWGSC stated as follows:

The current shelving systems electric drive mechanism is not working which has posed disruptions to service and potential health and safety risks to staff that are required to move the file bays manually. Due to these operational needs it was necessary to replace the unit as promptly as possible . . . .^[12]

12. On February 6, 2014, Spacefile filed its complaint with the Tribunal.

TRIBUNAL ANALYSIS

13. Upon receipt of a complaint which complies with subsection 30.11(2) of the CITT Act, the Tribunal must decide whether the following four conditions have been met before an inquiry can be conducted:

(i)         whether the complaint was filed within the time limits prescribed by section 6 of the Regulations;

(ii)        whether the complainant is an actual or potential supplier;

(iii)       whether the complaint is in respect of a designated contract; and

(iv)       whether the information provided by the complainant discloses a reasonable indication that the procurement has not been conducted in accordance with whichever of Chapter Ten of the North American Free Trade Agreement,^[13] Chapter Five of the Agreement on Internal Trade,^[14] the Agreement on Government Procurement,^[15] Chapter Kbis of the Canada-Chile Free Trade Agreement,^[16] Chapter Fourteen of the Canada-Peru Free Trade Agreement,^[17] Chapter Fourteen of the Canada-Colombia Free Trade Agreement^[18] or Chapter Sixteen of the Canada-Panama Free Trade Agreement^[19] applies.

14. Before assessing whether each of these conditions was met, the Tribunal must clarify its understanding of the issues raised in Spacefile’s complaint. As mentioned above, Spacefile alleged that PWGSC acted in an unfair and discriminatory manner by not giving it adequate time to obtain the necessary security clearances.^[20] In support of its claim, Spacefile cited two provisions of PWGSC’s Supply Manual that state that “[t]he contracting officer must . . . give time to bidders to implement security recommendations before contract award” and that “[t]he choice of . . . time frames [for the required security clearances to be granted] must not unfairly discriminate between potential suppliers”^[21] [underlining omitted]. In addition, Spacefile appended, to its complaint, section 3.55.1, “Security and Timelines”, of PWGSC’s Supply Manual, which sets out the approximate time frames for completing various types of security screening.
15. Although Spacefile expressed its complaint as a single issue, the Tribunal understands the complaint to involve two issues: (1) whether PWGSC unfairly discriminated against Spacefile in its choice of time frames; and (2) whether Spacefile was given sufficient time to obtain the necessary security clearances. The Tribunal will assess whether each of these issues meets the four conditions listed above.

Did PWGSC Unfairly Discriminate Against Spacefile in its Choice of Time Frames?

16. In the Tribunal’s view, the first issue in Spacefile’s complaint meets the first three conditions listed above: the complaint was filed within the prescribed time limits; Spacefile is a potential supplier; and the complaint is in respect of a contract covered at least by NAFTA. The analysis of the first issue in the complaint will therefore focus on the last condition, namely, whether it discloses a reasonable indication of a breach of an applicable trade agreement.
17. Spacefile referred to sections 3.55.1, “Security and Timelines”, and 4.30.15, “Industrial Security in Solicitations”, of PWGSC’s Supply Manual to support its claim that PWGSC’s choice of time frames was unfair and discriminatory.
18. The Tribunal has consistently held that it does not have the jurisdiction to inquire into whether a contracting authority acted consistently with its own policy unless that policy is incorporated into the solicitation documents.^[22] In this case, the provisions of PWGSC’s Supply Manual cited by Spacefile were not incorporated into the RFP. As a result, the Tribunal cannot consider whether PWGSC’s actions were consistent with its own policy. Rather, the Tribunal must determine whether PWGSC’s actions breached a provision of an applicable trade agreement.
19. In the Tribunal’s view, there are several provisions of NAFTA that may be relevant to Spacefile’s claim of unfair discrimination. Both Articles 1003 and 1008 of NAFTA contain prohibitions against discrimination. Article 1003 provides as follows:

Article 1003: National Treatment and Non-Discrimination

1. With respect to measures covered by this Chapter, each Party shall accord to goods of another Party, to the suppliers of such goods and to service suppliers of another Party, treatment no less favorable than the most favorable treatment that the Party accords to:

(a) its own goods and suppliers; and

(b) goods and suppliers of another Party.

2. With respect to measures covered by this Chapter, no Party may:

(a) treat a locally established supplier less favorably than another locally established supplier on the basis of degree of foreign affiliation or ownership; or

(b) discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for the particular procurement are goods or services of another Party.

3. Paragraph 1 does not apply to measures respecting customs duties or other charges of any kind imposed on or in connection with importation, the method of levying such duties or charges or other import regulations, including restrictions and formalities.

20. Article 1008 of NAFTA provides as follows:

Article 1008: Tendering Procedures

1. Each Party shall ensure that the tendering procedures of its entities are:

(a) applied in a non-discriminatory manner; and

. . . 

21. To disclose a reasonable indication that PWGSC breached either of these obligations in NAFTA, Spacefile must provide sufficient facts and evidence to establish a prima facie case.^[23]
22. In the Tribunal’s view, Spacefile has not substantiated its claim of unfair discrimination with any facts or evidence indicating that it received treatment less favourable than the treatment provided to any other supplier, including the winner. On the basis of the facts provided by Spacefile, the Tribunal can only conclude that PWGSC awarded the contract to a supplier that had met all the mandatory requirements of the RFP, including the security clearance requirements, by the date of the contract award. As of the date of contract award, Spacefile had not yet met the mandatory security clearance requirements and, therefore, could not have been awarded the contract. Furthermore, PWGSC retained the discretion to determine whether or not to delay the award of the contract in order to allow a successful bidder to obtain the required security clearances.^[24] That it did not do so, even though Spacefile submitted the lowest-priced bid, does not constitute discrimination against Spacefile.
23. Therefore, the Tribunal concludes that Spacefile’s claim of unfair discrimination does not disclose a reasonable indication of a breach of an applicable trade agreement.

Did PWSGC Give Spacefile Sufficient Time to Obtain the Necessary Security Clearances?

24. In the Tribunal’s view, the second issue raised in Spacefile’s complaint (i.e. that it had received insufficient time to obtain the necessary clearances) meets the second and third conditions listed above: Spacefile is a potential supplier; and the complaint is in respect of a contract covered at least by NAFTA. The Tribunal will therefore focus its analysis on whether the second issue in the complaint discloses a reasonable indication of a breach of an applicable trade agreement and whether it was filed within the prescribed time limits.
25. Article 1012 of NAFTA requires procuring entities to provide suppliers with adequate time to prepare and submit tenders before bid closing and to consider various factors in setting those time limits:

Article 1012: Time Limits for Tendering and Delivery

1. An entity shall:

(a) in prescribing a time limit, provide adequate time to allow suppliers of another Party to prepare and submit tenders before the closing of the tendering procedures;

(b) in determining a time limit, consistent with its own reasonable needs, take into account such factors as the complexity of the procurement, the extent of subcontracting anticipated, and the time normally required for transmitting tenders by mail from foreign as well as domestic points; and

(c) take due account of publication delays when setting the final date for receipt of tenders or applications to be invited to tender.

26. As part of its complaint, Spacefile filed section 3.55.1 of PWGSC’s Supply Manual. Section 3.55.1 provides estimated time frames for obtaining various types of security clearances. In this case, the RFP required reliability status and a DOS. Paragraph 3.55.1(c) indicates that it takes approximately 2 working days to obtain simple reliability status and between 52 and 100 days to obtain complex reliability status. Paragraph 3.55.1(d) indicates that it takes approximately two months to obtain a DOS but less if the supplier responds in a timely manner.
27. As indicated above, the RFP was issued on December 4, 2013, and the tendering period closed on January 16, 2014. Although it is unclear when the contract was actually awarded, the Tribunal presumes that it was awarded before January 27, 2014, which was the date of PWGSC’s letter to Spacefile indicating that the contract had been awarded to another supplier. Given these dates, PWGSC provided each supplier with a minimum of 43 days and a maximum of 53 days in which to obtain the required security clearances. Even if a supplier had the maximum of 53 days, this number of days would be less than the number of days estimated by PWGSC to obtain a DOS. Therefore, it was unlikely that a supplier starting the security clearance process on December 4, 2013, would have been able to obtain the required security clearances before the date of contract award, especially given that the Christmas holiday period fell during this time and would have reduced the ability of the CISD to process and issue a DOS within the estimated time frames.
28. Therefore, this information provides a reasonable indication that PWGSC did not provide prospective suppliers with sufficient time to prepare and submit tenders before the closing of tendering procedures. In this way, the fourth condition for accepting a complaint is met, as there is a reasonable indication that PWGSC breached the applicable trade agreements.
29. Even so, the Tribunal is of the view that Spacefile did not file its complaint within the prescribed time limits.
30. Subsection 6(1) of the Regulations provides that a complaint shall be filed with the Tribunal “. . . not later than 10 working days after the day on which the basis of the complaint became known or reasonably should have become known to the potential supplier” [emphasis added].
31. Subsection 6(2) of the Regulations provides that a potential supplier that has made an objection to the relevant government institution, and is denied relief by that government institution, may file a complaint with the Tribunal “. . . within 10 working days after the day on which the potential supplier has actual or constructive knowledge of the denial of relief, if the objection was made within 10 working days after the day on which its basis became known or reasonably should have become known to the potential supplier” [emphasis added].
32. As stated above, the RFP was issued on December 4, 2013. On or shortly after this date, Spacefile could have reasonably known from section 3.55.1 of PWGSC’s Supply Manual that it was unlikely to receive the necessary security clearances before bid closing. Paraphrasing subsections 6(1) and (2) of the Regulations, December 4, 2013, was therefore the date on which Spacefile reasonably should have become aware of the basis of the second issue raised in its complaint. Moreover, Spacefile’s e-mail to PWGSC on December 25, 2013, which expressed Spacefile’s significant concerns about its ability to get the clearances before bid closing, indicated that it may have had actual knowledge of this ground of complaint on December 25, 2013.
33. Pursuant to section 6 of the Regulations, Spacefile then had 10 working days to either make an objection to PWGSC or file a complaint to the Tribunal. As it did neither within this 10-day period, the Tribunal finds Spacefile’s claim that PWGSC did not provide sufficient time to obtain security clearances to be outside of the prescribed time limits. This Tribunal must therefore conclude that Spacefile’s complaint cannot be accepted for inquiry.
34. While this conclusion is regrettable, the Tribunal cannot proceed further, even though PWGSC did not appear to give Spacefile (and other bidders) sufficient time to obtain the necessary security clearances. As the Tribunal has consistently held in the past, the prescribed time limits are rigid and strict - bidders should not take a “wait and see” attitude before filing a complaint.^[25]
35. Nevertheless, PWGSC should have known that the deadlines for completing the security clearances could be problematic for bidders. In future, PWGSC should take more care in setting deadlines to preserve the fairness, transparency and integrity of the procurement system by allowing all bidders sufficient time to comply.

DECISION

36. Pursuant to subsection 30.13(1) of the CITT Act, the Tribunal has decided not to conduct an inquiry into the complaint.