FALCON ENVIRONMENTAL SERVICES INC.
v.
DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES
File No. PR-2014-061

Determination and reasons issued
Wednesday, May 13, 2015

TABLE OF CONTENTS

• DETERMINATION
• STATEMENT OF REASONS
  • PROCUREMENT PROCESS AND COMPLAINT
  • POSITIONS OF PARTIES
    • PWGSC
    • Falcon
  • ANALYSIS
  • COSTS
  • DETERMINATION

 

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

AND FURTHER TO a decision to conduct an inquiry into the complaint pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act.

BETWEEN

FALCON ENVIRONMENTAL SERVICES INC. Complainant

AND

THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES Government Institution

DETERMINATION

Pursuant to subsection 30.14(2) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal determines that the complaint is not valid.

Pursuant to section 30.16 of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards the Department of Public Works and Government Services its reasonable costs incurred in responding to the complaint, which costs are to be paid by Falcon Environmental Services Inc. In accordance with the Procurement Costs Guideline, the Canadian International Trade Tribunal’s preliminary indication of the level of complexity for this complaint case is Level 1, and its preliminary indication of the amount of the cost award is $1,150. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Canadian International Trade Tribunal, as contemplated in article 4.2 of the Procurement Costs Guideline. The Canadian International Trade Tribunal reserves jurisdiction to establish the final amount of the award.

Peter Burn
Peter Burn
Presiding Member

Tribunal Member: Peter Burn, Presiding Member

Counsel for the Tribunal: Anja Grabundzija
Rebecca Marshall-Pritchard

Registrar Officer: Julie Lescom

Complainant: Falcon Environmental Services Inc.

Counsel for the Complainant: Gerald H. Stobo
Mandy E. Aylen

Government Institution: Department of Public Works and Government Services

Counsel for the Government Institution: Susan D. Clarke
Ian McLeod
Roy Chamoun
Kathleen McManus

Please address all communications to:

The Registrar
Canadian International Trade Tribunal
333 Laurier Avenue West
15th Floor
Ottawa, Ontario  K1A 0G7

Telephone: 613-993-3595
Fax: 613-990-2439
E-mail: citt-tcce@tribunal.gc.ca

STATEMENT OF REASONS

1. On February 25, 2015, Falcon Environmental Services Inc. (Falcon) filed a complaint with the Canadian International Trade Tribunal (the Tribunal) under subsection 30.11(1) of the Canadian International Trade Tribunal Act.^[1] The complaint concerned a Request for Proposal (RFP) (Solicitation No. W010C-14-C305/A) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of National Defence (DND) for the provision of wildlife control services.
2. Falcon complained that PWGSC incorrectly found Falcon’s bid non-compliant for allegedly not having been delivered to PWGSC’s bid receiving unit prior to bid closing. Relying on certain information obtained from Canada Post Corporation (CPC), Falcon alleged that its bid was delivered to PWGSC’s bid receiving unit two days prior to bid closing, but was subsequently mishandled by PWGSC.
3. As a remedy, Falcon requested that the Tribunal recommend that PWGSC accept its bid for evaluation in accordance with the requirements of the RFP or that PWGSC cancel this procurement and retender the requirement. In the further alternative, it requested monetary compensation for lost opportunity or lost profit. Falcon also requested its complaint costs.
4. On March 4, 2015, the Tribunal accepted Falcon’s complaint for inquiry, as it met the requirements of subsection 30.11(2) of the CITT Act and the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations.^[2] At the same time, the Tribunal ordered the postponement of the award of the contract pursuant to subsection 30.13(3) of the CITT Act until it determined the validity of the complaint.
5. On March 31, 2015, PWGSC filed a Government Institution Report (GIR) in accordance with rule 103 of the Canadian International Trade Tribunal Rules.^[3] Pursuant to rule 104, Falcon filed its reply to the GIR on April 13, 2015.
6. On April 21, 2015, PWGSC alleged that Falcon had raised new arguments and evidence in its reply. It therefore requested the Tribunal’s leave to provide a response. The Tribunal denied this request, as it did not consider further submissions to be necessary.
7. Given that there was sufficient information on the record to determine the validity of the complaint, the Tribunal decided that an oral hearing was not required and disposed of the complaint on the basis of the written information on the record.

PROCUREMENT PROCESS AND COMPLAINT

8. The RFP, published on November 25, 2014, included the following directions under Part 2 of the RFP, “BIDDER INSTRUCTIONS”:

2.2 Submission of Bids

Bids must be submitted only to Public Works and Government Services Canada (PWGSC) Bid Receiving Unit by the date, time and place indicated on page 1 of the bid solicitation.

9. The solicitation closing time and date indicated on page 1 of the RFP was 2:00 pm (Atlantic Daylight Saving Time) on January 28, 2015.^[4] The first page of the RFP specified the following address for the return of bids:

RETURN BIDS TO:

RETOURNER LES SOUMISSIONS À:

Bid Receiving Public Works and Government Services Canada/Réception des soumissions Travaux publics et Services gouvernementaux Canada

1713 Bedford Row

Halifax, N.S./Halifax, (N.É.)

B3J IT3

10. In addition, the first page of the RFP identified the following as the “Destination - of Goods, Services, and Construction”:

Department of National Defence

Willow Park Bldg 7

Stn Forces P.O. Box 99000

Halifax

Nova Scotia

B3K5X5

11. According to the complaint, on January 23, 2015, Falcon retained the services of CPC to deliver its bid to PWGSC by way of Priority Courier Service. However, on or around February 8, 2015, when Falcon communicated with PWGSC to inquire when the evaluation of bids would be completed, it was told that its bid had not been received. PWGSC then advised Falcon that its bid had been located at the DND Willow Park address set out above.^[5] PWGSC also informed Falcon that DND had sent its bid back to Falcon.^[6]
12. Falcon responded to PWGSC by alleging that its bid was successfully delivered by CPC to PWGSC on the morning of January 26, 2015, that is, two days prior to the deadline for the submission of bids. Falcon relied on a copy of what appears to be a CPC customer receipt dated January 23, 2015, for item number “MD 057 282 224 CA”, which identifies Falcon as the customer and, in the space reserved for the recipient, includes a printed sticker with PWGSC’s bid receiving unit coordinates.^[7] Falcon also relied on CPC’s online tracking history for item number “MD 057 282 224 CA”,^[8] which shows that the item was “successfully delivered” in “Halifax” on January 26, 2015, as well as on a CPC delivery certificate.^[9] The delivery certificate, however, did not include the signature of the recipient, contrary to CPC’s procedures.^[10]
13. Falcon asked PWGSC to accept its bid as a delayed bid pursuant to section 7 of the 2003 (2014‑09‑25) Standard Instructions – Goods or Services – Competitive Requirements (Standard Instructions), which were incorporated by reference by virtue of section 2.1 of the RFP. The Standard Instructions provided that late bids would be returned to the bidder, except in certain described circumstances. Sections 6 and 7 of the Standard Instructions provided as follows:

06 (2007-05-25) Late Bids

PWGSC will return bids delivered after the stipulated bid solicitation closing date and time, unless they qualify as a delayed bid as described below.

07 (2012-03-02) Delayed Bids

1. A bid delivered to the specified bid receiving unit after the closing date and time but before the contract award date may be considered, provided the bidder can prove the delay is due solely to a delay in delivery that can be attributed to the Canada Post Corporation (CPC) (or national equivalent of a foreign country). . . . The only pieces of evidence relating to a delay in the CPC system that are acceptable to PWGSC are:

1. a CPC cancellation date stamp; or
2. a CPC Priority Courier bill of lading; or
3. a CPC Xpresspost label

that clearly indicates that the bid was mailed before the bid closing date.

2. Misrouting, traffic volume, weather disturbances, labour disputes or any other causes for the late delivery of bids are not acceptable reasons for the bid to be accepted by PWGSC.
3. Postage meter imprints, whether imprinted by the Bidder, the CPC or the postal authority outside Canada, are not acceptable as proof of timely mailing.

14. By e-mails dated February 17 and 19, 2015, PWGSC definitively refused to accept Falcon’s bid as a delayed bid on the basis that the available information indicated that CPC delivered Falcon’s bid to DND’s premises. PWGSC indicated, in this regard, that the conditions of section 7 of the Standard Instructions for the acceptance of delayed bids were not met, as the bid was not “delayed” while in custody of CPC, but was apparently misrouted and never delivered to PWGSC’s bid receiving unit. PWGSC indicated that the misrouting of a bid is not an appropriate reason for accepting a late bid under section 7 of the Standard Instructions.^[11]
15. As indicated above, Falcon filed this complaint on February 25, 2015, alleging that PWGSC improperly declared its bid non-compliant, as it had been delivered to PWGSC’s bid receiving unit two days in advance of the deadline. Accordingly, Falcon argued that it should not be penalized for PWGSC’s mishandling of its bid.

POSITIONS OF PARTIES

PWGSC

16. According to PWGSC, there is no evidence to support Falcon’s allegation that PWGSC received its bid. To the contrary, a more detailed CPC tracking history for the item number associated with Falcon’s package obtained by PWGSC in the preparation of the required GIR and a CPC “Items Delivered Bill” obtained by PWGSC show that the item was destined for and delivered to DND’s Willow Park address. Falcon thus failed to exercise due diligence as a bidder to ensure that its bid met all the essential requirements of the solicitation.
17. As to Falcon’s allegation that PWGSC mishandled its bid, PWGSC maintained that there is no evidence that it had any involvement in sending the bid to DND’s Willow Park address and no evidence that PWGSC received the bid after it arrived at DND.

Falcon

18. In its comments on the GIR, Falcon reiterated its position that its bid had been properly delivered to the bid receiving unit specified in the RFP and that it received confirmation of that delivery in the form of a CPC customer receipt with a tracking number.
19. Falcon further stated, by affidavit, that, contrary to the detailed CPC tracking history filed by PWGSC, it had at various times received “verbal confirmation” from CPC representatives that Falcon’s package had been delivered to PWGSC’s bid receiving unit address.^[12] The comments on the GIR also included affidavit evidence to the effect that the bid package returned by DND, and opened approximately one month later, did not include the original outer envelope which would have conclusively shown to whom the package was addressed. On this basis, Falcon argued that PWGSC and DND had destroyed or misplaced the evidence determinative of this complaint. As a consequence, it argued that it would be “. . . unfair . . . for the Tribunal to invalidate the Complaint.”^[13]

ANALYSIS

20. Subsection 30.14(1) of the CITT Act requires that, in conducting an inquiry, the Tribunal limit its considerations to the subject matter of the complaint. At the conclusion of the inquiry, the Tribunal must determine whether the complaint is valid on the basis of whether the procedures and other requirements prescribed in respect of the designated contract have been observed. Section 11 of the Regulations provides that the Tribunal is required to determine whether the procurement was conducted in accordance with the applicable trade agreements, which, in this case, include the North American Free Trade Agreement,^[14] the Agreement on Internal Trade^[15] and the Agreement on Government Procurement.^[16]
21. The only ground of complaint in this case is that PWGSC declared Falcon’s bid non-compliant due to its own mishandling of the bid upon receipt at PWGSC’s bid receiving unit. PWGSC disputes this allegation, taking the position that it never received the bid. Accordingly, PWGSC maintains the view that Falcon failed to deliver its bid in accordance with the requirements of the RFP.
22. The trade agreements require a procuring entity to indicate to potential suppliers the time and place for delivery of bids; they also require that the procuring entity then award contracts to bidders that comply with the conditions of the solicitation. For example, Articles 1013 and 1015 of NAFTA read as follows:

Article 1013: Tender Documentation

1. Where an entity provides tender documentation to suppliers, the documentation shall contain all information necessary to permit suppliers to submit responsive tenders, including information required to be published in the notice referred to in Article 1010(2), except for the information required under Article 1010(2)(h). The documentation shall also include:

(a) the address of the entity to which tenders should be submitted;

. . . 

(d) the closing date and time for receipt of tenders and the length of time during which tenders should be open for acceptance;

. . . 

Article 1015: Submission, Receipt and Opening of Tenders and Awarding of Contracts

. . . 

4. An entity shall award contracts in accordance with the following:

(a) to be considered for award, a tender must, at the time of opening, conform to the essential requirements of the notices or tender documentation and have been submitted by a supplier that complies with the conditions for participation;^[17]

. . . 

23. The trade agreements further provide that a procuring entity may not penalize a bid for lateness where the delay is due solely to mishandling on the part of the procuring entity. For example, Article 1015(2) of NAFTA provides as follows:

No entity may penalize a supplier whose tender is received in the office designated in the tender documentation after the time specified for receiving tenders if the delay is due solely to mishandling on the part of the entity. An entity may also consider, in exceptional circumstances, tenders received after the time specified for receiving tenders if the entity’s procedures so provide.^[18]

24. The Tribunal finds that the RFP clearly specified that bids were to be returned to the “Bid Receiving Unit”, PWGSC’s unit specifically dedicated to taking delivery of bids, the full address of which was indicated on the first page of the RFP.
25. The Tribunal further finds that the evidence does not support Falcon’s allegation that its bid was mishandled upon receipt by PWGSC and improperly declared non-compliant.
26. Indeed, the evidence does not indicate that Falcon’s bid was received by PWGSC at any time. While Falcon relied on a customer receipt, online tracking history and delivery certificate from CPC as proof that its bid had been delivered to PWGSC’s bid receiving unit,^[19] these documents only indicate successful delivery in Halifax on January 26, 2015. The more detailed tracking search conducted by CPC and submitted by PWGSC specifies that the bid package was destined and delivered to a location with a postal code of B3K 5X5—the postal code associated with DND’s Willow Park address.^[20] Similarly, the CPC document titled “Items Delivered Bill” shows the item as delivered to “WP BLDG: 7”, which is consistent with Willow Park, Building 7.^[21] The Tribunal finds this evidence to be compelling and determinative of the issue as to where Falcon’s bid was delivered.
27. Furthermore, the information originating from CPC is consistent with the affidavit evidence of Lt. Parker, of DND, who received Falcon’s bid on January 28, 2015.^[22] CPC’s evidence is also consistent with PWGSC’s internal records, which are kept for all incoming correspondence and which, in this case, show no entries on and around January 26 to 28, 2015, that could be associated with Falcon’s bid.^[23]
28. Finally, the Tribunal finds that, even accepting Falcon’s submission that it had indeed addressed its bid to PWGSC (as purportedly shown by its customer receipt and, potentially, the unavailable outer envelope), the entirety of the evidence could, at best, show only that the bid was addressed to PWGSC, but was subsequently misrouted by CPC and delivered to DND. However, this is not the version of events put forward by Falcon, and such evidence cannot, in any case, prove mishandling of Falcon’s bid by PWGSC.^[24]
29. The Tribunal concludes that there is no evidence that Falcon’s bid was delivered to, or ever in the possession of, PWGSC. There is also no evidence to support Falcon’s allegation that PWGSC mishandled its bid and improperly declared it non-compliant. Consequently, the Tribunal finds no breach of the trade agreements in the treatment of Falcon’s bid and determines that the complaint is not valid.

COSTS

30. In its comments on the GIR, Falcon requested that costs be awarded to it regardless of the outcome of the complaint or, in the alternative, that PWGSC be denied its costs in the event that the Tribunal determined that the complaint was not valid, on the basis that PWGSC had withheld from Falcon the information on which it was relying, prior to the filing of the complaint, in determining that the bid had been delivered to DND. For its part, PWGSC requested costs in respect of the complaint.
31. The Tribunal awards PWGSC its reasonable costs incurred in preparing and proceeding with the complaint. Falcon’s arguments regarding the withholding of evidence by PWGSC are without merit, such that the Tribunal finds no reason to deviate from the general rule that costs be awarded to the successful party.^[25]
32. In determining the amount of the cost award in this complaint, the Tribunal has considered its Procurement Costs Guideline (the Guideline), which contemplates classification of the level of complexity of cases on the basis of three criteria: the complexity of the procurement, the complexity of the complaint and the complexity of the proceedings. The Tribunal’s preliminary indication is that this complaint case has a complexity level corresponding to the lowest level of complexity referred to in Annex A of the Guideline (Level 1). The complexity of the procurement was low, and was largely irrelevant to the issues in the complaint. The Tribunal finds that the complexity of the complaint was low, as the issues were straightforward and dealt with whether Falcon delivered its bid to the bid receiving unit. Finally, the complexity of the proceedings was low. The issues were addressed by the parties through documentary evidence and written representation, and a hearing was not necessary.
33. Accordingly, as contemplated by the Guideline, the Tribunal’s preliminary indication of the amount of the cost award is $1,150.

DETERMINATION

34. Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is not valid.
35. Pursuant to section 30.16 of the CITT Act, the Tribunal awards PWGSC its reasonable costs incurred in responding to the complaint, which costs are to be paid by Falcon. The Tribunal’s preliminary indication of the level of complexity for this complaint case is Level 1, and its preliminary indication of the amount of the cost award is $1,150. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Tribunal, as contemplated in article 4.2 of the Guideline. The Tribunal retains jurisdiction to establish the final amount of the award.