HEDDLE MARINE SERVICES INC.

HEDDLE MARINE SERVICES INC.
File No. PR-2014-067

Decision made
Monday, April 13, 2015

Decision issued
Tuesday, April 14, 2015

Reasons issued
Monday, April 27, 2015

TABLE OF CONTENTS

 

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

HEDDLE MARINE SERVICES INC.

AGAINST

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.

Peter Burn
Peter Burn
Presiding Member

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.
  2. Heddle Marine Services Inc. (Heddle) filed a complaint regarding a procurement (Solicitation No. F7049-140284/A) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of Fisheries and Oceans for the provision of docking, maintenance and alterations services for the Canadian Coast Guard Vessel (CCGS) Earl Grey.
  3. Heddle alleged that PWGSC stipulated a contract start date with which Heddle could not comply due to its geographic location, in violation of the non-discrimination provisions of Article 504 of the Agreement on Internal Trade.[3] In addition, Heddle alleged that PWGSC deemed its bid non-compliant by relying on an incorrect interpretation of a provision in the solicitation documents. Heddle requested that the contract awarded to the winning bidder be cancelled and awarded to Heddle or, in the alternative, that it be compensated for lost profits and lost opportunities. It also claimed costs relating to this complaint.
  4. On April 13, 2015, pursuant to subsection 30.13(1) of the CITT Act, the Tribunal decided not to conduct an inquiry into the complaint. The reasons for that decision are as follows.

ANALYSIS

  1. Heddle’s bid was rejected on the basis that it failed to comply with some of the mandatory requirements of the solicitation. Specifically, PWGSC advised Heddle that its bid did not meet the requirement pursuant to which work under the contract was to commence on March 11, 2015, as well as the requirement pursuant to which the CCGS Earl Grey was to be located at the contractor’s facilities as of March 11, 2015. On March 10, 2015, PWGSC advised Heddle as follows:

As you are aware, the solicitation requires that the Work must commence on March 11th, 2015. In addition, Annex A states specifically under Section 8.1.3 that the Work includes fulfilling the obligation of having the vessel located at the Contractor’s facility for the duration of the contract, which must begin at the latest on March 11th, 2015.

. . . 

Based on your response to the solicitation, Heddle Marine Services Inc.’s only shipyard or Contractor’s facility is located in Hamilton, Ontario. As announced in their Notice NO.1 – 2015, the St. Lawrence Seaway System will open their 2015 navigating season from Montreal to Lake Ontario on March 27, 2015. Therefore, it will be a physical impossibility for the CCGS Earl Grey located in the Maritimes to be located at your facilities in Hamilton for the first few days or weeks of the Contract. Consequently, your company cannot comply with the March 11th start date.[4]

Ground 1—Time Limits for Contesting Provisions in a Solicitation are not met

  1. Heddle’s first ground of complaint takes issue with PWGSC’s choice of the mandatory start date for the work under the contract. According to Heddle, PWGSC’s choice of March 11, 2015, as the start date of the work period discriminated against it on the basis of its geographic location, in violation of the AIT.
  2. As noted above, subsection 30.11(1) of the CITT Act provides that, subject to the Regulations, a potential supplier may file a complaint with 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. The Regulations set out further conditions to be met in order for the Tribunal to initiate an inquiry into a complaint.
  3. The conditions for inquiry include strict time frames within which complaints must be filed. Section 6 of the Regulations provides that a potential supplier generally has 10 working days after the day on which the basis of complaint became known or reasonably should have become known to it to either object to the relevant government institution or file a complaint with the Tribunal. Subsections 6(1) and (2) read as follows:

6.(1) Subject to subsections (2) and (3), a potential supplier who files a complaint with the Tribunal in accordance with section 30.11 of the Act shall do so 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.

(2) A potential supplier who has made an objection regarding a procurement relating to a designated contract 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.

  1. The solicitation in issue, published on December 18, 2014, set out mandatory work start and end dates in the following terms:

2.7 Work Period – Marine

Work must commence and be completed as follows:

Commence: March 1st, 2015

Complete: January 15th, 2016

. . . 

2.7.1 Additional Instructions to Work Period

From refit start date of March 1st, 2015 to January 15, 2016 the vessel will be unmanned during the work period and will be considered to be out of commission. The vessel during that period will be in the care and custody of the Contractor and under its control.[5]

[Emphasis added]

  1. Documents on record indicate that, on January 5, 2015, Heddle submitted a question during the tendering process regarding the work period and, specifically, how it relates to the St. Lawrence Seaway.[6] On January 9, 2015, PWGSC published Heddle’s question as part of amendment No. 003 to the solicitation. The question, together with PWGSC’s answer, read as follows:

Q-6

The work period for Solicitation F7049-140284 is to commence March 1st 2015 and [be] completed by January 15th 2016. The St. Lawrence Seaway historically opens late March and closes December 31st. Can the work period dates be adjusted so that shipyards west of the Seaway locks may bid on this project?

A-6

Due to operational constraints and limited vessel availability, the Work Period cannot be modified markedly. However, due [to] the overlapping Leonard J Cowley Invitation to Tender, the bid closing date has been extended to February 20th, 2015, and the Work Period start date to March 11th, 2015. The Work Period end date remains unchanged to January 15th 2016.[7]

  1. As a result, pursuant to amendment No. 003, PWGSC changed the start date of the work period in section 2.7 to March 11, 2015, as follows:

Work must commence and be completed as follows:

Commence: March 11th, 2015

Complete: January 15th, 2016[8]

  1. In addition, amendment No. 007, issued on January 19, 2015, amended clause 2.7.1 of the solicitation to reflect the new start date of the work period as follows:

From refit start date of March 11th, 2015 to January 15, 2016, the vessel will be unmanned during the work period and will be considered to be out of commission. The vessel during that period will be in the care and custody of the Contractor and under its control.[9]

  1. Having regard to the use of the word “must” in section 2.7 of the solicitation, reinforced by Q-6 and A-6 above, amendment No. 003 to section 2.7, as well as amendment No. 007 to section 2.7.1, the Tribunal finds that Heddle was aware or reasonably should have become aware of its ground of complaint at the latest on January 19, 2015.
  2. Accordingly, pursuant to subsections 6(1) and (2) of the Regulations, if Heddle considered that the mandatory start date of March 11, 2015, stipulated by PWGSC was discriminatory or otherwise contravened the provisions of the AIT, it was incumbent on it to either formally object to PWGSC or bring a complaint to the Tribunal within 10 working days of January 19, 2015, that is, by February 2, 2015, at the latest.
  3. Heddle did not formally object to PWGSC or file a complaint with the Tribunal by February 2, 2015. Instead, the information on the record indicates that, despite being aware of a potential issue resulting from the solicitation requirements, Heddle decided to submit a bid in which it “. . . advised [PWGSC] that it could accept the Vessel as soon as the Seaway opened in 2015, and also that it would guarantee that the Contract would be completed approximately one month ahead of schedule, by the time the Seaway closed for the winter . . .”[10] [underlining in original]. Having determined that the bid did not comply with the mandatory work period stipulated in the solicitation documents, PWGSC then rejected Heddle’s bid, in accordance with the mandatory requirements of the solicitation.
  4. Heddle’s “wait and see” course of action could not extend the deadlines for raising an objection or filing a complaint pursuant to section 6 of the Regulations. It is useful to recall the importance of the limitation periods inherent in the procurement regime under the CITT Act, described by the Federal Court of Appeal as follows:

[18] In procurement matters, time is of the essence. The time limits for the filing of a complaint are governed by section 6 of the Regulations. Subsection 6(1) requires potential suppliers to file complaints “not later than ten working days after the day on which the basis of the complaint became known or reasonably should have become known” to them (my emphasis). . . .

. . . 

[20] . . . potential suppliers are required not to wait for the attribution of a contract before filing any complaint they might have with respect to the process. They are expected to keep a constant vigil and to react as soon as they become aware or reasonably should have become aware of a flaw in the process. The whole procurement process, as is illustrated by the Question and Answer method which ensures that potential suppliers equally know at all times what conditions have to be met, is meant to be as open as it is meant to be expeditious. It is focussed on achieving finality of contracts in the best possible time.[11]

  1. In conclusion, when Heddle filed its complaint on April 10, 2015,[12] it missed the legislated time frames pursuant to subsections 6(1) and (2) of the Regulations. Accordingly, Heddle’s complaint on the first ground is time-barred.

Ground 2—No Reasonable Indication that the bid was Deemed Non-compliant in Breach of the Criteria of the Solicitation

  1. Heddle raised a second ground of complaint, alleging that PWGSC incorrectly relied on section 8.1.3 of the main specifications to reject its bid. This section provides as follows:

8.0 BERTHING, MOORING, DOCKING/UNDOCKING, VESSEL SECURITY

. . . 

8.1.3 The vessel must be located at the Contractor’s facility for the duration of the contract.[13]

  1. PWGSC relied on section 8.1.3 of the main specifications for the proposition that the solicitation included the “. . . obligation of having the vessel located at the Contractor’s facility for the duration of the contract, which must begin at the latest on March 11th, 2015.”[14] Heddle argued that section 8.1.3 of the main specifications “. . . has nothing to do with the Vessel’s date of arrival or the start date of the Contract, but rather simply stipulates that once the Vessel has arrived at the winning bidder’s facility, it must remain there for the duration of the Contract.”[15] Heddle stated that it was always its intention to comply with that requirement.
  2. In essence, Heddle alleges that PWGSC incorrectly interpreted the terms of the solicitation and that the terms did not in fact require that the vessel be located at the winning bidder’s location for the duration of the work period, starting March 11, 2015. As such, Heddle alleges that its bid was rejected in breach of the requirements of the solicitation.
  3. The Tribunal finds that Heddle’s understanding of section 8.1.3 of the main specifications is not supported by its terms, which specifically refer to the “duration of the contract”. In contrast, PWGSC’s interpretation of section 8.1.3 is supported by other provisions of the solicitation. In particular, section 2.7.1, cited in full above, indicated that the vessel would need to be “. . . in the care and custody of the contractor and under its control” from the refit start date of March 11, 2015, to the end of the work period on January 15, 2016.
  4. In any event, as explained previously, the Tribunal has found, on the basis of the mandatory language used in section 2.7 of the solicitation, Q-6 and A-6, and amendment Nos. 003 and 007, that the solicitation contained a mandatory requirement regarding the commencement of work on March 11, 2015, that Heddle can no longer challenge in light of the statutory time frames.
  5. Accordingly, the Tribunal finds, pursuant to paragraph 7(1)(c) of the Regulations, that the information included in the complaint discloses no reasonable indication that PWGSC misinterpreted the criteria of the solicitation or rejected Heddle’s bid inconsistently with those criteria and the requirements of the AIT.

DECISION

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

[1].      R.S.C., 1985, c. 47 (4th Supp.) [CITT Act].

[2].      S.O.R./93-602 [Regulations].

[3].      18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/index_en/ait.htm> [AIT].

[4].      Complaint, tab 2D-13.

[5].      Complaint, tab 2B-0.

[6].      PWGSC’s e-mail dated April 10, 2015; complaint, tab 2D-6, e-mail dated January 5, 2015, from Heddle to PWGSC.

[7].      Complaint, tab 2B-3.

[8].      Complaint, tab 2B-3.

[9].      Complaint, tab 2B-7 at 2.

[10].    Complaint, tab 1B – Schedule A at para. 39.

[11].    IBM Canada Ltd. v. Hewlett Packard (Canada) Ltd., 2002 FCA 284 (CanLII).

[12].    The Tribunal first received Heddle’s complaint on March 24, 2015. However, the Tribunal determined that the complaint did not meet the requirements of subsection 30.11(2) of the CITT Act, as it did not include a final response from PWGSC to the objection regarding the rejection of its bid made by Heddle on March 13, 2015. Following correspondence from the Tribunal, Heddle filed the final response from PWGSC, which indicated PWGSC’s intention to stand by its initial decision regarding Heddle’s bid, when the final response became available on April 10, 2015. The Tribunal accordingly considered that the complaint had met the requirements of subsection 30.11(2). Pursuant to section 96 of the Canadian International Trade Tribunal Rules, S.O.R./91-499, the complaint was considered filed on April 10, 2015.

[13].    Complaint, tab 2B-15C at 102.

[14].    Complaint, tab 2D-13. See, also, PWGSC’s letter dated April 10, 2015, confirming PWGSC’s intention to maintain its decision to reject Heddle’s bid.

[15].    Complaint, tab 1B - Schedule A at para. 54.