VALCOM CONSULTING GROUP INC.
v.
DEPARTMENT OF NATIONAL DEFENCE
File No. PR-2016-056

Determination and reasons issued
Wednesday, June 14, 2017

TABLE OF CONTENTS

• DETERMINATION
• STATEMENT OF REASONS
  • SUMMARY OF COMPLAINT
  • BACKGROUND
  • PRELIMINARY MATTERS
    • Motion Regarding the Tribunal’s Jurisdiction
    • Comment on DND’s Participation in These Proceedings
  • ANALYSIS OF VALCOM’S COMPLAINT
    • Trade Agreement Obligations for the Evaluation of Bids and the Awarding of Contracts
    • Valcom’s Complaint Is Valid
  • REMEDY
  • COSTS
  • DETERMINATION

 

IN THE MATTER OF a complaint filed by Valcom Consulting Group 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

VALCOM CONSULTING GROUP INC. Complainant

AND

THE DEPARTMENT OF NATIONAL DEFENCE 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 valid.

Pursuant to subsections 30.15(2) and (3) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal recommends that the Department of National Defence award Valcom Consulting Group Inc. the contract resulting from solicitation No. W8486-173369 under terms and conditions that would make it equivalent to those of the initial contract that was awarded to Valcom Consulting Group Inc. However, the Canadian International Trade Tribunal recommends that the scope of the new contract awarded to Valcom Consulting Group Inc. be adjusted as necessary to account for the fact that Valcom Consulting Group Inc. appears to have performed the initial contract in part and to deduct services, if any, that may have been rendered to the Department of National Defence by another supplier in the period between the termination of the initial contract and the entry into force of the new contract awarded to Valcom Consulting Group Inc., to the extent that such services rendered are no longer required by the Department of National Defence.

Furthermore, in the event that the Department of National Defence deducts from the new contract to be awarded to Valcom Consulting Group Inc. any such services rendered by a different supplier since the termination of the initial contract held by Valcom Consulting Group Inc. and that would otherwise have been rendered by Valcom Consulting Group Inc., the Tribunal recommends that Valcom Consulting Group Inc. be compensated for lost profits with respect to such services. The parties should arrive at an appropriate amount of compensation within 60 days of the issuance of this determination and submit their agreement to the Canadian International Trade Tribunal. Should they be unable to agree, the Canadian International Trade Tribunal will ask the parties to file submissions at 15-day intervals, beginning with Valcom Consulting Group Inc., on the recommendation that the Canadian International Trade Tribunal should make regarding the quantum of compensation to be paid in respect of services delivered over that period, if any.

The Canadian International Trade Tribunal also recommends that the Department of National Defence cancel solicitation No. W8486-174011 and that it reimburse Valcom Consulting Group Inc. for the costs incurred in preparing its response to solicitation No. W8486-174011. The parties should agree on an appropriate amount for bid preparation costs within 60 days of the issuance of this determination and submit their agreement to the Canadian International Trade Tribunal. Should they be unable to agree, the Canadian International Trade Tribunal will ask the parties to file submissions at 15-day intervals, beginning with Valcom Consulting Group Inc., on the recommendation that the Canadian International Trade Tribunal should make regarding the quantum of costs.

Ann Penner
Ann Penner
Presiding Member

Tribunal Panel: Ann Penner, Presiding Member

Support Staff: Courtney Fitzpatrick, Counsel
Anja Grabundzija, Counsel

Complainant: Valcom Consulting Group Inc.

Government Institution: Department of National Defence

Counsel for the Government Institution: Helene Robertson

Please address all communications to:

The Registrar
Secretariat to the 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 3, 2017, Valcom Consulting Group Inc. (Valcom) filed a complaint with the Canadian International Trade Tribunal (the Tribunal) pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act^[1] concerning a Request for Proposal (RFP) (Solicitation No. W8486-173369) issued by the Department of National Defence (DND), under the framework of the Task and Solutions Professional Services supply arrangement (E60ZN-15TSPS). The RFP was for the services of one senior technician under the technical engineering and maintenance services stream.  
2. The Tribunal accepted the complaint for inquiry on February 8, 2017, as it met the requirements of subsection 30.13(1) of the CITT Act and the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations.^[2]
3. The Tribunal conducted an inquiry into the validity of the complaint as required by sections 30.13 to 30.15 of the CITT Act.
4. For the reasons set out below, the Tribunal finds that Valcom’s complaint is valid.

SUMMARY OF COMPLAINT

5. Valcom argued that DND made an unjustified and unwarranted decision by terminating the contract it was initially awarded as the successful bidder in the RFP process, and retendering the contract.
6. As a remedy, Valcom requested that its contract be reinstated under the original terms and conditions or, in the alternative, that it be compensated for lost profits and lost opportunity. Valcom also requested reimbursement of its bid preparation costs and of the costs incurred as a result of the termination of the contract that it had initially been awarded. It also requested its costs incurred in preparing a response to the retendering of the contract.  

BACKGROUND

7. DND issued the RFP on October 24, 2016, with a closing date of November 15, 2016. According to the RFP, the intent was to award one contract with a duration of three years, with options to extend the contract for two additional one-year periods.^[3]
8. DND received four bids, including that of Valcom. The evaluators determined that only Valcom’s bid complied with the mandatory criteria of the RFP.^[4]  
9. On December 14, 2016, the contract was awarded to Valcom. The initial period of the contract was from December 28, 2016, to December 25, 2019, inclusively.^[5]
10. However, on January 23, 2017, DND issued a “Stop Work Order” along with a notice of termination of the contract.^[6]
11. The e-mail accompanying the notice of termination and “Stop Work Order” informed Valcom that “[v]arious concerns have been raised with regards to solicitation process W8486-173369 for senior technician services” and that DND was terminating Valcom’s contract “in order to maintain the integrity of the competitive process”. DND also wrote that Valcom would be notified of a new retendering process.^[7]
12. On January 25, 2017, Valcom expressed its concerns about the decision to terminate the contract to DND and requested a detailed explanation in this regard.
13. DND answered on February 1, 2017, that under the terms of the contract it had with Valcom “the Crown had the right to terminate the contract in conformity with the termination clauses found in the contract.”^[8] It provided no further explanation.
14. Valcom filed this complaint on February 3, 2017, and the Tribunal accepted it for inquiry on February 8, 2017.
15. On March 3, 2017, DND filed a motion pursuant to Rule 24 of the Canadian International Trade Tribunal Rules^[9] for an order of the Tribunal ceasing the inquiry, on the basis that the Tribunal lacked jurisdiction over the subject matter of the complaint. Valcom filed a response on March 12, 2017. Although it was afforded an opportunity to do so, DND did not file a reply.
16. The Tribunal denied DND’s motion on March 20, 2017, and indicated that the statement of reasons for its order would form part of the statement of reasons on the validity of the complaint.
17. On March 30, 2017, DND filed its Government Institution Report (GIR) pursuant to Rule 103 of the CITT Rules.
18. On April 11, 2017, Valcom filed its comments on the GIR in accordance with Rule 104 of the CITT Rules.
19. On April 12, 2017, the Tribunal requested further information from DND because the GIR did not provide sufficient information. In its request, the Tribunal asked specific questions regarding the evaluation of the responses to the RFP. Specifically, the Tribunal requested information on the circumstances that led to the re-evaluation of the non-compliant responses, the reasons why the non-compliant responses were later found to be compliant, and precisely how the re-evaluations were carried out. The Tribunal also asked DND to confirm whether it had issued, or intended to issue, a new request for proposals in regard to the technical engineering and maintenance services that were the subject of the RFP.
20. DND provided responses to the Tribunal’s questions on April 20, 2017. Valcom commented on DND’s responses on April 25, 2017.
21. On May 1, 2017, the Tribunal again wrote to DND to request further information as DND’s letter of April 20, 2017, did not fully answer the Tribunal’s earlier request. The Tribunal included further specific questions.
22. DND answered on May 3, 2017. Valcom provided its comments on May 4, 2017.
23. Given that the parties were afforded multiple opportunities to file submissions and evidence, and given that no oral hearing was requested, the Tribunal disposed of the matter on the basis of the written record.

PRELIMINARY MATTERS

Motion Regarding the Tribunal’s Jurisdiction

24. DND argued that the complaint relates to the termination of an awarded contract and, as such, is outside the jurisdiction of the Tribunal. It submitted that the Tribunal’s jurisdiction is limited to aspects of the procurement process relating to a designated contract, and that it has no role in supervising the administration of contracts that have been awarded.
25. Valcom submitted that, by DND’s own admission, the termination of the awarded contract was the result of concerns raised in the solicitation process. Valcom added that DND’s submissions suggest that it still has a need for the services that were the subject of the RFP and that a retendering of the same requirement without valid reasons would come “at great expense to the taxpayer and private industry”.^[10]

Analysis

26. As noted above, on March 20, 2017, the Tribunal denied DND’s motion to cease its inquiry into the complaint.
27. Pursuant to subsection 30.11(1) of the CITT Act, 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. A “designated contract” is defined as “a contract for the supply of goods or services that has been or is proposed to be awarded by a government institution and that is designated or of a class of contracts designated by the regulations” pursuant to section 30.1 of the CITT Act.
28. The Tribunal is therefore mandated to hear complaints from potential suppliers regarding “any aspect of the procurement process” that relates to a designated contract. DND did not contest that the complaint relates to a designated contract within the meaning of the CITT Act and the Regulations.
29. While the Tribunal agrees with DND that complaints about the administration of a contract that has been awarded are beyond the Tribunal’s jurisdiction, the Tribunal finds that DND has misconstrued the subject matter of this complaint.
30. The Agreement on Internal Trade^[11] and the North American Free Trade Agreement^[12], both of which are applicable to the RFP, provide that the procurement process “begins after an entity has decided on its procurement requirement and continues through the contract award.”^[13] Furthermore, the AIT specifies that “procurement procedures” means “the processes by which suppliers are invited to submit a tender, a proposal, qualification information, or a response to a request for information and includes the ways in which those tenders, proposals or information submissions are treated.”^[14]
31. In light of these provisions, the Tribunal has held that the beginning of the procurement process is the moment in time when the contracting authority has decided on its procurement requirements and that the procurement process only comes to an end once the contract has been attributed in a definitive way. As such, the trade agreements and the Tribunal’s jurisdiction encompass all elements of the procurement cycle up to and including contract award.
32. Conversely, contract administration is a separate phase that takes place after the procurement process has been completed and deals with issues that arise as a contract is performed and managed. Issues of contract administration are beyond the scope of the Tribunal’s jurisdiction.^[15]
33. Valcom’s complaint pertains squarely to the procurement process followed in respect of the designated contract subject to the RFP. The initial award of the contract to Valcom was, by DND’s own admission, reconsidered because of “various concerns” with the underlying “solicitation process” and “in order to maintain the integrity of the competitive process”.^[16]
34. In its complaint, Valcom contested the existence of such “concerns” with the solicitation process and argued that it was rightly awarded the contract. In other words, Valcom’s complaint relates to the “ways in which . . . tenders . . . [were] treated” by DND in the context of the RFP. To be clear, this inquiry is not concerned with DND’s right to terminate its contract with Valcom pursuant to the clauses of that contract, but rather with DND’s obligations pursuant to the trade agreements to Valcom, as a bidder in the procurement process relating to the designated contract.
35. Given that the complaint concerns aspects of the procurement process, the mere fact that the procurement process appears to have continued beyond the initial award of the contract does not deprive the Tribunal of jurisdiction. The information before the Tribunal relating to the “various concerns [that] have been raised with regards to [the RFP]” indicates that DND re-engaged the procurement process after awarding the contract to Valcom,^[17] and that these actions were integral to the procedures followed in respect of the designated contract. In fact, by DND’s own admission, concerns about the procurement process caused it to retract Valcom’s contract and retender the requirement. In such circumstances, the fact that the procurement process continued beyond the initial award of a contract cannot allow DND to eschew the disciplines of the trade agreements.
36. Article 1015(4)(c) of NAFTA provides that, “unless the entity decides in the public interest not to award the contract, the entity shall make the award to the supplier that has been determined to be fully capable of undertaking the contract and whose tender is either the lowest-priced tender or the tender determined to be the most advantageous in terms of the specific evaluation criteria set out in the notices or tender documentation.” Both the Tribunal and the Federal Court have held that Article 1015(4)(c) of NAFTA should be interpreted to mean that, in situations where there is a compliant bidder, the government institution is obligated to award a contract unless there is a sound public policy reason to cancel the solicitation.^[18] Whether or not DND acted consistently with Article 1015(4)(c) when it decided to revoke the award of the contract to Valcom and retender the requirement properly forms part of the subject matter of this complaint.
37. For the foregoing reasons, the Tribunal has jurisdiction to inquire into this complaint.   

Comment on DND’s Participation in These Proceedings

38. Even though the Tribunal denied DND’s motion on March 20, 2017, DND continued to repeat its arguments on jurisdiction in its GIR and further correspondence. This behaviour was frustrating and troubling for the Tribunal and cannot go without comment.
39. The contents of DND’s GIR were essentially limited to a repetition of its jurisdictional argument and included only incomplete information on the issue at the heart of this complaint. In particular, the GIR provided no information on the steps taken subsequent to the initial award to Valcom other than to state that, “[f]ollowing the award of the contract, DND undertook a review of the three unsuccessful bids and determined that two of the other bids were indeed compliant” and to conclude that, since their prices were lower than Valcom’s, the contract had been improperly awarded.^[19] DND provided no details as to why the review was undertaken or what errors it found in its initial evaluation of the bids.
40. Furthermore, DND’s GIR did not comply with Rule 103 of the CITT Rules, which provides, inter alia, that a GIR “shall contain . . . all . . . documents relevant to the complaint; a statement that sets out all findings, actions and recommendations of the government institution and responds fully to all allegations of the complaint; and any additional evidence or information that may be necessary in order to resolve the complaint.”
41. In fact, the Tribunal had to send two letters to DND following the GIR in order to obtain information about the procurement process challenged by Valcom’s complaint.^[20] Here again, the Tribunal must highlight DND’s lack of transparency. The information that was eventually provided by DND was offered piecemeal, requiring the Tribunal to reconcile bits of information before it. More importantly, some information provided by DND in response to the Tribunal’s letters appeared inconsistent with earlier statements made by DND in its GIR.
42. Government institutions and their counsel have a duty to be forthcoming in their submissions in the Tribunal’s inquiries.^[21] This is a key premise of the Tribunal’s inquiries under the CITT Act and the trade agreements, which impose very short time frames for the filing of complaints, the exchange of submissions between the parties, the convening of an oral hearing (if necessary) and for the Tribunal to deliberate on a complaint and render its findings and recommendations. In particular, the CITT Rules, quoted above, impose on government institutions a significant duty of transparency and cooperation in respect of the provision of documentary evidence. DND’s response to this complaint falls short of the required standard of transparency.
43. DND continued to resist the Tribunal’s decision on the jurisdictional issue from the time it was issued on March 20, 2017, to its last correspondence on record. On May 3, 2017, it noted that “[i]nformation provided to the Tribunal in response to its requests should not be construed as attornment to jurisdiction, but is intended solely to assist the Tribunal with some context.”^[22] DND’s disclaimer is misplaced.
44. The Tribunal’s jurisdiction is fixed in an Act of Parliament. It can neither be expanded nor restricted by consent or attornment of a government institution responding to a complaint brought by a potential supplier. Furthermore, the Tribunal has jurisdiction to interpret its home statute, including its jurisdictional confines. In this case, DND raised a challenge to the Tribunal’s jurisdiction, and the Tribunal pronounced. DND may challenge the Tribunal’s decision on judicial review. However, pending such a successful challenge, DND cannot use repeated objections to the Tribunal’s jurisdiction to delay the inquiry and flout the rules applicable to the inquiry process.

ANALYSIS OF VALCOM’S COMPLAINT

45. Subsection 30.14(1) of the CITT Act requires that, in conducting an inquiry, the Tribunal limit its considerations to the subject matter of a complaint. At the conclusion of the inquiry, the Tribunal must determine whether a 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 AIT and NAFTA.
46. As noted above, Valcom argued that retendering this contract was unjustified and unwarranted, as Valcom was the lowest-priced compliant bidder and should therefore properly be awarded the contract. At issue in this complaint, then, is DND’s evaluation of the bids received in response to the RFP, and particularly its re-evaluation of two bids that were initially found to be non-compliant. In direct connection to this evaluation, Valcom’s complaint also concerns DND’s decision to revoke the award of the contract to Valcom and to retender the requirement.
47. The Tribunal must therefore determine whether DND’s decisions to re-evaluate the bids and then move to a retendering process were in keeping with the trade agreements.

Trade Agreement Obligations for the Evaluation of Bids and the Awarding of Contracts

48. The trade agreements stipulate that, to be considered for contract award, a bid must conform to the essential requirements set out in the tender documentation and require that procuring entities award contracts in accordance with the criteria and essential requirements specified in the tender documentation.
49. For instance, Articles 1015(4)(a) and (d) of NAFTA provide that “(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 that “(d) awards shall be made in accordance with the criteria and essential requirements specified in the tender documentation.” Article 506(6) of the AIT provides that “[t]he tender documents shall clearly identify the requirements of the procurement, the criteria that will be used in the evaluation of bids and the methods of weighting and evaluating the criteria.”
50. Furthermore, Article 1015(4)(c) of NAFTA provides that, “unless the entity decides in the public interest not to award the contract, the entity shall make the award to the supplier that has been determined to be fully capable of undertaking the contract and whose tender is either the lower-priced tender or the tender determined to be the most advantageous in terms of the specific evaluation criteria set out in the notices or tender documentation.” As mentioned previously in these reasons, both the Tribunal and the Federal Court have held that Article 1015(4)(c) of NAFTA should be interpreted to mean that, in situations where there is a compliant bidder, the government institution is obligated to award a contract unless there is a sound public policy reason to cancel the solicitation.^[23]
51. When considering whether bids are evaluated in keeping with these provisions, the Tribunal applies the standard of reasonableness, typically according a great deal of deference to an evaluation panel with respect to its evaluation of proposals. The Tribunal does not, therefore, generally substitute its judgment for that of the evaluators, unless the evaluators have not applied themselves in evaluating a bidder’s proposal, have ignored vital information provided in a proposal, have based their information on undisclosed criteria or have otherwise not conducted the evaluation in a procedurally fair way.^[24]
52. Consistent with these principles, the Tribunal has also found that, upon discovery of errors in the evaluation process, a contracting authority must take appropriate steps to correct such errors, in keeping with the terms of the solicitation and in a manner that preserves the integrity of the competitive procurement process.^[25] Thus, where evaluators become aware of errors in their initial evaluation and take appropriate steps to correct them, they ensure that the procurement process is carried out in compliance with the trade agreements.
53. It is also well established that procuring entities must evaluate a bid’s conformance with mandatory requirements thoroughly and strictly.^[26] The requirement for a bid to demonstrate compliance with all mandatory criteria cannot be abridged or left to inference.^[27]  
54. Finally, the Tribunal has also been clear that bidders bear the onus of demonstrating that their bids meet the mandatory criteria of a solicitation. In other words, bidders bear the responsibility of “connecting the dots” – they must take care to ensure that any and all supporting documentation in their bids clearly demonstrates compliance. As such, while the Tribunal has encouraged evaluators to resist making assumptions about a bid,^[28] ultimately, it is incumbent upon the bidder to exercise due diligence in the preparation of its proposal to ensure that it is unambiguous and properly understood by the evaluators.^[29]
55. All of these principles are relevant to the complaint at issue as will be discussed below.

Valcom’s Complaint Is Valid

56. As mentioned above, DND initially found three of the four bids it received in response to the RFP to be non-compliant. All three of those bids were lower-priced than Valcom’s bid. Valcom, the only compliant bidder, was awarded the contract on December 14, 2016.
57. Upon learning that Valcom received the contract award, two of the unsuccessful bidders objected to DND, alleging that DND erred in its evaluation of their bids. During this process, these two parties provided DND with some further information. As a result, DND reviewed the non-responsive bids. Following its re‑evaluation, and citing concerns with the procurement process, DND terminated the contract with Valcom and retendered the requirement on March 10, 2017.
58. The Tribunal finds that, in this case, DND acted appropriately after hearing from two unsuccessful bidders by re-evaluating their bids. It took steps to determine whether there was merit to the objections of the unsuccessful bidders, and to confirm whether the contract was appropriately awarded to Valcom.^[30]
59. Nevertheless, the evidence indicates that DND’s re-evaluation of those bids was unreasonable. It neither corrected errors in the initial evaluation nor preserved the integrity of the competitive procurement process. Instead, the opposite was true: DND’s re-evaluation of two bids led to an erroneous result, in that DND cancelled the contract that had been properly awarded to Valcom. The evidence before the Tribunal reveals that, as per the original evaluation, Valcom was the only compliant bidder and, as such, should have been allowed to proceed with the work it was awarded on the basis of the terms of the RFP.
60. The Tribunal will examine DND’s explanations regarding each of the two non-compliant bids in turn.

Bid B^[31]  

61. The report of the initial consensus evaluation indicates that the three evaluators in charge of the technical bid evaluation found this bid non-responsive on the following grounds:

    Mandatory Criteria Two (MT.2): did not meet this criteria because the College years were used as years of experience in Project 1 for MT 2, MT 4, and MT 5.^[32]

62. Mandatory Criterion 2 provided as follows:

    Education and Experience
    MT.2	EDUCATION AND/OR EXPERIENCE The proposed resource must have a minimum of a secondary school diploma/certificate plus a minimum of eight (8) years experience as a technician. OR Five (5) years experience as a material technician with responsibilities such as, welding, machining, woodworking, painting sheet metal work, painting, work with textiles (sewing), fibreglass and composite.	EDUCATION This must be demonstrated by including a copy of the certificate/diploma. EXPERIENCE At a minimum, the following must be provided: Name and description of where experience has been gained; Timeframe (from-to-dates month/year); and Description of the roles and responsibilities.

63. In the GIR, DND claimed that two of the bids (including Bid B) initially deemed non-compliant “were indeed compliant”.^[33] It provided no further information as to the reasons of this change of evaluation.
64. In its response to the Tribunal’s first letter requesting further information, DND indicated that, in its objection to DND, this “bidder alleged DND had incorrectly assumed its proposed project resource had obtained his work experience in the course of his college studies, when in fact the work experience had been obtained via separate employment undertaken concurrently with his studies.” DND went on to explain that this correspondence led it to review its initial evaluation of non-compliance of this bid:

    . . . DND concluded that it had incorrectly assumed that the proposed project resource must have obtained his work experience via his college studies, when in fact the experience could have been obtained via separate employment during the same time period as his studies. DND sought to confirm information from the non-compliant bidder to validate this work experience, but the requested information was never received. Accordingly, the most DND could conclude was that it had erred and that this proposal may have been compliant. Compliance could not be confirmed without the additional information.^[34]

    [Emphasis added]

65. While DND’s letter dated April 20, 2017, was non-specific, the Tribunal was able to relate this statement to Bidder B on the basis of the evidence. In its second letter to DND, dated May 1, 2017, the Tribunal asked DND to clarify its statement that it “incorrectly assumed” that the proposed resource obtained his work experience via his college studies. It also asked DND to explain the earlier statement in the GIR that two bids “were indeed compliant”.  
66. In its response to the Tribunal’s second letter, DND explained that “the proposal was deemed more likely than not to be compliant, and the GIR statement refers to that balance-of-probabilities determination”^[35] [emphasis added]. DND provided no further explanation or evidence.
67. As such, the Tribunal finds that the additional information submitted by DND is inconsistent with its earlier statement in the GIR that two bids “were indeed compliant”. The Tribunal finds this particularly concerning.
68. Moreover, the Tribunal finds on the evidence before it that DND had no reasonable basis to change its initial assessment that this bid was non-compliant. The consensus evaluation report reveals that Bid B did not clearly demonstrate experience in accordance with the terms of the RFP. The additional information provided by DND does not contradict the initial conclusion. In fact, the additional information confirms that the compliance of this bid with the mandatory criterion in question “could not be confirmed”.
69. The standard for evaluating bids against mandatory criteria is not one of a balance of probabilities. As stated at the outset of this analysis, bids must be evaluated thoroughly and strictly for compliance. It is not enough that a bid “may have been” compliant or was “more likely than not” compliant. A bid is either compliant or it is not.
70. Thus, a conclusion that it is not clear whether a bid is compliant is a conclusion that the bid is non‑compliant. The onus to show compliance rests on the bidder; it is not incumbent on, or permissible for, government institutions to give bidders the benefit of the doubt where compliance cannot be clearly established. The evidence before the Tribunal indicates that Bidder B did not ensure that its bid demonstrated compliance with the terms of the RFP. This is inconsistent with Mandatory Criterion 2, which required detailed demonstration of the relevant work experience.^[36]
71. Thus, the Tribunal finds that DND’s re-evaluation of Bidder B as compliant with Mandatory Criterion 2 was not the correction of a mistake in the initial evaluation, but rather an inappropriate lowering of the standard of compliance with mandatory criteria that must be applied in the evaluation of all bids. As a result, this bid was appropriately disqualified by the evaluators in the initial evaluation and should have remained disqualified.

Bid A

72. The consensus evaluation report noted that Bid A was non-compliant with Mandatory Criteria 3 and 5. In the GIR and subsequent submissions to the Tribunal, DND argued that Bid A was in fact compliant with these criteria.   

–        Mandatory Criterion 3

73. Mandatory Criterion 3 provided as follows:

    MT.3

    WELDING PROFICIENCY The proposed resource must have a valid welding certification within the previous five (5) years from: i.The Canadian Welding Bureau; or, ii.The Technical Standards & Safety Authority; or, iii.Another recognized welder qualification institution.

    This must be demonstrated by including a copy of the qualification/certification with the bid.

74. The consensus evaluation report included the following note regarding Bid A:

    Mandatory Criteria Three (MT.3): the expiry date of the “Welder Qualification” is not clear; a request from the contractor but there was no response.^[37]

75. As noted previously, in the GIR, DND claimed that two of the bids initially deemed non-compliant “were indeed compliant”.^[38] However, neither the GIR nor even DND’s letter dated April 20, 2017, which responded to the Tribunal’s first letter requesting further information, contained any discussion of the re‑evaluation of Bid A against Mandatory Criterion 3.
76. Following the Tribunal’s second letter requesting additional information, DND provided the following explanation with respect to Mandatory Criterion 3:

    The bidder was also compliant with the other mandatory requirement (MT 3), as demonstrated by a legible copy of the previously-provided Welder Certification.^[39]

77. DND’s letter included supporting evidence consisting of relevant passages of Bid A and the correspondence received from Bidder A objecting to the evaluation of its bid.  
78. On the basis of the evidence before it, the Tribunal finds that the evaluation panel’s initial conclusion that Bid A was non-compliant with Mandatory Criterion 3 was reasonable, and that DND had no basis to change the initial evaluation.
79. The evidence shows that Bid A included copies of certificates as per Mandatory Criterion 3. However, the evaluation panel found that the supporting documentation in the bid was not clear as to whether the proposed resource had the necessary experience within the requisite time frame (i.e., the previous five years). This conclusion was reasonable in light of the passages of Bid A provided by DND to the Tribunal, and which the Tribunal examined.
80. Furthermore, the evaluators appear to have requested clarification from the bidder during the evaluation to no avail. In this regard, the consensus evaluation report included the following note: “a request from the contractor but there was no response.” This note is ambiguous. However, the Tribunal finds that the only reasonable interpretation of the ambiguous note is that the evaluators requested that the potential contractor clarify the information included in its bid, but the contractor provided no response to that request.
81. This evidence indicates to the Tribunal that, not only did Bidder A fail to carry out the required due diligence to ensure that its bid clearly demonstrated compliance, it also failed to respond to DND’s request for clarification when one was sought.
82. DND could then only have evaluated Bid A on the basis of the information provided in it, which was unclear. The initial evaluation panel’s conclusion of non-compliance with Mandatory Criterion 3 was entirely reasonable.
83. DND later decided to change this initial evaluation on the basis of a “legible copy of the previously-provided Welder Certification”. The Tribunal finds DND’s reliance on this “legible copy” to change its initial evaluation unreasonable for two reasons.
84. First, having examined the additional copy of the certificate provided to DND, the Tribunal finds it hard to see how this new image would have changed the evaluators’ initial assessment, as the year appearing on the certificate remains unclear. DND did not provide any explanations in this regard.
85. Second, the evidence shows that this “legible copy” was provided as part of the correspondence Bidder A sent to DND when it objected to the results of the procurement process. In other words, this “legible copy” was provided after the conclusion of the evaluation and after the announcement of the award of the contract to Valcom.
86. The Tribunal presumes, for the purposes of the analysis, that this new copy of the certificate may have been considered a simple clarification of information already contained in Bid A, rather than impermissible bid repair, had it been provided in a timely manner after DND requested clarification.^[40] Indeed, it is not necessary in this case to draw the precise line between the two categories, as the purported clarification was in any event provided by Bidder A too late to be taken into consideration.
87. Section 16 of the document “2003 (2016-04-04) Standard Instructions – Goods or Services – Competitive Requirements” was incorporated by reference into and formed part of the RFP.^[41] It contained provisions governing verifications and clarifications, which read as follows:

    1.  In conducting its evaluation of the bids, Canada may, but will have no obligation to, do the following:
       1. Seek clarification or verification from bidders regarding any or all information provided by them with respect to the bid solicitation;

       . . .

    2.  Bidders will have the number of days specified in the request by the Contracting Authority to comply with any request related to any of the above items. Failure to comply with the request may result in the bid being declared non-responsive.

    [Emphasis added]

88. The evidence provided by DND to the Tribunal does not indicate whether the evaluators specified a number of days in their request to Bidder A for clarification, as contemplated by the Standard Instructions. Nevertheless, the evidence clearly shows that “no response” was provided by Bidder A at any point during the evaluation process, as noted by the evaluators in their report. DND therefore had no option but to evaluate Bid A on the sole basis of the information included in it.
89. Indeed, in such circumstances, the Tribunal cannot accept as consistent with the procurement regime DND’s decision to allow Bidder A to provide its purported clarification after the evaluation process was concluded, and after it was advised of the fact that it had not been successful. As the Federal Court of Appeal has held, the entire procurement process is designed to be “as open as it is meant to be expeditious” and is focused on achieving “finality of contracts in the best possible time”.^[42] In such a system, bidders are expected to “keep a constant vigil” and are generally forbidden from waiting for the attribution of a contract to address any issues they may have with the procurement process.^[43] Allowing clarifications of bids at such a belated stage as permitted here by DND is contrary to the entire philosophy and design of the procurement regime, and does not serve the interests of efficiency, integrity, and competition amongst bidders on a level playing field^[44] in the procurement process.
90. Therefore, the Tribunal finds the evaluation panel’s initial assessment to be reasonable in that Bidder A’s certificate was unclear. As Bidder A did not ensure that the supporting documentation in its bid clearly showed compliance with the terms of the RFP, and further even failed to respond to the request for clarification that was extended to it by DND’s evaluators, its bid was properly found to be non-compliant with Mandatory Criterion 3. The additional “legible copy” provided by Bidder A to DND after the award of the contract to Valcom, the only compliant bidder, was, at best, a clarification that came outside of any acceptable time frames. As such, this additional copy provided no reasonable basis for DND to find Bid A compliant with Mandatory Criterion 3 after the fact.  

–        Mandatory Criterion 5

91. The report of the consensus evaluation noted that Bid A was also non-compliant with Mandatory Criterion 5:

    Mandatory Criteria Five (MT.5): the resume demonstrated only 34 months in the last 5 years of experience (2 years & 10 month – Engineering Drawing Experience) and 3 years of experience in the last 5 years were required for this job.^[45]

92. Mandatory Criterion 5 provided as follows:

    MT.5

    ENGINEERING DRAWING EXPERIENCE The proposed resource must have three (3) years of experience, within the last five (5) years, reading and interpreting engineering drawings.

    At a minimum, the following must be provided: Name and description of where experience has been gained; Timeframe (from-to-dates month/year); and Description of the roles and responsibilities.

93. The Tribunal finds that Bid A was compliant with Mandatory Criterion 5. The explanations submitted with DND’s letter dated May 3, 2017, along with the supporting evidence in that regard, show that the evaluation panel miscalculated the number of months of relevant experience shown in Bidder A’s bid. On its face, Bid A clearly demonstrated that the proposed resource had the necessary experience.
94. Therefore, DND reasonably corrected its evaluation of Bid A against Mandatory Criterion 5. Bid A should nevertheless have remained disqualified due to its non-compliance with Mandatory Criterion 3, as discussed in the previous section.

Conclusion on DND’s Re-evaluation and Revocation of the Award of the Contract to Valcom

95. Having reviewed the submissions and evidence provided by DND, the Tribunal finds that DND breached Articles 1015(a), (c) and (d) of NAFTA and 506(6) of the AIT when it re-evaluated the non-compliant proposals and decided to revoke the contract awarded to Valcom on the basis of this re-evaluation. 
96. At no point in these proceedings did DND claim that Valcom’s bid was not compliant. Furthermore, the evidence indicates that DND continues to require the services that were the subject of the RFP, and that DND has at no point provided any reason for cancelling the initial award to Valcom other than the erroneous re-evaluation of the unsuccessful bids. In such circumstances, DND is required, consistent with Article 1015(4)(c) of NAFTA, to award the contract to Valcom, the winning bidder, in a definitive manner.

REMEDY

97. Having found Valcom’s complaint to be valid, the Tribunal must determine the appropriate remedy, in accordance with subsections 30.15(2) to (4) of the CITT Act.
98. Valcom requested that the Tribunal recommend that its contract be reinstated under the original terms and conditions or, in the alternative, that it be compensated for lost profits and lost opportunity. Valcom also requested its bid preparation costs for its bid in response to the RFP and reimbursement of the costs incurred as a result of the termination of the contract that it had been awarded. In addition, it requested the costs associated with the resolicitation of this requirement.^[46]
99. DND did not address the issue of remedy.
100. To recommend a remedy, the Tribunal must consider all the circumstances relevant to the procurement in question, including the following: (1) the seriousness of the deficiencies found; (2) the degree to which the complainant and all other interested parties were prejudiced; (3) the degree to which the integrity and efficiency of the competitive procurement system was prejudiced; (4) whether the parties acted in good faith; and (5) the extent to which the contract was performed.
101. In this case, the trade agreements were breached when DND unreasonably re-evaluated two proposals and decided on this basis to retract the contract awarded to Valcom. This breach is a serious deficiency because the evaluation of proposals in accordance with the mandatory criteria stated in a bid solicitation is at the heart of the scheme established under the CITT Act and the applicable trade agreements.
102. Valcom was seriously prejudiced by this breach, as it lost its properly awarded contract: one that it had already started to perform. The breach in question also had a negative impact on the integrity and efficiency of the process, as it caused DND to pointlessly issue a new solicitation in replacement of the RFP, causing unnecessary delay and expense for all parties involved.
103. That said, while the Tribunal has expressed concerns about DND’s conduct in this inquiry, there is no indication that any party acted in bad faith with respect to the procurement process in issue. The Tribunal assumes the good faith of the parties and considers accusations of bad faith to go well beyond procedural irregularities or failures.
104. Finally, the Tribunal takes into account the fact that Valcom’s contract was in place for a brief period prior to its termination, and that the record before it is silent as to whether any other supplier, since the termination, has provided DND with the services that would otherwise have been provided by Valcom. The evidence available to the Tribunal indicates that no contract has yet been awarded further to the resolicitation conducted by DND.^[47]
105. Under these circumstances, the Tribunal finds that the appropriate remedy would be to award Valcom the contract resulting from the RFP under terms and conditions that would make it equivalent to the initial contract that was awarded to Valcom, which was for a duration of three years, with options to extend the contract for two additional one-year periods.^[48] However, the Tribunal recommends that the scope of the new contract awarded to Valcom be adjusted as necessary to account for the fact that Valcom appears to have performed the initial contract in part (according to the evidence, Valcom briefly delivered the services pursuant to the initial contract from December 28, 2016, to January 23, 2017) and to deduct any services that may have been rendered to DND by another supplier for the period of time between the termination of Valcom’s initial contract and the entry into force of Valcom’s new contract, to the extent that any such services rendered are no longer required by DND.
106. Furthermore, in the event that another supplier has provided services to DND that would have been provided by Valcom under the original contract, and that such services rendered are deducted from the scope of the new contract awarded to Valcom in accordance with the Tribunal’s first recommendation, the Tribunal recommends that Valcom be compensated for lost profits with respect to such services. The parties should arrive at an appropriate amount of compensation within 60 days of the issuance of the Tribunal’s determination and submit their agreement to the Tribunal. Should they be unable to agree, the Tribunal will ask the parties to file submissions at 15-day intervals, beginning with Valcom, on the recommendation that the Tribunal should make regarding the quantum of compensation to be paid to Valcom for services delivered over that period, if any.
107. The Tribunal also recommends that DND cancel solicitation No. W8486-174011, which DND identified as the new solicitation issued to replace the RFP.^[49] Finally, applying the principle that a successful complainant should be restored to the same situation it would have been in had the trade agreements not been breached, the Tribunal recommends that DND compensate Valcom for the costs incurred in preparing its response to solicitation No. W8486-174011. The parties should agree on an appropriate amount for bid preparation costs within 60 days of the issuance of the Tribunal’s determination and submit their agreement to the Tribunal. Should they be unable to agree, the Tribunal will ask the parties to file submissions at 15-day intervals, beginning with Valcom, on the recommendation that the Tribunal should make regarding the quantum of costs to be paid to Valcom.

COSTS

108. Valcom did not request its costs incurred in proceeding with this complaint. Therefore, each party will bear its own costs.  

DETERMINATION

109. Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is valid.
110. Pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends that DND award Valcom the contract resulting from solicitation No. W8486-173369 under terms and conditions that would make it equivalent to those of the initial contract that was awarded to Valcom. However, the Tribunal recommends that the scope of the new contract awarded to Valcom be adjusted as necessary to account for the fact that Valcom appears to have performed the initial contract in part and to deduct services, if any, that may have been rendered to DND by another supplier in the period between the termination of the initial contract and the entry into force of the new contract awarded to Valcom, to the extent that any such services rendered are no longer required by DND.
111. Furthermore, in the event that the DND deducts from the new contract to be awarded to Valcom any such services rendered by a different supplier since the termination of the initial contract held by Valcom and that would otherwise have been rendered by Valcom, the Tribunal recommends that Valcom be compensated for lost profits with respect to such services. The parties should arrive at an appropriate amount of compensation within 60 days of the issuance of this determination and submit their agreement to the Tribunal. Should they be unable to agree, the Tribunal will ask the parties to file submissions at 15-day intervals, beginning with Valcom, on the recommendation that the Tribunal should make regarding the quantum of compensation to be paid to Valcom for services delivered over that period, if any.
112. The Tribunal also recommends that DND cancel Solicitation No. W8486-174011 and that it reimburse Valcom for the costs incurred in preparing its response to Solicitation No. W8486-174011. The parties should agree on an appropriate amount for bid preparation costs within 60 days of the issuance of this determination and submit their agreement to the Tribunal. Should they be unable to agree, the Tribunal will ask the parties to file submissions at 15-day intervals, beginning with Valcom, on the recommendation that the Tribunal should make regarding the quantum of costs to be paid to Valcom.