VANTAGE PAINTING LTD.
v.
DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES
File No. PR-2017-042

Determination and reasons issued
Monday, March 5, 2018

TABLE OF CONTENTS

• DETERMINATION
• STATEMENT OF REASONS
  • INTRODUCTION
  • SUMMARY OF COMPLAINT
  • BACKGROUND
  • RELEVANT PROVISIONS OF THE RFSO
  • POSITIONS OF PARTIES
  • ANALYSIS
  • COSTS
  • DETERMINATION OF THE TRIBUNAL

 

IN THE MATTER OF a complaint filed by Vantage Painting Ltd. 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

VANTAGE PAINTING LTD. - 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. No costs shall be awarded to either party.

Ann Penner -
Ann Penner
Presiding Member

Tribunal Panel: - Ann Penner, Presiding Member

Support Staff: - Courtney Fitzpatrick, Counsel

Complainant: - Vantage Painting Ltd.

Government Institution: - Department of Public Works and Government Services

Counsel for the Government Institution: - Ian McLeod

Roy Chamoun
Kathryn Hamill

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

INTRODUCTION

1. On December 7, 2017, Vantage Painting Ltd. (Vantage) 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] regarding a Request for Standing Offer (RFSO) (Solicitation No. EW076-180729/A) issued by the Department of Public Works and Government Services (PWGSC) for the provision of painting services in Yellowknife, Northwest Territories.
2. On December 11, 2017, the Tribunal decided to conduct an inquiry into the complaint, 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 inquired into the validity of the complaint as required by sections 30.13 to 30.15 of the CITT Act. For the reasons set out below, the Tribunal finds that the complaint is not valid.

SUMMARY OF COMPLAINT

4. Vantage alleged that PWGSC erred in issuing a standing offer to Y.K. Construction Management (Y.K. Construction). Specifically, Vantage alleged that the technical portion of its bid was unfairly evaluated and that the winning bidder was not qualified to perform the work required by the standing offer. As a remedy, Vantage asked that the standing offer awarded to Y.K. Construction be terminated and that the standing offer be awarded to Vantage instead.

BACKGROUND

5. PWGSC issued this RFSO on September 14, 2017, with a closing date of October 3, 2017. On September 28, 2017, PWGSC published amendment 1 to the RFSO. This amendment extended the closing date for offers to October 11, 2017, and modified Annex I: Aboriginal Opportunities Considerations (AOC).
6. PWGSC received three offers, including one from Vantage. The offers submitted by Vantage and Y.K. Construction were found to be compliant with the mandatory criteria and evaluated on the basis of the AOC technical criteria of the RFSO and price. The third offer was found to be non-compliant with the mandatory criteria and was disqualified.
7. On November 14, 2017, PWGSC awarded the standing offer to Y.K. Construction. PWGSC wrote to Vantage that same day, advising it of the outcome and setting out the scores of each of the offers.
8. On November 15, 2017, Vantage contacted PWGSC to express concern about the results of the procurement process. Vantage argued that Y.K. Construction did not have the ability to perform the contract properly. In response, the contracting officer reviewed the results of the procurement process with Vantage over the phone, and pointed out that, while Vantage had done well in the AOC technical scoring, it was not the successful bidder as the AOC portion was only worth 10 percent of the total score. The contracting officer also informed Vantage that, given the structure of the criteria in the RFSO, he did not see a basis for any further review of the results.
9. On November 27, 2017, a representative from the local member of Parliament’s (MP) constituency office (hereafter “MP’s representative”) contacted PWGSC on Vantage’s behalf, seeking additional details on the breakdown of points awarded to Vantage and the process for appealing the contract award.
10. On November 28, 2017, PWGSC informed the MP’s representative that it would prepare a written response to Vantage. PWGSC also suggested the Tribunal and the Office of the Procurement Ombudsman as possible avenues of appeal.
11. On November 30, 2017, PWGSC called Vantage to advise that a response to its objection was forthcoming. This call was terminated because Mr. Daniels, president of Vantage, was driving at the time.
12. On December 1, 2017, the MP’s representative followed up with PWGSC regarding a response to Vantage’s objection. She was advised that a response letter was being prepared.
13. On December 4, 2017, Vantage filed an incomplete complaint with the Tribunal. On December 5, 2017, Vantage filed a copy of the response letter received from PWGSC that same day. On December 6, 2017, the Tribunal requested that Vantage file a copy of its bid. Vantage complied with the Tribunal’s request on December 7, 2017, at which point the Tribunal acknowledged that Vantage’s complaint complied with subsection 30.11(2) of the CITT Act.
14. On December 11, 2017, the Tribunal decided to conduct an inquiry into the complaint. It notified parties of this decision on December 13, 2017. Also on December 13, 2017, pursuant to subsection 30.13(3) of the CITT Act, the Tribunal issued an order postponing any call-ups in connection with this solicitation until the Tribunal ruled on the validity of the complaint. On December 19, 2017, PWGSC wrote to the Tribunal certifying that the procurement was urgent and that a delay in issuing call-ups under the awarded standing offer would be contrary to the public interest. On December 20, 2017, the Tribunal rescinded its postponement of award order.
15. On January 15, 2018, PWGSC filed its Government Institution Report (GIR) with the Tribunal in accordance with section 103 of the Canadian International Trade Tribunal Rules.^[3]
16. On January 29, 2018, Vantage filed its comments on the GIR. On January 30, 2018, Vantage filed revised comments on the GIR.
17. Given that the information on the record was sufficient to determine the merits of the complaint, the Tribunal decided that an oral hearing was not necessary and disposed of the matter on the basis of the written record.

RELEVANT PROVISIONS OF THE RFSO

18. The RFSO was for the provision of painting services for Crown housing projects in Yellowknife, Northwest Territories. It was subject to the Tlicho Land Claims and Self-Government Agreement, a comprehensive land claims agreement.
19. Part 2 of the RFSO set out information about PWGSC’s apprentice procurement initiative, whereby contractors bidding on construction and maintenance tenders by PWGSC are asked to sign a voluntary certification signalling their commitment to hire and train apprentices.
20. Part 4 of the RFSO set out the evaluation procedures and basis of selection. It provided, in relevant part, as follows:

. . .

1.1 Technical Evaluation

1.1.1 Mandatory Technical Criteria

a) MANDATORY REQUIREMENTS - Required as part of the Offer

i) Pursuant to the General Instructions, submission of Request for Standing Offer (RFSO), offers must be submitted to the office designated for the receipt of offers, and must be received on or before the date and time set for solicitation dosing shown on page 1 of the RFSO. A rate must be entered for each item listed in the unit price schedule of the offer.

1.1.2 Aboriginal Opportunities Consideration (AOC)

In this requirement, the AOC will form part of an offeror’s technical bid in accordance to the criteria listed in Annex H and Annex I.

It is not mandatory for Offerors to include the AOC as part of their proposal.

c) MANDATORY REQUIREMENTS - Precedent to issuance of a Standing Offer

i) Health & Safety Requirements

ii) Code of Conduct Certifications (see Part 5 - Certifications)

iii) Insurance

. . .

2. Basis of Selection^[4]

2.1. Basis of Selection - Highest Combined Rating of Technical Merit and Price

Basis of Selection - Highest Combined Rating of Technical AOC Merit and Price

1. To be declared responsive, a bid must:

a. comply with all the requirements of the bid solicitation; and

b. meet all mandatory criteria; and .

c. AOC Point Rated Criteria has no pass mark. The rating is performed on a scale of 100 points.

2. Bids not meeting (a) or (b) or (c) will be declared non-responsive.

3. The selection will be based on the highest responsive combined rating of technical merit and price. The ratio will be 10 % for the technical merit and 90 % for the price.

4. To establish the technical merit score, the overall technical score for each responsive bid will be determined as follows: total number of points obtained / maximum number of points available multiplied by the ratio of 10 %.

5. To establish the pricing score, each responsive bid will be prorated against the lowest evaluated price and the ratio of 90 %.

6. For each responsive bid, the technical merit score and the pricing score will be added to determine its combined rating.

7. Neither the responsive bid obtaining the highest technical score nor the one with the lowest evaluated price will necessarily be accepted. The responsive bid with the highest combined rating of technical merit and price will be recommended for issuance of standing offer.

21. As noted in article 2(1) of Part 4, the RFSO contained non-mandatory point-rated technical criteria, which related to the provision of aboriginal opportunities by a bidder (the AOC). The AOC technical criteria were set out in Annex I (as amended) and provides, in relevant part, as follows:

ANNEX I

PART A  - ABORIGINAL OPPORTUNITIES CONSIDERATIONS

Evaluation and Assessment of AOC Guarantee

For an offer to be assigned points for guarantees made in respect of any AOC offer criteria, THE OFFER OR MUST PROVIDE PROOF WITH THEIR OFFER to demonstrate how they will meet the objective of each criterion. Offerors may use the attached GUARANTEE TABLES to supplement the AOC submission provided in their offer.

Proof of efforts and/or guarantees made by the Offeror MUST include, but not be limited to, the names of persons or companies contacted and the nature of the undertakings at the time of the submission as applicable. Offerors MUST ensure their AOC documentation demonstrates sufficient evidence to assess the compliance of their offer against the criteria listed herein. It is the Offeror’s responsibility to provide sufficient information in its offer to enable the Evaluation Committee to complete its evaluation. Offerors will only be eligible to receive points for demonstrated commitments. Offerors must include all reference material to be considered. Only material and/or documents submitted as part of the offer proposal will be considered. URL links to website will not be considered.

Canada reserves the right to verify any information provided in the AOC guarantee and that untrue statements may result in the tender being declared non-responsive.

Offeror Selection

The Offeror selection will be based on the highest responsive combined rating of AOC and price. The ratio will be 10% for the AOC and 90% for the price.

AOC Score = Offeror’s’ Points x 10%^[5]

Maximum Points

Price Score = Lowest Offer x 90%

Offeror’s Price

22. According to the AOC technical criteria, points would be awarded for four different categories, as follows:

1. Head Office (5/100 points)
2. Training (15/100 points)
3. Labour (40/100 points)
4. Subcontractors/Suppliers (40/100 points)

POSITIONS OF PARTIES

23. Vantage submitted that it should have been awarded the standing offer because it had more experience, could offer a higher quality service, and was committed to training apprentices. It questioned whether Y.K. Construction was qualified to carry out the painting work under the contract. Vantage was also concerned that the technical portion of its bid was not fairly evaluated and that Mr. Daniels’ Tlicho heritage was not properly taken into account. Finally, Vantage submitted that PWGSC failed to inform it of its appeal options after explaining that it had not been awarded the standing offer.
24. PWGSC responded that it evaluated the responsive offers reasonably. It noted that Y.K. Construction’s financial bid was significantly lower than Vantage’s and so it received full points for pricing. PWGSC acknowledged that Vantage was awarded a higher score with respect to the AOC technical criteria, but submitted that it was not sufficient to overcome the advantage that Y.K. Construction had on price, as pricing made up 90 percent of the total score. Finally, PWGSC submitted that the RFSO did not include any criteria relating to experience or certifications and that Vantage did not object to the terms of the RFSO during the bid solicitation period.

ANALYSIS

25. 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, is the Canadian Free Trade Agreement.^[6]
26. The CFTA requires that a procuring entity provide potential suppliers with all the information necessary to permit them to prepare and submit responsive tenders, including the criteria which will be used for evaluating and awarding the contract.^[7] The CFTA further requires that, to be considered for an award, a tender must comply with the essential requirements set out in the tender documentation and that procuring entities award contracts in accordance with the evaluation criteria specified in the tender documentation.^[8]
27. As noted above, PWGSC awarded the standing offer to Y.K. Construction. In conducting its evaluation, PWGSC awarded Y.K. Construction 90/90 points for price and 1.9/10 points for the AOC technical criteria.^[9] PWGSC awarded Vantage 84.59/90 points for price and 5.2/10 points for the AOC technical criteria. As a result Y.K. Construction was awarded a total score of 91.9/100 and Vantage was awarded a total score of 89.79/100.
28. The Tribunal typically accords a large measure of deference to evaluators in their evaluation of proposals. In general, the Tribunal will only interfere with an evaluation that is unreasonable^[10] and will substitute its judgment for that of the evaluators only when the evaluators have not applied themselves in evaluating a bidder’s proposal, have ignored vital information provided in a bid, have wrongly interpreted the scope of a requirement, have based their evaluation on undisclosed criteria or have otherwise not conducted the evaluation in a procedurally fair way.^[11]
29. Having carefully examined the bids submitted by Y.K. Construction and Vantage and confirming the points awarded for price^[12] and the AOC technical criteria^[13], the Tribunal finds that both proposals were evaluated reasonably and that Y.K Construction was properly awarded a standing offer. While Vantage scored higher than Y.K Construction on the AOC technical criteria, Y.K Construction had the lowest-priced bid. As the RFSO was heavily weighted towards price, Vantage’s higher AOC technical score was not sufficient to overcome its pricing disadvantage.
30. Overall, Vantage was awarded 52/100 points in respect of the AOC technical criteria. On a prorated basis, this gave Vantage a score of 5.2/10 for a combined score of 89.79/100. This is 2.11 points lower than Y.K. Construction’s combined score of 91.9. As Y.K. Construction had the highest combined rating of technical merit and price, the Tribunal finds that it was properly awarded the standing offer.
31. In its complaint, Vantage alluded to other, more qualitative, reasons why it should have been awarded the RFSO. Vantage submitted that it had more experience than Y.K. Construction, that it offered a higher quality service and that it was committed to training apprentices. The Tribunal appreciates that Vantage may be highly qualified to perform the services required by this standing offer. However, the RFSO did not contain any evaluation criteria relating to years of experience or the need to hold particular certifications. As no such evaluation criteria were included with the RFSO, these criteria could not have properly been considered by PWGSC as part of its evaluation. As such, the Tribunal finds no breach of the trade agreements on this basis. The Tribunal also notes that any bidder wishing to object or complain about the evaluation criteria (or lack thereof) set out in the solicitation documents must do so in a timely manner, typically within 10 days of obtaining the documents.^[14]
32. In light of the foregoing, the Tribunal finds that the complaint is not valid.
33. Notwithstanding the Tribunal’s conclusion about the validity of this complaint, as a general comment the Tribunal remarks that more careful drafting of certain elements of this RFSO may have made the RFSO easier for bidders to understand. For example, article 5 of Part 2 of the RFSO set out PWGSC’s apprentice procurement initiative, which encouraged employers to participate in apprenticeship training.^[15] Article 5 explained the Government of Canada’s commitment to and support of training programs and then requested that contractors submit a voluntary certification agreeing to “use . . . reasonable commercial efforts to hire and train registered apprentices”. The Tribunal acknowledges that the terms of the RFSO made the signing of this certification entirely voluntary and, therefore, failing to provide this certification could not render a bid non-compliant. However, the RFSO could have explicitly stated that no points would be awarded for providing such a certification. Without this direction, bidders may have been unnecessarily confused about the significance of this voluntary certification, particularly how it differed from the AOC technical criteria that were also voluntary but formed part of the basis of selection.
34. Finally, and as a general comment, the Tribunal strongly encourages PWGSC, as it has done in the past,^[16] to be mindful of the importance of properly informing bidders of the recourse mechanisms available to them, including the possibility of filing a complaint with the Tribunal within the applicable time periods. The regret letter to Vantage dated November 14, 2017, made no mention of the recourse mechanisms available to Vantage or the applicable time lines.^[17] Neither did the RFSO. Moreover, PWGSC acknowledged that it did not inform Vantage of the available appeal options in the phone call on November 15, 2017, because the contracting officer did not see a basis for any further review of the results.^[18] This is not an acceptable basis for withholding this type of information from bidders. The decision of whether a bidder should or should not be informed of the recourse mechanisms available to them has nothing to do with a contracting officer’s personal views about the strength of a ground of complaint or a bidder’s chances of success. Instead, information about recourse mechanisms is part and parcel of a fair, objective and transparent procurement process, as PWGSC knows full well.
35. In this case, as this information was not readily provided to Vantage, its ability to obtain answers about its recourse options was frustrated to the point where it felt the need to seek assistance from the local MP’s office. Although the present complaint was filed within the prescribed time limits under section 6 of the Regulations, the extra time and effort required by Vantage could have resulted in a scenario in which the Tribunal may have had no choice but to reject Vantage’s complaint on the basis of timeliness alone, given the tight timelines for filing a complaint with the Tribunal.

COSTS

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

DETERMINATION OF THE TRIBUNAL

37. Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is not valid. No costs shall be awarded to either party.