AIRCLEAN SYSTEMS CANADA
v.
DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES
File No. PR-2017-037

Determination and reasons issued
Tuesday, March 13, 2018

TABLE OF CONTENTS

• DETERMINATION
• STATEMENT OF REASONS
  • INTRODUCTION
  • SUMMARY OF COMPLAINT
  • PROCUREMENT PROCESS
  • ANALYSIS
    • Ground 1: AirClean’s Objection to the Evaluation Methodology is Late
    • Ground 2: The Evaluation Cannot be Interfered with Under the Standard of Reasonableness
    • Remarks
  • COSTS
  • DETERMINATION

 

IN THE MATTER OF a complaint filed by AirClean Systems Canada 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

AIRCLEAN SYSTEMS CANADA 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 will be awarded.

Jean Bédard
Jean Bédard, Q.C.
Presiding Member

Tribunal Panel: Jean Bédard, Q.C., Presiding Member

Support Staff: Rebecca Marshall-Pritchard, Counsel

Complainant: AirClean Systems Canada

Government Institution: Department of Public Works and Government Services

Counsel for the Government Institution: Susan Clarke
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 November 7, 2017, AirClean Systems Canada (AirClean) filed a complaint with the Canadian International Trade Tribunal (the Tribunal) under subsection 30.11(1) of the Canadian International Trade Tribunal Act^[1] concerning a Request for Standing Offer (RFSO) (Solicitation No. M7594-177606) by the Department of Public Works and Government Services (PWGSC), on behalf of the Royal Canadian Mounted Police (RCMP) and other federal departments and agencies, for the provision of negative pressure ductless fume hoods (fume hoods). The fume hoods are required for the safe sampling of fentanyl, analogues and other potent synthetic opioids and analgesic drugs during the sampling of exhibits by law enforcement personnel.
2. On November 9, 2017, the Tribunal informed the parties that the complaint had been accepted 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]
3. One ground of complaint in this matter was not filed in a timely manner. The other shows no violation of the trade agreements. As such, the complaint is not valid. However, this matter raised serious issues of public or occupational health and safety, and put into question the RCMP’s method of evaluation for the procurement of such goods. The Tribunal decided that each party should therefore assume its costs.

SUMMARY OF COMPLAINT

4. AirClean alleges that PWGSC erred in awarding the contract in the above-noted solicitation to a competing bidder, HEPAire Products Corporation (HEPAire). In particular, AirClean argues that the evaluation process was incomplete and inadequate and that instead of relying solely on documentation, the evaluators should have undertaken a comprehensive side-by-side physical evaluation of the products proposed by the bidders. AirClean also alleges that HEPAire did not meet the mandatory technical criteria, contrary to the terms of the RFSO.
5. As a remedy, AirClean requests that PWGSC terminate the resulting contract with HEPAire and that PWGSC re-evaluate AirClean’s and HEPAire’s bids and award the resulting contract to AirClean.

PROCUREMENT PROCESS

6. On May 16, 2017, PWGSC issued the RFSO. The bid closing date for the RFSO was July 20, 2017. Seven bids were submitted, including those of AirClean and HEPAire.
7. On October 10, 2017, PWGSC awarded the resulting contract to Diversitech Equipment and Sales (1984) Ltd. (Diversitech) and informed AirClean and HEPAire that they were not the successful bidders. That same day, AirClean requested a debriefing.
8. On October 10, 2017, HEPAire’s bid was determined to be non-compliant by the evaluators. However, HEPAire objected and directed the technical authority (the RCMP) to the relevant information in its bid. Upon further review, the RCMP determined that HEPAire was indeed compliant.^[3]
9. On October 18, 2017, a debriefing meeting was held between PWGSC officials and AirClean. During that meeting, AirClean expressed concerns as to whether Diversitech was actually able to supply a product that met certain of the mandatory technical criteria. Shortly afterwards, another federal government department that had contacted Diversitech to acquire its product through the newly awarded standing offer raised concerns with PWGSC about whether the product being offered by Diversitech actually met the required standards as specified in the RFSO.
10. On October 26, 2017, after further correspondence with Diversitech, PWGSC determined that Diversitech was in default of the requirements of the standing offer as issued and set the standing offer aside.^[4]
11. On November 1, 2017, a standing offer was awarded to HEPAire.
12. On November 2, 2017, AirClean requested a debriefing meeting with respect to the standing offer awarded to HEPAire.
13. On November 6, 2017, AirClean filed an objection with PWGSC regarding the standing offer awarded to HEPAire. AirClean alleged that HEPAire’s product did not meet certain mandatory technical criteria. That same day PWGSC referred AirClean’s concerns to the RCMP, requesting that it review the technical documentation contained in HEPAire’s bid.
14. On November 6, 2017, AirClean filed its complaint with the Tribunal.
15. On November 9, 2017, the Tribunal informed the parties that the complaint had been accepted 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 Regulations.
16. On November 15, 2017, PWGSC responded to AirClean’s objection and confirmed that HEPAire’s bid was compliant with the terms of the RFSO.^[5]
17. On December 1, 2017, PWGSC filed a Government Institution Report (GIR).
18. On December 12, 2017, AirClean filed its comments on the GIR.
19. On December 19, 2017, the Tribunal wrote to PWGSC requesting that it respond to the health and safety concerns raised by AirClean in its comments on the GIR.
20. On January 11, 2018, PWGSC and the RCMP responded to the Tribunal’s letter.

ANALYSIS

21. 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.
22. 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 are the Agreement on Internal Trade,^[6] the North American Free Trade Agreement^[7] and the Agreement on Government Procurement.^[8]
23. The principles governing the Tribunal’s review of government institutions’ evaluations of proposals in procurements are well settled. The bidder bears the burden of ensuring its bid clearly and unambiguously demonstrates compliance with the requirements of a solicitation.^[9] The Tribunal will only interfere with an evaluation that is unreasonable and will substitute its judgment for that of the evaluators only when they 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.^[10] In addition, a government institution’s determination will be considered reasonable if it is supported by a tenable explanation, regardless of whether the Tribunal finds that explanation compelling.^[11]
24. This complaint contains two grounds. First, AirClean alleges that the evaluation methodology of the RFSO was flawed. It argues that, instead of relying solely on each bidder’s documentation, the evaluators should have conducted a “side-by-side” comparative evaluation of the products proposed by the bidders. Second, AirClean alleges that the product proposed by HEPAire in its bid does not meet certain of the mandatory technical criteria and is therefore contrary to the terms of the RFSO. Moreover, AirClean warns of dire consequences should the product proposed by HEPAire not operate as required.
25. In response, PWGSC submits that it ascertained that HEPAire’s bid met the mandatory requirements of the RFSO based on the technical documentation that was provided; it also submitted that the RCMP reviewed HEPAire’s bid a second time and came to the same conclusion.
26. As indicated previously, AirClean’s first ground of complaint is late; its second ground of complaint, strictly speaking, shows no violation of the trade agreements when the evaluation is assessed against the standard of reasonableness.

Ground 1: AirClean’s Objection to the Evaluation Methodology is Late

27. Article X(2) of the AGP deals with how technical specifications are set out in tender documentation. It provides as follows:

2. In prescribing the technical specifications for the goods or services being procured, a procuring entity shall, where appropriate:

a. set out the technical specification in terms of performance and functional requirements, rather than design or descriptive characteristics; and

b. base the technical specification on international standards, where such exist; otherwise, on national technical regulations, recognized national standards or building codes.

28. Article 4.1.1.1 of the RFSO, entitled “Mandatory Technical Criteria”, states the following:

The Offeror must submit Technical brochures or technical data to demonstrate compliancy to the following requirements . . .

29. AirClean submits that the evaluation should not have been done on the basis of technical documentation alone, but rather by comparing each product on the basis of how they actually perform “as manufactured”, “as installed” and “as used”.^[12] In its reply to the GIR, AirClean suggested that a comprehensive evaluation would involve a minimum of three references of current installations for the exact units that were offered by HEPAire. Moreover, AirClean submits that the installations should be operational for a minimum of six months, and that pictures of the units and references should be required. 
30. PWGSC argues that AirClean took a wait-and-see approach, that it failed to object to the evaluation methodology in a timely manner and, consequently, that its complaint is late.
31. The Tribunal finds that AirClean failed to object to the evaluation methodology in a timely manner. The time limits for raising an objection or a ground of complaint are strict.^[13] Subsection 6(1) of the Regulations requires potential suppliers to file complaints “. . . 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 [them].” Subsection 6(2) provides that potential suppliers may also choose to first make a formal objection to the relevant government institution within 10 working days of knowing or having objective knowledge of the basis for an objection. In the latter case, the potential supplier has 10 working days after the day on which it has actual or constructive knowledge of the denial of relief by the government institution to file its complaint with the Tribunal.
32. The RFSO set out various technical specifications and the manner in which they were to be evaluated. This did not include any of the methods of evaluation proposed by AirClean. Had AirClean felt that the RFSO should contain its suggested evaluation methodology instead of the one that PWGSC chose to use, AirClean had to raise the issue in a timely manner. AirClean became aware of the evaluation methodology that it is now seeking to challenge at some time during the bidding period, which closed on July 20, 2017. As such, AirClean had, at the latest, 10 working days after the bid closing date of July 20, 2017, or until August 3, 2017, to question the evaluation method in a timely manner. Instead, because it waited until the outcome of the solicitation was announced, this ground of complaint is therefore late.
33. That being said, as indicated below, the Tribunal finds that AirClean raises questions that a reasonable person might also raise given the nature of the goods being procured. These goods cannot fail because human life is at risk and, therefore, actual testing of their safety-ensuring performance claims should be verified before field use.

Ground 2: The Evaluation Cannot be Interfered with Under the Standard of Reasonableness

34. AirClean alleges that the RCMP wrongly determined that HEPAire’s bid met the mandatory technical criteria of the RFSO. AirClean submits that the solution bid by HEPAire does not meet MTC 2, MTC 4, MTC 6, MTC 7 and MTC 8.
35. Article XV(4) of the AGP provides as follows:

4. To be considered for an award, a tender shall be submitted in writing and shall, at the time of opening, comply with the essential requirements set out in the notices and tender documentation and be from a supplier that satisfies the conditions for participation.

[Emphasis added]

36. As detailed below, after examining how PWGSC evaluated each of the mandatory technical criteria in issue, the Tribunal has determined that PWGSC’s evaluation of HEPAire’s bid cannot be interfered with under the applicable reasonableness standard of review.

Mandatory Technical Criterion 2

37. Mandatory technical criterion 2 (MTC 2) provides as follows:

Must meet or exceed all Ductless Fume Hoods (DH II) requirements as defined by SEFA 9-2010 Recommended Practices for Ductless Enclosures.

38. AirClean alleges that HEPAire does not have a product commercially available that would meet MTC 2 and, therefore, that it cannot certify compliance with the SEFA 9-2010 standard, as required by the solicitation. AirClean submits that in order to have this certification, a product must first be produced and actually tested against this standard. However, according to AirClean, HEPAire does not produce such products but acts only as a distributor. AirClean also submits that it is familiar with the product proposed in HEPAire’s bid but that the technical brochures included in HEPAire’s bid were “doctored”.^[14] AirClean did not produce any evidence to support these allegations.
39. PWGSC submits that the evaluators found HEPAire compliant with MTC 2 on the basis of a statement to that effect in its technical proposal. PWGSC submits further that the evaluators reviewed HEPAire’s bid documentation a second time before awarding it the RFSO and again following AirClean’s objection. The reviews confirmed the evaluators’ initial assessment that HEPAire’s bid was compliant with MTC 2.
40. The Tribunal has consistently held that evaluators are entitled to rely on the information contained in a potential supplier’s bid.^[15] Moreover, the Tribunal has found that government institutions must evaluate proposals thoroughly and based only on the contents of the proposal.^[16] Furthermore, there is no evidence to substantiate AirClean’s allegation that HEPAire would have submitted “doctored” technical documentation. Therefore, the Tribunal sees no reason to interfere with the evaluators’ assessment of HEPAire’s compliance with MTC 2.

Mandatory Technical Criterion 4

41. Mandatory technical criterion 4 (MTC 4), as amended by Amendment 004 to the RFSO, provides as follows:

Must be tested in accordance with ASHRAE 110-2016 Standards.

42. In its comments on the GIR, AirClean made similar unsubstantiated arguments in respect of MTC 4 as it did with MTC 2: that HEPAire would not have a product that meets ASHRAE 110-2016 standards. AirClean provided no evidence to support its claims.
43. PWGSC argues that the evaluators determined that HEPAire complied with MTC 4 on the basis of statements to that effect in its technical bid and accompanying brochure.^[17] The evaluators determined that this information addressed MTC 4. The evaluators came to this conclusion—both initially and upon subsequent review—based on the same evaluation methodology.
44. As indicated above, the evaluation methodology did not involve actual testing of the product.^[18] As such, it was open to the evaluators to determine that compliance with MTC 4 was met by bidders stating that their product had been tested in accordance with ASHRAE 110-2016. In its letter to the Tribunal dated January 11, 2018, the RCMP indicated that it would address any compliance issues as a matter of contract administration after contract award. The Tribunal addresses the RCMP’s response below. However, based on the foregoing, under the reasonableness standard, the Tribunal has no basis upon which it can interfere with PWGSC’s evaluation of MTC 4.

Mandatory Technical Criterion 6

45. Mandatory technical criterion 6 (MTC 6) provides as follows :

The Fume Hood must be equipped with a redundant HEPA filtration unit with a minimum 99.97% efficiency rating for collecting 0.3 micron particles.

46. AirClean submits that HEPAire does not have a product commercially available with redundant HEPA filtration and that none of its products have redundant HEPA filters as well as carbon filters but instead that they have either a HEPA filter or a carbon filter.
47. PWGSC argues that the evaluators found HEPAire’s bid compliant with MTC 6 on the basis of technical descriptive information provided in its proposal in relation to the elements of MTC 6. PWGSC argues further that the evaluators’ assessment of HEPAire’s compliance with MTC 6 was confirmed in its review of the bid following AirClean’s objection.
48. As indicated above, the solicitation did not require evaluators to test the fume hoods against their performance claims. As such, the Tribunal has no basis under the reasonableness standard to interfere with the evaluation of HEPAire’s bid in response to this criterion.

Mandatory Technical Criterion 7

49. Mandatory technical criterion 7 (MTC 7) provides as follows:

Must be equipped with the capability to replace the primary HEPA filter and pre-filters while the workstation is operational and still under negative pressure.

50. AirClean alleges that the product proposed by HEPAire does not have the functionality to safely provide for the ability to replace the filter while the workstation is operational. Specifically, AirClean alleges the following:

[The] product has a sash that cannot be fully opened without compromising the airflow of the hood. This sash is meant to be in the fully closed position during use in order to maintain the necessary face velocity/airflow to pull the powders away from the end user. This proposes a significant issue when it comes to filter replacement, as the filters in this workstation are all located above the workspace. In order to access the filters, the end user will be required to fully open the sash. So although the blower will still be running and the fume hood “technically” operational, with the sash fully opened the fume hood will not be able to maintain the face velocity required to maintain the negative pressure environment to provide the protection for the end user replacing the filters. In addition, the fact that the filters are located above the work surface allows for the very likely situation of “particle rain”.^[19]

[Bolding and emphasis in original]

AirClean alleges that this may pose serious risks for the next user of the work surface.^[20]

51. In response, PWGSC submits that the evaluators reviewed the contents of HEPAire’s technical proposal and were able to identify information addressing MTC 7.^[21] The evaluators’ subsequent review of HEPAire’s bid following the objection made by AirClean confirmed this assessment.
52. Even though a reasonable person may have cause to question the evaluation methodology chosen by PWGSC—again, because it does not require testing of equipment against its performance-related safety claims—the Tribunal can only confirm that the evaluation was conducted as announced in the solicitation documents. As such, the evaluation stands up to the reasonableness standard, and the Tribunal cannot interfere with PWGSC’s assessment in the circumstances.

Mandatory Technical Criterion 8

53. Mandatory technical criterion 8 (MTC 8) provides as follows:

Must be equipped with carbon filters.

54. AirClean’s argument in respect of MTC 8 is the same as the one it made in respect of MTC 6; namely that the brochures submitted by HEPAire do not reference the ability to have a HEPA filter and carbon filters, but rather one or the other.
55. In response, PWGSC submits that the evaluators identified information in the technical brochure^[22] addressing MTC 8. Further, upon their subsequent review of HEPAire’s bid following the objection made by AirClean, the evaluators confirmed their assessment.^[23]
56. Upon reviewing HEPAire’s bid against the requirements of MTC 8, the Tribunal finds that the brochures provided by HEPAire contain references to the use of carbon filters. Once again, given the design of the solicitation, the Tribunal has no basis to interfere with PWGSC’s evaluation.

Remarks

57. The grave dangers associated with fentanyl and similar products are public knowledge. The serious allegations made by AirClean in its comments on the GIR in relation to any real or potential threat to human safety raised serious concerns. It is for that reason that the Tribunal asked PWGSC to address these allegations shortly after they surfaced. PWGSC relayed the Tribunal’s questions to the RCMP.
58. The RCMP responded as follows: “[t]he RCMP considers the health and safety of its employees seriously . . . [Should] it be found that the HEPAire products have non-compliance issues in meeting the contractual requirements, the RCMP . . . will exercise their contractual legal options to terminate the Standing Offer, as previously done with Diversitech.”
59. The Tribunal notes that while the evaluation was being conducted by the RCMP, this procurement was made by PWGSC on behalf of the RCMP and other federal departments and agencies. In this context, the RCMP’s decisions do not only impact the health and safety of its own employees, but also of other employees of the Government of Canada.
60. In this context, the Tribunal had expected that PWGSC and the RCMP might be able to be more reassuring by showing evidence that concrete testing procedures had been undertaken to ensure that bidders’ equipment stood up to their technical performance and associated safety claims, or by confirming that such testing was being contemplated prior to the installation or commissioning of the fume hoods.
61. Instead, as shown in the evidence, bidders’ products were only evaluated according to what they claim to do on paper. No confirmation or indication of actual, or planned, safety testing of the fume hoods against their performance claims was provided to the Tribunal. For the reasons set out above, PWGSC’s evaluation stands because it does not show a violation of the trade agreements: the solicitation said that the bids would be evaluated on paper, and that is what PWGSC did; as such, the Tribunal cannot intervene.
62. However, the Tribunal notes that the standing offer previously awarded to another bidder (Diversitech) was set aside following an earlier objection by AirClean. The Tribunal also notes that while AirClean obviously has an interest in the outcome of this matter, its allegations may nonetheless be considered as being credible given its subject-matter expertise.
63. The Tribunal remains concerned that the methodology selected for this solicitation is not what an average person reasonably informed of the risks involved would have expected given the nature of the products that the fume hoods will be used with. If a performance criterion does not live up to its claim and this is discovered only after a fume hood fails to perform in the field, human life may already have been risked or compromised. As such, absent actual testing of performance claims prior to field use, if ever it were to be uncovered “that the HEPAire products have non-compliance issues in meeting the contractual requirements,” the RCMP’s contemplated approach to “exercise [its] contractual legal options to terminate the Standing Offer” would be of no solace whatsoever to personnel exposed to, or affected by, fentanyl or similar products.
64. Given the nature of the subject-matter product and the history of this procurement, the Tribunal believes that it is incumbent upon it to share its concerns regarding the assessment methodology that was selected in the circumstances of this procurement and whether solicitations of this nature ought to be assessed on the basis of actual testing of bidders’ performance claims instead of paper claims of compliance only. Even though the Tribunal cannot make it a formal recommendation under the CITT Act because it has found no trade agreement breach to remedy, it trusts that PWGSC will consider these comments prior to launching other procurements for goods of that nature.  
65. This matter raises potentially serious public and workplace safety concerns at the RCMP and other federal departments and agencies on whose behalf this procurement has been conducted by PWGSC. The Tribunal trusts that PWGSC will also consider the Tribunal’s concerns before the fume hoods are used in operational settings.

COSTS

66. Both parties requested costs in relation to the proceedings. PWGSC was successful in defending this complaint and is therefore normally entitled to costs pursuant to section 30.16 of the CITT Act. In accordance with the Procurement Costs Guideline (the Guideline), the Tribunal’s preliminary indication of the level of complexity of the complaint would normally be Level 1 ($1,150). However, the Tribunal finds that AirClean raised important public health or workplace occupational health and safety concerns that were brought to the attention of PWGSC; the complaint also rightfully put the spotlight on whether it is appropriate to conduct such a solicitation largely on the basis of written certifications only. The Tribunal believes that AirClean should not have to bear costs for having brought this complaint, despite its lack of success, because it raised important public and workplace safety considerations that were not addressed in a satisfactory manner by PWGSC or the RCMP in these proceedings. The Tribunal therefore awards no costs to PWGSC.

DETERMINATION

67. Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is not valid.
68. No costs will be awarded.