Determinations

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TABLE OF CONTENTS

• DETERMINATION OF THE TRIBUNAL
• STATEMENT OF REASONS
• • COMPLAINT
  • PROCUREMENT PROCESS
  • POSITION OF PARTIES
  • • PWGSC's Position
    • Foundry's Position
  • TRIBUNAL'S DECISION
  • DETERMINATION OF THE TRIBUNAL

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Ottawa, Tuesday, March 12, 2002

File No. PR-2001-048

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

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

DETERMINATION OF THE TRIBUNAL

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 Foundry Networks Inc. be compensated one ninth of the profit that it would have made, if any, if it had submitted a proposal for a price of one dollar less than that of Bell Nexxia.

Pursuant to subsection 30.16(1) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards Foundry Networks Inc. its reasonable costs incurred in relation to preparing and proceeding with the complaint.

Michel P. Granger
Michel P. Granger
Secretary
 
 

Date of Determination and Reasons:	March 12, 2002
Tribunal Member:	Zdenek Kvarda, Presiding Member
Investigation Manager:	Paule Couët
Counsel for the Tribunal:	Dominique Laporte
Complainant:	Foundry Networks Inc.
Counsel for the Complainant:	Ronald D. Lunau
Government Institution:	Department of Public Works and Government Services
Counsel for the Government Institution:	Susan D. Clarke
	Christianne M. Laizner

 
 

STATEMENT OF REASONS

COMPLAINT

On December 12, 2001, Foundry Networks Inc. (Foundry) filed a complaint with the Canadian International Trade Tribunal (the Tribunal) under subsection 30.11(1) of the Canadian International Trade Tribunal Act.¹ The complaint concerns the procurement (Solicitation No. W0113-01JA23/A) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of National Defence (DND) of additional Cisco networking equipment, primarily switches, or equivalent, for use with Canadian Forces Base (CFB) Borden's metropolitan area network (MAN).² The additional equipment is primarily intended to upgrade and augment the switching equipment in the existing network infrastructure, thus completing the second phase of a three-phase network development plan.

Foundry alleged that, contrary to Articles 1007(3), 1008(1), 1008(2) and 1013 of the North American Free Trade Agreement ³ and Articles 504(3)(b) and (g) of the Agreement on Internal Trade,⁴ PWGSC and DND have limited this solicitation to the products of a particular supplier, Cisco Systems Canada Co. (Cisco). Specifically, it alleged that the amended Request for Proposal (RFP) still contained a number of stipulations and requirements that had the effect of excluding non-Cisco products from consideration. Foundry further alleged that PWGSC refused to provide relevant and necessary information relating to existing network devices used by DND, which it requires in order to bid an equivalent product.

Foundry requested, as a remedy, that the Tribunal issue an order postponing the award of any contract until the Tribunal determined the validity of the complaint. It further requested that the solicitation be cancelled and that a new solicitation be issued in compliance with the trade agreements. Foundry also requested that any awarded contract be terminated to allow for proper competition. In the alternative, it requested compensation for the lost opportunity to participate in the competition. The amount of such compensation should be developed jointly by the parties for consideration by the Tribunal, failing which the Tribunal should decide the amount. Foundry also requested its reasonable costs incurred in preparing and proceeding with the complaint.

On December 20, 2001, 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.⁵ That same day, the Tribunal issued an order postponing the award of any contract in relation to this solicitation until it determined the validity of the complaint. On December 27, 2001, PWGSC informed the Tribunal, in writing, that a contract in the amount of $654,190.55 (GST included) had been awarded to Bell Nexxia (Bell). As a consequence, on January 18, 2002, the Tribunal issued an order rescinding its postponement of award order. On January 15, 2002, PWGSC filed a Government Institution Report (GIR) with the Tribunal in accordance with rule 103 of the Canadian International Trade Tribunal Rules.⁶ On February 1, 2002, Foundry filed comments on the GIR with the Tribunal.

Given that there was sufficient information on the record to determine the validity of the complaint, the Tribunal decided that a hearing was not required and disposed of the complaint on the basis of the information on the record.

PROCUREMENT PROCESS

On August 8, 2001, DND issued a requisition for the networking equipment. The equipment was originally to be procured through limited tendering procedures, on the basis that "only one person or firm is capable of performing the contract".⁷ Subsequently, on August 21, 2001, PWGSC published a Notice of Proposed Procurement (NPP), which was posted on MERX.⁸ The NPP indicated that the solicitation was subject to NAFTA and the AIT, and identified the bid closing date as October 5, 2001, subsequently extended to November 7, 2001.

The NPP reads, in part:

CFB Borden's MAN, built prior to the availability of the industry standard network protocols, is composed completely of CISCO Routers, CISCO Switches and CISCO Access Servers and uses CISCO's management software, proprietary protocols and features for operation and management.
A homogeneous network increases maintainability at reduced cost. Being a homogeneous network , CFB Borden has the ability to easily swap devices and modules to quickly resolve system outages. Spare modules are available on a one (spare) to 20 or 30 (in-service devices) basis. Presently CFB Borden's MAN is comprised solely of CISCO products with a value of $2,758, 000.00.

On September 4, 2001, Foundry forwarded an e-mail to PWGSC expressing interest in bidding on this solicitation and objecting to the specification of Cisco products only. Foundry indicated, in part, that:

[It] can interoperate with the Cisco products requested in this RFP since the Cisco products now also support industry standards. As a result Foundry switches can be configured to interoperate with Cisco switches even though these Cisco switches may still be running Cisco proprietary protocols.
In addition to conforming to Industry Standards we are also completely compatible with the Cisco Command Line Interface (CLI) and Access Control Lists.

As a result, during the period from September 9 to 20, 2001, PWSGC and Foundry exchanged e-mails in which numerous questions on technical issues were asked and answered. During that period, PWGSC ensured that DND's technical personnel was involved at all times. DND's technical personnel was agreeable to amending the solicitation in order to enable suppliers to bid non-Cisco products, provided: (1) the non-Cisco products permit the use of the enhanced functionality of Cisco proprietary protocols currently in use at CFB Borden; (2) the non-Cisco switches can be used interchangeably with the equivalent existing switches with no loss of enhanced functionality, i.e. no reconfiguration of existing switches required; and (3) the non-Cisco switches can be managed using existing management software.

On September 21, 2001, PWGSC advised Foundry that the RFP would be amended to allow for equivalent products. PWGSC also informed Foundry that the questions raised in its e-mail of September 9, 2001, would be answered by means of an amendment to the solicitation. Amendment No. 004 to the solicitation, which revised the technical description and mandatory requirements of the RFP, was issued on October 5, 2001. The amended RFP allowed potential suppliers to propose Cisco or equivalent products.

The RFP, as amended, includes the following stipulations that are relevant to this case:

MANDATORY CRITERIA/REQUIREMENTS ^[9]

Basis of Selection
To be considered responsive, a bid must meet all of the mandatory requirements of this solicitation. Bids not meeting all of the mandatory requirements will be given no further consideration.

Annex "A" to the RFP contains the following specifications:

REQUIREMENTS
CFB Borden has an ongoing need to upgrade and augment the switch equipment in the existing network infrastructure. The purpose of this procurement is to purchase various Cisco switches or equivalent to complete Phase II of a three-phase network development plan.
The Borden MAN is currently comprised of seven Cisco Catalyst 6500s core switches, 21 Catalyst 5000 series Cisco switches, six 4000 series Cisco switches, approximately 100 Cisco 2900 series switches and approximately 80 Cisco 1900 series switches.
1. The following protocols are currently in use and provide essential functionality for the Base MAN:

A. Layer 2 internetwork switching protocol is Cisco's ISL (Inter-Switch Link) VLAN trunking protocol.
B. Cisco's Virtual Trunking Protocol (VTP) is used as an essential tool for VLAN Trunk administration.
C. Cisco Multilayer Switching (MLS) is essential protocol used to increase network bandwidth utilization.
D. The network is managed by CiscoWorks 2000 network management system.
E. Cisco Discovery Protocol (CDP) Neighbor is used to provide necessary network management and diagnostic information on directly connected devices.
F. Availability of network services is obtained via the Hot Standby Routing Protocol (HSRP) which allows redundant switches to take over from failed switches. HSRP is also used to load balance network traffic over available switches.
G. Cisco's Enhanced Switch Port Analyzer (Enhanced SPAN) protocol is used extensively to simplify network management functions.

2. The current functionality and maintainability of the Borden MAN requires that the above protocols continue to be used.

Annex "B" to the RFP, "Basis of Payment and Technical Requirements", provides a detailed list of the equipment requirements and indicates the applicable Cisco switch or "Proposed Equivalent Solution" for each item and the standards, functions and features that must be supported. It further stipulates that:

For the purpose of this solicitation the term Equivalent means switches procured shall be identical to or equivalent in form, fit, function, and interoperability with protocol standards, functions and features utilized with network switches in the existing Borden MAN. It shall be possible to remove an existing switch from the current Base MAN network and replace that switch with its specified equivalent without having to reconfigure other network components and without loss of any pre-existing network functionality.

After the publication of amendment No. 004 to the solicitation, Foundry addressed a number of questions to PWGSC on October 16, 17, 22, 23, 26 and 29, 2001. PWGSC provided technical responses to these questions on October 18, 22, 23, 25, 26, 29 and 31, 2001. As well, Foundry was informed that equivalent solutions, as per the definition of equivalent in the RFP, as amended, would be considered. On October 25, 2001, amendment No. 006 was issued to clarify and modify certain technical requirements in the RFP. On October 31, 2001, amendment No. 007 was issued and included revisions to certain weight limitations requested by Foundry. The solicitation closed on November 7, 2001.

According to the GIR, eight bids were received. All bidders proposed Cisco equipment. No bid was received from Foundry. All the bids submitted in response to this solicitation were evaluated as being compliant, and the selection of Bell as the contract awardee was made according to the terms of the RFP.

In an e-mail dated November 14, 2001, Foundry made an objection to PWGSC regarding the procurement process and requested that the RFP be cancelled and reissued to allow for equivalent products. On November 28, 2001, a contract was awarded to Bell. That same day, PWGSC responded to Foundry's objection, in part, as follows:

This solicitation is now closed. It [the solicitation] had already provided for consideration of equivalent substitutes. We have provided an answer to your questions. Since you have not made any submission against the solicitation there is nothing for the evaluation team [to] review or consider in regard to Foundry Networks for this particular requirement.

Foundry filed this complaint with the Tribunal on December 12, 2001.

POSITION OF PARTIES

PWGSC's Position

PWGSC submitted that the technical requirements set out in Annex "B" to the RFP are those of the equipment in use at CFB Borden and are DND's requirements. It submitted that reference to Cisco throughout the RFP was imperative due to the complexity of switching protocols and the fact that certain proprietary technical information was not available. PWGSC further submitted that the only practical way to state the requirement with the necessary precision was to name the equipment that must be supplied or the proprietary protocols that must be supported. There was no other reasonable or logical way to describe DND's requirements. PWGSC further argued that it would make no sense for DND and PWGSC to attempt detailed performance requirements or other generic technical descriptions for the products required.

Furthermore, PWGSC submitted that the trade agreements do not prohibit, and previous Tribunal determinations support,¹⁰ the use of "brand name or equivalent" specifications in circumstances such as those described above. Therefore, PWGSC argued, Foundry's allegation on this point is without merit

PWGSC submitted that it, along with DND, acquiesced to Foundry's requests for changes to the RFP, as long as DND's legitimate requirements were not compromised. It added that further accommodation would have compromised the critical military requirements for the interoperability and performance of replacement parts for the MAN at CFB Borden.

With respect to Foundry's allegation that PWGSC and DND refused to provide information necessary to bid equivalent products, PWGSC submitted that a list of the installed base of equipment or a network diagram was not necessary to bid equivalent products. Furthermore, it submitted that DND was justified, for security reasons, in refusing to provide this information.

PWGSC submitted that it provided detailed technical information, including a list of protocols that must be supported, and other mandatory features required to ensure interoperability with the existing infrastructure. PWGSC noted that, early in this procurement process, Foundry asserted, on the basis of the information contained in the NPP, that it could propose an acceptable alternative to Cisco products only. However, once the RFP was amended to allow equivalent products, Foundry continued to request changes to the RFP's technical requirements. PWGSC submitted that Foundry simply does not have a bona fide requirement for more information to develop and submit a responsive proposal.

With respect to the technical issues allegedly left "outstanding" at the time of bid closing, PWGSC submitted that these matters demonstrate Foundry's intent to change the requirements of the solicitation and are not bona fide requests for information. In reply to Foundry's position that these "outstanding" issues addressed items that constitute unreasonable specifications intended to, or that have the effect of, limiting the competition to Cisco products, PWGSC responded that, to the contrary, these statements refer for the most part to limitations imposed by the existing technological environment.

Addressing, in turn, the so-called "outstanding" issues, PWGSC submitted the following:

PWGSC reserved its right to make further submissions with respect to the award of costs in this matter.

Foundry's Position

In its comments on the GIR dated February 1, 2002, Foundry argued that, contrary to the position taken by PWGSC, DND's product interoperability requirement does not necessitate that the products offered support features and protocols that are proprietary to and copyrighted by Cisco. Rather, Foundry submitted, interoperability between products can be achieved through standards-based protocols that are supported by both Cisco products and Foundry products.

Foundry submitted that its switches are fully capable of being configured to interoperate with Cisco switches and can meet the Crown's legitimate operating requirement for products that can be integrated into its existing network. However, Foundry's switches cannot support features and protocols that are proprietary to and copyrighted by Cisco. For this reason, Foundry submitted that insistence on support for such protocols and features becomes an obstacle to competition and argued that Foundry's products have to be able to interoperate with Cisco and other products; otherwise, there would be virtually no market for Foundry's products.

In addition, Foundry submitted that PWGSC's and DND's refusal to provide Foundry with essential information about the existing network, without proper justification, created an insurmountable obstacle to bidding.

Specifically, Foundry submitted that DND's clear preference for a Cisco solution, as set out in the Advance Contract Award Notice dated August 7, 2001, was evident throughout this solicitation process. It submitted that, in effect, although cosmetic additions were made to the solicitation to give an appearance of competition, the RFP contained mandatory technical requirements relating to Cisco protocols that excluded non-Cisco suppliers.

Foundry submitted that, during the solicitation process, it informed PWGSC that Cisco had implemented industry-standard protocols in its products that provide equivalent features to its own proprietary protocols. Accordingly, Foundry believes that PWGSC accepted DND's position that it required Cisco products because it did not fully understand the interoperability issue.

Referring to Computer Talk and Flolite mentioned in the GIR, Foundry submitted that these cases have no direct application to this complaint. More specifically, referring to Computer Talk, it submitted that, in the current circumstances, there were other ways to describe DND's interoperability requirement that are consistent with open competition, such as it proposed in its questions dated October 23, 2001.¹¹ Furthermore, Foundry submitted that recent solicitations¹² for network switches illustrate alternate ways of expressing the requirement for interoperability with existing equipment that are consistent with fair and open tendering procedures.

Citing a decision of the Procurement Review Board of Canada,¹³ Foundry submitted that it is not enough for a government entity to define its requirements by reference to a specific product by name, to add on the words "or equivalent" and to require that the "equivalent" product match all the proprietary features of the product used as the standard. This practice, Foundry submitted, deprives the notion of "equivalency" of any meaning.

Foundry indicated that it has never disputed that DND is entitled to express its "real and reasonable needs" nor has it ever suggested that the Crown is obliged to compromise its legitimate operational requirements to suit Foundry's products. Indeed, Foundry argued that its position is that it can meet or exceed all the Crown's legitimate operational requirements. However, entities may not adopt unjustifiable and unnecessarily restrictive specifications that do not serve legitimate operational requirements and that become a disguised means of disqualifying suppliers that are capable of offering an "equivalent" solution to the specified brand-name product.

Foundry further submitted that, although amendment Nos. 006 and 007 to the solicitation responded to some of its questions, many critical and "show-stopping" questions¹⁴ remained unaddressed or were not acknowledged in those amendments. Instead, in an e-mail dated October 25, 2001, PWGSC advised Foundry that it would not revise the requirement for supporting Cisco protocols because these protocols had to be supported in order to achieve interoperability with Cisco products. Foundry submitted that this response was factually incorrect, since certain Cisco products in place at CFB Borden already interoperate through non-Cisco protocols.¹⁵ It submitted that the GIR does not make a convincing case that its products would "compromise" DND's legitimate operational requirements and that PWGSC and DND have the onus to make that case before the Tribunal.¹⁶

Foundry submitted that the Crown's decision not to provide a list of the installed base of equipment at CFB Borden or a network diagram is absolutely devoid of merit. Foundry submitted that having drawings that can be linked to a list of existing equipment and protocols used on the installed equipment would allow Foundry and its resellers to design a solution that would best meet DND's "real and reasonable" needs. It further submitted that, in some cases, a mix of Foundry and Cisco components may provide the best solution, but there is no way to determine the most cost-effective solution without this basic information.

Foundry submitted that the type of information that it was seeking in this instance had been made available in previous solicitations involving a Canadian Forces base. Furthermore, it submitted that, if it had won the competition, the Crown certainly would not have refused entry to CFB Borden to its engineers for the purpose of installing or troubleshooting the equipment due to security concerns. Moreover, Foundry submitted that, if there were legitimate security concerns about the existing network, which it denied, these could have been easily addressed by means of a confidentiality agreement. Foundry argued that the denial of information in this instance was for no other purpose than to create an obstacle for Foundry. It stated that open tendering implies the sharing of certain information with potential suppliers. Foundry noted that providing the requested information to any potential supplier is not releasing it to the "public", as PWGSC suggested.

Foundry indicated that PWGSC's response in the GIR to its query concerning Cisco protocols and features not currently used at CFB Borden contradicted PWGSC's response to Foundry's objection.¹⁷

TRIBUNAL'S DECISION

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. Furthermore, at the conclusion of the inquiry, the Tribunal must determine whether the complaint is valid on the basis of whether the procedures and other requirements prescribed in respect of the designated contract have been observed. Section 11 of the Regulations further provides that the Tribunal is required to determine whether the procurement was conducted in accordance with the applicable trade agreements, which, in this instance, are NAFTA and the AIT.

Article 1007(1) of NAFTA stipulates that parties shall ensure that their entities do not prepare, adopt or apply any technical specification with the purpose or the effect of creating unnecessary obstacles to trade. Article 1007(2) provides, in part, that each party shall ensure that any technical specification prescribed by its entities is, where appropriate, specified in terms of performance criteria rather than design or descriptive characteristics. Moreover, Article 1007(3) provides that:

Each Party shall ensure that the technical specifications prescribed by its entities do not require or refer to a particular trademark or name, patent, design or type, specific origin or producer or supplier unless there is no sufficiently precise or intelligible way of otherwise describing the procurement requirements and provided that, in such cases, words such as "or equivalent" are included in the tender documentation.

Article 1008(1) of NAFTA provides that each party shall ensure that the tendering procedures of its entities are applied in a non-discriminatory manner. In this context, Article 1013(1) provides that tender documentation shall contain all information necessary to permit suppliers to submit responsive tenders, including a complete description of the goods or services to be procured and any other requirements, including technical specifications, conformity certification and necessary plans, drawings and instructional materials. Article 1013(2)(b) further provides that entities shall "reply promptly to any reasonable request for relevant information made by a supplier participating in the tendering procedure, on condition that such information does not give that supplier an advantage over its competitors in the procedure for the award of the contract."

Articles 504(2) and (3) of the AIT prohibit discrimination, including:

[504(3)](b) the biasing of technical specifications in favour of, or against, particular goods or services, including those goods or services included in construction contracts, or in favour of, or against, the supplier of such goods or services for the purpose of avoiding the obligations of this Chapter; and
[504(3)](g) the unjustifiable exclusion of a supplier from tendering.

The Tribunal will determine:

Addressing the question relating to the specification, the Tribunal finds that the RFP, as amended, as it relates to the requirement that any product proposed must support a number of Cisco protocol standards, functions and features, breaches the provisions of NAFTA and the AIT.

The Tribunal notes that Annex "A" to the RFP lists the protocols that are currently in use at CFB Borden and that, according to PWGSC, provide essential functionality for the MAN. It is stated that "[t]he current functionality and maintainability of the Borden MAN requires that the above protocols continue to be used." Most of the protocols listed are proprietary to Cisco.

The Tribunal notes that DND and PWGSC tried to amend the specification in the original RFP in order to allow potential suppliers to propose non-Cisco switches that are equivalent in form, fit, function and interoperability with the switches of the MAN at CFB Borden. However, in the Tribunal's opinion, the specification, as amended and as further clarified by PWGSC during the bidding process, specifically on October 25, 2001, did not achieve this result. In the Tribunal's opinion, the amended RFP fails to allow, as compliant, non-Cisco switches that could interoperate with the existing Cisco switches using the standards, functions and features of compatible standards-based protocols instead of those of the Cisco proprietary protocols.

Because, in this instance, the RFP required that all products support the standards, functions and features of a particular and proprietary brand-name solution (i.e. Cisco protocols) when the required functionality could be supported by an equivalent solution (i.e. standards-based protocols), it is the Tribunal's opinion that this amounts to the biasing of technical specifications against the products of a supplier, in this case, Foundry. In addition, the Tribunal is of the view that it clearly constitutes a breach of Article 1007(2)(a) of NAFTA, under which technical specifications must be specified in terms of performance criteria rather than descriptive characteristics.

In respect of PWGSC's submission that the trade agreements do not prohibit the use of a brand name or equivalent specifications in circumstances such as the ones in this case, the Tribunal notes that the trade agreements not only allow but require that entities set out their requirements fully and completely in solicitation documents, subject only to expressing those requirements preferably using performance specifications over design specifications and over brand name or equivalent specifications that are to be used, unless there is no sufficiently precise way of otherwise describing the procurement requirements.

PWGSC submitted that, in some respects (e.g. certain protocols or functionalities not currently in use at CFB Borden, such as port density, the height and weight of certain equipment and redundancy features of certain other equipment), Foundry attempted to influence the formulation of DND's operational requirements in the RFP to suit its products. The Tribunal has often stated, and Foundry agrees with that view, that procuring entities do not have to compromise their legitimate operational requirements to accommodate bidders. Nevertheless, in the Tribunal's opinion, not all requirements can be qualified as "legitimate operational requirements". Instead, the Tribunal is of the view that, when it is claimed that a function, a feature or any other requirement constitutes a "legitimate operational requirement", the procuring entity must be able to demonstrate why such a function or feature is legitimately required to fulfil its needs and to achieve the targeted end result. A higher threshold will be applicable when conformity to the standards, functions and features of a particular brand name or a proprietary solution is described as a mandatory requirement.

Indeed, by requiring the support of Cisco proprietary protocols, it was clear that this would preclude non-Cisco suppliers from bidding on this procurement. This kind of restrictive specification constitutes an exception to the open specification and tendering procedures normally applicable under the trade agreements. Because, in the circumstances, the government is the party that used this exception, in the Tribunal's view, it has the burden to justify its use.

Having carefully examined the evidence on this point, including Tab D of Foundry's comments on the GIR, the Tribunal finds that PWGSC and DND failed to establish the necessity for this restriction. It finds that no rationale was given by PWGSC and DND in order to explain why the solution proposed by Foundry, i.e. the standards-based protocols, could not fulfil DND's operational requirements. No convincing reasons to explain how this may have compromised DND's military requirements for interoperability and performance of replacement parts of the MAN at CFB Borden were put forward. In this case, the Tribunal is persuaded that DND and PWGSC could have easily formulated their requirements in order to comply with the trade agreements by describing the required features using language like "support for (or compatibility with)" Cisco proprietary protocols, as they did in other procurements.

The Tribunal notes that, during the solicitation process, Foundry or any other bidder was and is at liberty to propose, for PWGSC and DND's consideration, alternate approaches or solutions to issues raised by the requirements relating to, for example, port density or weight and height limitations. The enquiry provisions of the RFP provide for this. It may turn out that, for such matters, arguably not critical from an operational point of view, arrangements could be found that would not compromise DND's legitimate operational requirements, while favouring fair and greater competition. The Tribunal is aware that such arrangements, when allowed, are not necessarily or always without cost implications for the entities concerned. For example, in this case, it could be that accommodating certain height limitations would require DND to incur additional expenditures to purchase new equipment racks or to modify existing ones and other directly related expenditures. In the Tribunal's view, such costs, where significant, represent identifiable conversion costs that can be considered transition costs and, as such, be assumed by the bidders proposing the alternative.

With respect to Foundry's objection concerning DND's requirement in the RFP for certain protocols or functionalities not currently in use at CFB Borden, the Tribunal notes that it knows of no rule in the trade agreements that prohibits entities from anticipating their future needs and reflecting those needs in their statement of requirements.

With respect to the question of whether PWGSC and DND failed to provide Foundry with information necessary and essential to bid, the Tribunal finds that this ground of complaint is valid.

The trade agreements are clear on this point. Tender documentation must contain all information necessary to permit suppliers to submit responsive tenders, including technical specifications and plans. The primary intent of this procurement is not the ad hoc purchase of equipment to replace failed switches in an otherwise fully established network. The RFP clearly indicated that the additional equipment was primarily intended to upgrade and augment the switch equipment in the existing infrastructure, thus completing the second phase of a three-phase network development plan. In this context, the Tribunal is of the view that Foundry's request for additional information on existing network devices, including a network diagram, was reasonable. In the Tribunal's opinion, Foundry was entitled to receive this information to finalize its bid, and PWGSC and DND breached the trade agreements by refusing to make it available.

PWGSC submitted that making such information available to the public would jeopardize DND's legitimate security requirements. The Tribunal notes that, except for the general mention that the contract is a defence contract within the meaning of the Defence Production Act ¹⁸ and that it shall be read accordingly, there is no specific provision in the RFP indicating that the solicitation relates to or includes classified or sensitive information. Nonetheless, assuming confidential or sensitive information was involved in this instance, a matter that the Tribunal will not address, the Tribunal is of the view that there existed several known and tested methods whereby such information could have been provided to potential suppliers, such as Foundry, without increasing the vulnerability of CFB Borden's MAN to security violations.

Foundry requested, as a remedy, that any contract awarded be cancelled and a new solicitation issued or that it be compensated for the lost opportunity to compete for this requirement and to profit therefrom. The Tribunal notes that a contract for this solicitation was awarded to Bell on November 28, 2001, and that performance of the contract is well underway. In addition, there is no basis to determine with certainty whether Foundry would have won this solicitation, since it did not submit a bid. Accordingly, the Tribunal will not recommend that the contract awarded to Bell be cancelled and that a new solicitation for this procurement be issued. However, for the reasons stated above, it believes that Foundry was deprived of a fair opportunity to compete for this solicitation, to be the successful bidder and to profit from this opportunity. Accordingly, the Tribunal will recommend that Foundry be compensated for this lost opportunity.

Given the circumstances of this case (eight compliant proposals were received by PWGSC and a contract awarded at a known price), the Tribunal believes that the basis for determining compensation in this instance is clear and that there is no need for the parties to make a joint submission to the Tribunal. Consequently, the Tribunal will recommend that Foundry be compensated by an amount equal to one ninth (the number of known interested suppliers in this instance) of the profit that it would have made, if any, if it had submitted a proposal for a price of one dollar less than that of Bell.

DETERMINATION OF THE TRIBUNAL

In light of the foregoing, the Tribunal determines that the procurement was not conducted in accordance with the provisions of NAFTA and the AIT and that the complaint is therefore valid.

Pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends that Foundry be compensated one ninth of the profit that it would have made, if any, if it had submitted a proposal for a price of one dollar less than that of Bell.

Pursuant to subsection 30.16(1) of the CITT Act, the Tribunal awards Foundry its reasonable costs incurred in relation to preparing and proceeding with the complaint.

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

2 . Critical systems, such as the 911 addressing database and Military Police dispatching, are connected to the MAN. The 400 Helicopter Squadron and G3 Operations units rely on the MAN for issuing and receiving their operational orders and obtaining their mission-critical information. The MAN also provides approximately 3,000 personnel members with access to all reference material, such as regulations, orders, directives and telephone books. Communication with headquarters is on the MAN, as are the financial, human resources and pay systems and other administrative functions.

3 . 32 I.L.M. 289 (entered into force 1 January 1994) [hereinafter NAFTA].

4 . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.intrasec.mb.ca/eng/it.htm> [hereinafter AIT].

5 . S.O.R./93-602 [hereinafter Regulations].

6 . S.O.R./91-499.

7 . Source, GIR, Exhibit 2.

8 . Canada's Electronic Tendering Service.

9 . See GIR, Exhibit 10 at 3.

10 . Re Complaint Filed by Computer Talk Technology (26 February 2001), PR-2000-037 (CITT) [hereinafter Computer Talk]; Re Complaint Filed by Flolite Industries (8 May 1998), PR-97-045 (CITT) [hereinafter Flolite].

11 . In its questions, Foundry asked PWGSC whether the requirement to support Cisco protocols could be revised to language such as: "Must provide equivalent features to Cisco inter-switch Link (ISL) Protocol and must inter-operate with Cisco products."

12 . See paras. 13 and 14 and Tabs B and C of Foundry's comments on the GIR.

13 . Re Complaint Filed by Cardinal Industrial Electronics (27 February 1990), D89PRF6608-021-0005 (PRB).

14 . These included Foundry's question relating to changing the description of requirements that specified Cisco proprietary protocols and features, its request for information relating to which existing devices are being used with the switches listed in the RFP and whether the height limitation of 25.2 in. could be dropped or revised.

15 . See paras. 23 and 24 of Foundry's comments on the GIR.

16 . See para. 27 of Foundry's comments on the GIR; Re Complaint Filed by Foundry Networks (23 May 2001), PR-2000-060 (CITT).

17 . See paras. 42 to 44 of Foundry's comments on the GIR.

18 . R.S.C. 1985, c. D-1.

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Initial publication: March 13, 2002