COGNOS INCORPORATED
Determinations
COGNOS INCORPORATED
File No. PR-2002-017
TABLE OF CONTENTS
Ottawa, Friday, November 29, 2002
File No. PR-2002-017
IN THE MATTER OF a complaint filed by Cognos Incorporated 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 (the Tribunal) determines that the complaint is valid.
Pursuant to subsections 30.15(2) and (3) of the Canadian International Trade Tribunal Act, the Tribunal recommends, as a remedy, that Cognos Incorporated be awarded one third of the profit that it would have earned if it had submitted a bid to perform the work at a price of one dollar lower than the estimated cost of the proposed contract. Using this as the basis, the Tribunal recommends that the parties develop a joint proposal for compensation that recognizes: (a) the seriousness of the deficiency of the procurement process; (b) the degree to which the complainant was prejudiced; and (c) the prejudice caused to the integrity and efficiency of the competitive procurement system. This proposal is to be presented to the Tribunal within 30 days of the publication of this determination and statement of reasons. Should the parties be unable to agree on the amount of compensation, the parties shall report back to the Tribunal separately within the same 30 days, following which the Tribunal will issue its recommendations in this respect.
Finally, pursuant to subsection 30.16(1) of the Canadian International Trade Tribunal Act, the Tribunal awards Cognos Incorporated its reasonable costs incurred in preparing and proceeding with the complaint.
Richard Lafontaine
Richard Lafontaine
Presiding Member
Michel P. Granger
Michel P. Granger
Secretary
| Date of Determination and Reasons: |
November 29, 2002 |
| Tribunal Member: |
Richard Lafontaine, Presiding Member |
| Investigation Manager: |
Daniel Chamaillard |
| Counsel for the Tribunal: |
Marie-France Dagenais |
| Complainant: |
Cognos Incorporated |
| Counsel for the Complainant: |
Ronald D. Lunau |
| Intervener: |
Core Software Corp. |
| Counsel for the Intervener: |
William J. Smith |
| Government Institution: |
Department of Public Works and Government Services |
| Counsel for the Government Institution: |
David M. Attwater |
STATEMENT OF REASONS
COMPLAINT
On July 16, 2002, Cognos Incorporated (Cognos) 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. 21120-017897/A) by the Department of Public Works and Government Services (PWGSC) on behalf of Correctional Service of Canada (CSC) of informatics professional services for the full-scale migration of CSC's Offender Management System (OMS) application to a Web-based environment.
Cognos alleged that, contrary to the provisions of the North American Free Trade Agreement,2 the Agreement on Government Procurement 3 and the Agreement on Internal Trade,4 PWGSC and CSC are using a limited tendering procedure that is not supported by any of the permissible grounds in the applicable trade agreements. Cognos also alleged that CSC failed to express its requirements in terms of performance criteria.
Cognos requested, as a remedy, that the Tribunal recommend that the Advance Contract Award Notice (ACAN) be cancelled and that the procurement be conducted through an open competition, as provided for in the applicable trade agreements. In the alternative, Cognos requested that the Tribunal recommend that it be compensated for 50 percent of the profit that it would have earned, if it had submitted a bid at a price of one dollar lower than the estimated cost of the proposed contract. In addition, Cognos requested that it be awarded the costs of proceeding with the complaint.
On July 18, 2002, 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 July 29, 2002, PWGSC certified, pursuant to subsection 30.13(4) of the CITT Act, that the procurement was urgent and that a delay in awarding the contract would be contrary to the public interest. PWGSC requested that the Tribunal take immediate steps to rescind the postponement of award order issued on July 18, 2002.
On July 31, 2002, Cognos objected to the rescission of the postponement of award order on the grounds that PWGSC provided no explanation or information to support the statement that the procurement was urgent and that a delay in awarding the contract would be contrary to the public interest. The Tribunal was notified by Cognos that a motion would be delivered to the Federal Court of Canada seeking an interim injunction to prevent the contract award and that an application would be filed for a judicial review in relation to the certification by PWGSC.
On August 1, 2002, the Tribunal notified the parties that it had rescinded its order of July 18, 2002. The same day, the Tribunal received, from Cognos, a copy of a notice of application with the Federal Court-Trial Division, in connection with the above-mentioned motion. On August 16, 2002, the Federal Court of Canada dismissed the above-mentioned motion. On August 16, 2002, the contract was awarded to Core Software Corp. (Core).
On August 6, 2002, PWGSC requested an extension of time to file the Government Institution Report (GIR). The Tribunal granted the extension. On August 19, 2002, PWGSC filed a GIR with the Tribunal in accordance with rule 103 of the Canadian International Trade Tribunal Rules.6 On August 26, 2002, Cognos requested an extension to file its comments on the GIR. The Tribunal granted the request and, on September 6, 2002, Cognos filed its comments on the GIR. Further to its request, Core was granted intervener status by the Tribunal on September 6, 2002. On September 20, 2002, Core filed comments on the GIR.
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 April 19, 2002, an ACAN announcing the procurement of informatics professional services for the full-scale migration of CSC's OMS application to a Web-based environment was published by PWGSC on MERX. Suppliers that considered themselves fully qualified and available to provide the goods and services, as described in the ACAN, were required to submit a statement of capabilities before May 3, 2002.
The ACAN provides, in part, the following criteria in regard to the procurement:
DEFINITION OF THE REQUIREMENT:
[CSC] requires Informatics Professional Services for Powerhouse migration for the entire Offender Management System Renewal (OMSR) application to a web based environment . . . The conversion is to be achieved by performing the automated design recovery of the existing Powerhouse application . . . using the Core Chameleon Migration Software (CCMS) automated generators.
TRADE AGREEMENTS:
This procurement is subject to the [AGP], [NAFTA] and the [AIT] where limited tendering procedures are applicable because "where, for works of art, or for reasons connected with the protection of patents, copyrights or other exclusive rights, or proprietary information or where there is an absence of competition for technical reasons, the goods or services can be supplied only by a particular supplier".
NAME AND LOCATION OF PROPOSED CONTRACTOR:
Core Software Corporation
1668 Woodward Drive
Ottawa, Ontario
LIMITED TENDERING REASON:
[CSC's] requirement is to secure the capability and expertise of a company that has the tools and associated services to perform Powerhouse design recovery and full-scale migration of the [OMS] currently maintained by CSC. Core Chameleon Migration Software (CCMS) is the only automated conversion tool set specifically designed to support a Powerhouse 4GL and Interbase RDBMS to Visual Basic (COM+, ASP) and [Oracle] RDBMS migration; CSC's target environment. CCMS is proprietary to Core Software Corporation. Based on the CCMS being solely engineered to migrate Powerhouse based applications, the following items represent a subset of the features that make Core Software, with its CCMS toolset uniquely qualified to undertake the OMS migration project;
Ability to parse existing legacy Powerhouse source code into . . . a structured CCMS Repository while capturing and preserving 100% of all business logic and business rules.
Automated conversion of a Powerhouse character based application to a web based user interface (COM+, ASP, Active Reports, PL/SQL);
Conversion of OMS forms to Active Reports producing Abode Acrobat Output.
Automated migration of Interbase RDBMS to Oracle RDBMS including PL/SQL packages and procedures.
Automated Forward Engineering of all parsed business logic and business rules to COM+, ASP while capitalizing on the ability to dynamically enhance the navigation and user interface.
Re-documentation toolset providing the ability to generate system documentation for every Powerhouse module loaded into the Chameleon Repository.
Impact Analysis toolset supporting features that enable CSC to assess the impact of changes and enhancements (supporting both the legacy and newly migrated OMS application).
The National Parole Board currently operates as a module within the existing OMS application and technical infrastructure and is well underway in migrating its Powerhouse 4GL and Interbase RDBMS components with [CCMS]. Thus, for compatibility and consistency of results, as well as continuity [CCMS] must be used for this requirement.
PROPOSED CONTRACT PERIOD:
The contract period shall be from date of contract to April 28, 2003.
ESTIMATED COST OF THE PROPOSED CONTRACT.
$5,271,276.25 (including GST)
CLOSING DATE AND TIME FOR WRITTEN SUPPLIER SUBMISSION OF STATEMENT OF CAPABILITIES
If no other supplier submits, on or before the closing date, a Statement of Capabilities that meets the requirements set out in the ACAN, the contracting authority may then proceed with the award. However, should a Statement of Capabilities be found to meet the requirements set out in the ACAN, then the contracting authority will proceed to a full tendering process.
Suppliers who consider themselves fully qualified and available to provide the services/goods described herein, may submit a statement of capabilities in writing to the contact person identified in this Notice on or before the closing date of this Notice. The statement of capabilities must clearly demonstrate how the supplier meets the advertised requirements.
Following the publication of the ACAN on April 19, 2002, Cognos wrote to PWGSC on May 2, 2002, challenging the ACAN on the following basis:
· Non-competitive procurement process
· Misleading statement of requirement
· Proposed solution has not been proven in an application/organization of the size of CSC
· Potential intellectual property infringement by Core
On May 21, 2002, PWGSC responded to Cognos's challenge to the ACAN, indicating that Cognos had not demonstrated that it could meet the requirements of the ACAN. In its letter, PWGSC listed 28 criteria that CSC had developed to identify its requirements for the migration of the OMS and that it would be proceeding with the procurement as planned if no other supplier submitted a statement of capabilities on or before the closing date of the ACAN.
On May 24, 2002, Cognos wrote to PWGSC in reply to its letter of May 21, 2002, inquiring as to whether the May 21, 2002, letter was PWGSC's dismissal of Cognos's May 2, 2002, challenge to the ACAN. On May 27, 2002, PWGSC responded to Cognos, indicating that, unless Cognos had additional information to submit to CSC, Cognos's challenge to the ACAN would not be considered further and that PWGSC would be proceeding with the proposed procurement.
On May 28, 2002, PWGSC confirmed with Cognos that a meeting between Cognos, CSC and PWGSC had been scheduled for June 4, 2002, to discuss the challenge to the ACAN. The meeting was subsequently held on June 17, 2002. That afternoon, PWGSC informed Cognos that CSC had urged the contracting authority at PWGSC to proceed with the contract award to Core as soon as possible. On June 19, 2002, Cognos met with a senior official at CSC to discuss the sole-sourcing of the contract award. At that time, CSC informed Cognos that an inquiry would be initiated in relation to the sole-sourcing of the contract.
On July 11, 2002, during a meeting with Cognos, PWGSC informed Cognos that CSC was pressuring PWGSC to proceed with the award of the contract to Core. Cognos then informed PWGSC that it was going to follow up with CSC in regard to the June 19, 2002, meeting. Because of comments received by PWGSC and its unsuccessful attempt to meet with CSC officials in mid-July, Cognos filed its complaint with the Tribunal on July 16, 2002, in the belief that the contract award to Core was imminent.
POSITIONS OF PARTIES
PWGSC's Position
PWGSC submitted that the use and contents of an ACAN to advertise a directed contract are based exclusively on Crown policy and, pursuant to section 11 of the Regulations, the use and contents of the ACAN are not matters over which the Tribunal has jurisdiction. According to PWGSC, CSC determined that the automated migration of the OMS was necessary and that its due diligence efforts established that only a single service provider was capable of performing the necessary migration. Once CSC had defined its requirements for an automated migration, it consulted with the Gartner Group to identify those suppliers that had an existing software tool capable of automated migration of an InterBase database and Powerhouse application. The Gartner Group advised that only Core had an existing software tool capable of automated migration of the OMS. On this basis, CSC requested that PWGSC direct a contract to Core.
PWGSC submitted that the AIT, NAFTA and the AGP allow for limited tendering procedures where only one supplier is capable of meeting the requirements of a procurement. Under the AIT, Article 506(12)(a) provides for limited tendering procedures "to ensure compatibility with existing products" where only one supplier is capable of meeting the requirements of a procurement. Also, Article 506(12)(b) of the AIT allows limited tendering procedures "where there is an absence of competition for technical reasons and the goods or services can be supplied only by a particular supplier". NAFTA and the AGP provide for similar limited procedures, on the same basis.
PWGSC submitted that the complaint was filed either prematurely or late and, therefore, should be dismissed. According to PWGSC, the complaint could not have been filed under subsection 6(2) of the Regulations, as a denial of relief is a condition precedent to filing a complaint under subsection 6(2). PWGSC further submitted that subsection 6(2) does not provide for a constructive denial of relief. PWGSC submitted that, prior to Cognos filing the complaint with the Tribunal, relief was never denied by PWGSC. According to PWGSC, it was only on August 1, 2002, that relief was denied; therefore, Cognos could not have had either actual or constructive knowledge of a denial of relief prior to filing its complaint on July 16, 2002, under subsection 6(2).
PWGSC also submitted that Cognos knew the basis of its complaint as early as May 2, 2002, when it objected to PWGSC's ACAN and, as such, was time-barred in filing its complaint only on July 16, 2002, which was well beyond the 10-day time limit, pursuant to subsection 6(1) of the Regulations.
With respect to the allegation that the requirement was expressed in other than performance criteria, PWGSC submitted that the definition of the requirement in the ACAN and, more specifically, the detailed breakdown of the requirements in the correspondence of May 21, 2002, express CSC's requirements in terms of performance and not design or description. CSC requires a service provider to perform automated migration of the OMS.
PWGSC submitted that it expressly denies that Cognos's solution was prejudged. PWGSC also submitted that Cognos was given ample opportunity to meet with PWGSC and CSC to establish its capability to satisfy CSC's requirements. According to PWGSC, Cognos did not submit a statement of capabilities in its challenge of the ACAN and, as such, did not establish that it was a potential supplier of services.
In conclusion, PWGSC submitted that the use of limited tendering procedures was fully justified for this solicitation and that the complaint should be dismissed.
PWGSC requested its complaint costs.
Core's Position
Core supported and affirmed PWGSC's response to the complaint. Core maintained that, given the specific objectives of CSC's migration project, the use of an automated system is a necessary functional requirement and not an unwarranted restriction in the contract specification. Core submitted that using an automated migration tool is not merely a means to achieve the same end as a manual effort, but an entirely different process.
Core submitted that the primary difference is that Core's automated process applies a uniform logic and standard set of rules and programming conventions to replicate the functionality of the legacy system. According to Core, a team of programmers could not duplicate this as effectively and as consistently, simply because the team members would have different levels of expertise and would apply their individual interpretation of the application functionality. Core submitted that the automated approach would inevitably achieve better replication on a consistent basis.
Core also submitted that, prior to the ACAN, CSC undertook an extensive due diligence exercise to determine its requirements. This exercise involved extensive review, discussion and evaluation with potential suppliers, including Core. Core believed that CSC was engaged in an intensive round of discussions with Cognos and other vendors concerning the OMS Renewal project and that this process continued for approximately two years. At the end of this process, CSC rejected Cognos's proposed solution and specified an automated system for its migration project. Core claimed that the decision was neither rash nor ill informed and that Cognos suffered no procedural prejudice as a consequence.
Cognos's Position
Under the trade agreements, Cognos alleged, competition is the norm, and the exceptions to competition are narrowly construed. Cognos further submitted that the ACAN simply lists, as CSC's requirements, "a subset" of the features of Core's software product that is said to make that software "uniquely qualified" to undertake the migration project. Cognos submitted that, as it is the supplier of CSC's installed base of "Powerhouse", it is clearly a potential supplier to re-platform this software. However, CSC has rejected Cognos as a potential supplier because CSC has already decided which product it wants to buy (i.e. CCMS).
Cognos submitted that this is not a case where only one supplier can meet CSC's requirements because of protection of patents, copyright or other exclusive rights, or where there is an absence of competition for technical reasons. Cognos submitted that the only exclusive rights that have been identified in the ACAN are the rights that Core has in its own product and that those are not the types of exclusive rights that the trade agreement exceptions address.
Cognos also submitted that the "exclusive rights" exemption does not permit the sole-sourcing of a contract to one supplier only because that supplier is offering a product that is proprietary to it. Cognos submitted that, if CSC's reasoning in this case were upheld, the result would be that government entities could direct a contract to whatever publisher of software it wanted, because every publisher's software is proprietary to it. Cognos submitted that the exemptions relating to "exclusive rights" also require that no reasonable alternative or substitute exists and that, as such, the entity must also demonstrate that no alternative or substitute means of satisfying the entity's requirements exist.
In its response to the GIR, Cognos argued that it acted responsibly and took the high road, attempting to have its concerns addressed by senior officials within both PWGSC and CSC. According to Cognos, instead of reacting to its concerns, CSC pressured PWGSC to proceed with the unjustified sole-source contract. Cognos submitted that the compensation for lost profit is not adequate in itself to recognize the full extent of the damage that has been caused to Cognos and to the integrity of the procurement process by CSC's actions. Cognos further submitted that, even if a competition were now held, any proposal that it would submit would not receive a fair evaluation by CSC and would inevitably result in further challenges and litigation. Cognos requested, as a result, that it also be awarded additional compensation in the amount of $100,000.
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.
The main issues before the Tribunal are whether the complaint was filed in accordance with section 6 of the Regulations, whether Cognos was a potential supplier and whether the procurement was properly conducted pursuant to the requirements set out in NAFTA, the AIT and the AGP.
The Tribunal will first address PWGSC's submission that the complaint was either filed late or prematurely.
Pursuant to subsection 6(1) of the Regulations, a complaint must be filed not later than 10 working days after the day on which the basis of the complaint became known or reasonably should have become known to the potential supplier. However, pursuant to subsection 6(2), a potential supplier that has made a timely objection to the relevant government institution regarding a procurement and is denied relief may file a complaint with the Tribunal within 10 working days after the day on which the potential supplier has actual or constructive knowledge of the denial of relief.
The Tribunal is of the view that Cognos's complaint was properly filed pursuant to subsection 6(2) of the Regulations. In the Tribunal's view, denial of relief may manifest itself in a number of ways, including direct communication to that effect by the relevant government institution, indirect knowledge of the government institution's decision and knowledge of the government institution's intentions or actions with respect to a procurement that had the effect of amounting to a denial. The Tribunal is of the opinion that Cognos's knowledge of the pressures exerted on PWGSC by CSC to award the contract to Core, together with the passage of time (May 1 to July 16, 2002) and Cognos's inability to arrange for a further meeting with senior CSC officials in mid-July, amounted to a denial of relief in this case. The official communication of the decision on August 1, 2002, was a mere formality. Based on the record, it is reasonable to conclude that CSC was resolutely pursuing the sole-source option with Core and that PWGSC was unable to convince CSC otherwise. Therefore, it was just a matter of time before PWGSC had to formally advise Cognos that relief was denied. Consequently, the Tribunal is of the view that Cognos had constructive knowledge of the denial of relief prior to July 16, 2002, and that it properly filed its complaint pursuant to subsection 6(2).
The Tribunal will now turn to whether the procurement of the designated contract was conducted in a manner contrary to the requirements of the applicable trade agreements.
The Tribunal is of the view that PWGSC and CSC improperly used the limited tendering provisions for the procurement at issue.
As has been established in previous Tribunal decisions,7 competition is the norm under the trade agreements, with limited tendering procedures being the exception. The onus is on the government institutions to establish that the decision to choose a limited tendering procedure is permitted under the applicable trade agreements in the particular circumstances of the case. The Tribunal is not satisfied that PWGSC and CSC have met the conditions of the trade agreements in this instance.
The Tribunal is of the view that, in lieu of an open competition process, PWGSC and CSC used a combination of in-house resources and external consultants to define their requirements and to determine the selection of a service provider and then used an ACAN to confirm the result. In this regard, the Tribunal reiterates that the use of an ACAN should not replace the process of open competition in the selection of suppliers, nor should it be treated as a flexible, more expeditious means of running or attempting to run a competitive procurement action.8
The Tribunal is not convinced that PWGSC and CSC, in publishing the ACAN at issue, were seeking reasonable alternatives or substitutes9 to an already prescribed solution and conversion tool. The Tribunal is of the view that the definition of the requirement and the limited tendering reason contained in the ACAN were drawn up in such a manner as to wittingly or unwittingly favour a preselected solution, as well as a product-specific conversion tool.
The Tribunal does not accept PWGSC's proposition that the definition of the requirement did not mean that a supplier had to use CCMS automated generators. The Tribunal is of the view that the definition, as stated in the ACAN, lends itself more credibly to the construction advanced by Cognos that the solution proposed by PWGSC and CSC is tied to the CCMS. The Tribunal is not convinced that the definition merely wished to convey that, subject to the receipt of a statement of capabilities that met the requirements set out in the ACAN, CSC intended to award the contract to Core, which would do the necessary automated migration using CCMS automated generators.
The Tribunal is not convinced that no reasonable alternative or substitute exists to the Core solution. Indeed, the evidence leads it to believe that, on balance, there could well have been other possible solutions available, had the criteria been more goal-oriented in terms of the solution and not product-specific in terms of the conversion tool. The Tribunal is of the view that the prescribed solution and the tool to achieve it were restrictive and descriptive of a specific design and not in the nature of performance criteria, as they ought to have been. The migration of the OMS was not performance-based, in that it did not leave the supplier the flexibility of achieving the desired objectives without the use of automated migration and a particular software. In the Tribunal's view, therefore, the requirement was written in terms of design or descriptive characteristics and had the effect of limiting the options available to bidders by narrowing the range of acceptable solutions, which was not appropriate. Consequently, the Tribunal finds that the procurement was improperly sourced, as it does not meet the requirements of the trade agreements with respect to limited tendering.
The Tribunal further notes that PWGSC claims exclusive rights in the ACAN to justify its non-competitive procurement strategy. The fact that the preselected conversion tool is proprietary in nature is not a reason that can properly justify a sole-source procurement, where the solution or approach was improperly prescribed at the outset. This cannot be acceptable. If it were, government institutions could justify an improper selection process by dressing it up in the cloak of exclusive rights or such similar exemption under the trade agreements.
The Tribunal now turns to the issue of whether the complainant was a potential supplier. The Tribunal is of the view that Cognos was a potential supplier for the procurement at issue. The Tribunal rejects PWGSC's submission that, by not presenting a statement of capabilities in response to the ACAN, Cognos was disqualified. The Tribunal is of the view that a complainant need not respond to an ACAN when the procurement is properly challenged or objected to by reason of its not meeting the requirements of the trade agreements. The Tribunal is of the view that the procurement method was properly challenged in this case. Furthermore, the Tribunal does not accept PWGSC's submission that Cognos was not a supplier of services, but of software, and thus did not qualify. The Tribunal is of the view that the requirement in the ACAN is not clear in this respect. The reference to the requirement "for tools and associated services" in the ACAN is at best vague. However, even accepting that the requirement was clear, Cognos's objection to the ACAN challenges its correctness. The ultimate solution could conceivably involve both a goods and services component. Therefore, in the Tribunal's view, it was incorrect on PWGSC's part to conclude that Cognos is not a potential supplier.
In light of the above, therefore, the Tribunal finds that the complaint is valid.
The Tribunal notes Cognos's submission that PWGSC issued a contract to Core on or about August 16, 2002, and that, since that date, it appears that Core has been working on migrating the OMS database and application. Cognos is also of the belief that, even if a competition were now held, any proposal that it submitted would not receive a fair evaluation by CSC and would inevitably result in further challenges and litigation. With the foregoing in mind, the Tribunal is reluctantly of the view that the overall public interest would not be well served by terminating the designated contract awarded to Core and soliciting tenders by way of a public competition.
The Tribunal notes PWGSC's submission that the procurement was not for a total rebuild of the system, but rather for a renewal of the current system in the shortest time possible. The Tribunal also notes that there is no evidence that Cognos was proposing a rebuild solution. The Tribunal further notes that the ACAN and PWGSC's correspondence of May 21, 2002, do not make reference to the urgency of migrating the database and the application software. In fact, the ACAN allows for a possible full tendering process if a statement of capabilities were found to meet its requirements. The Tribunal also notes that PWGSC and CSC did not request that the express option be used for this complaint. Furthermore, the Tribunal notes the Federal Court of Canada's belief that the designated contract was still in the negotiation stage and that it would not be signed and performed immediately. The court did not believe that when the Tribunal reached its decision, the degree of performance of the contract would be such that its cancellation would be impossible for all practical purposes. The Tribunal further notes that the designated contract was awarded immediately following the Federal Court of Canada's decision not to grant an injunction with respect to its award. The Tribunal is of the view that PWGSC and CSC were intent on awarding the designated contract to Core, notwithstanding the challenge made by Cognos to the ACAN and notwithstanding that the ACAN or the correspondence issued by PWGSC on May 21, 2002, make no reference to an urgency in the matter. Quite the opposite, as mentioned above, the ACAN allowed for a competitive tendering process, should the need for it arise. Additionally, the Tribunal notes that Cognos participated in the OMS Renewal project for more than two years and understood that it would have an opportunity to compete for the project. Finally, the Tribunal notes Cognos's submissions to the effect that CSC, the client department, exerted intense pressure on PWGSC.
In determining the appropriate remedy, the Tribunal must consider all the circumstances relevant to the procurement, as set out in subsection 30.15(3) of the CITT Act. This includes taking into account the seriousness of any deficiency in the procurement process, the degree to which the complainant was prejudiced, the degree to which the integrity and efficiency of the competitive procurement system were prejudiced, and whether the parties acted in good faith.
In light of all the above, the Tribunal finds that there were serious deficiencies in the manner in which this procurement was handled. It is also of the view that the integrity and efficiency of the procurement system were prejudiced to a certain degree.
DETERMINATION OF THE TRIBUNAL
Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is valid.
Pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends, as a remedy, that Cognos be awarded one third of the profit that it would have earned if it had submitted a bid to perform the work at a price of one dollar lower than the estimated cost of the proposed contract. Using this as the basis, the Tribunal recommends that the parties develop a joint proposal for compensation that recognizes: (a) the seriousness of the deficiency of the procurement process; (b) the degree to which the complainant was prejudiced; and (c) the prejudice caused to the integrity and efficiency of the competitive procurement system. This proposal is to be presented to the Tribunal within 30 days of the publication of this determination and statement of reasons. Should the parties be unable to agree on the amount of compensation, they shall report back to the Tribunal separately within the same 30 days, following which the Tribunal will issue its recommendations in this respect.
Finally, pursuant to subsection 30.16(1) of the CITT Act, the Tribunal awards Cognos its reasonable costs incurred in preparing and proceeding with the complaint.
1 . R.S.C. 1985 (4th Supp.), c. 47 [hereinafter CITT Act].
2 . 32 I.L.M. 289 (entered into force 1 January 1994) [hereinafter NAFTA].
3 . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm> [hereinafter AGP].
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 . Re Complaint Filed by Foundry Networks (23 May 2001), PR-2000-060 (CITT); Re Complaint Filed by Novell Canada, Ltd. (17 June 1999), PR-98-047 (CITT).
8 . Re Complaint Filed by Array Systems Computing Inc. (16 April 1996), PR-95-023 (CITT); Re Complaint Filed by Encore Computer Ltd. (28 February 1992), G92PRF6631-021-0001 (PRB).
9 . See Article 1016(2)(b) of NAFTA, Article XV(1)(b) of the AGP and Article 506(12)(b) of the AIT.