L-3 COMMUNICATIONS ELECTRONIC SYSTEMS INC.

Determinations

L-3 COMMUNICATIONS ELECTRONIC SYSTEMS INC.
v.
DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES
File No. PR-2005-032

Order and reasons issued
Tuesday, February 7, 2006

TABLE OF CONTENTS

IN THE MATTER OF a complaint filed by L-3 Communications Electronic Systems 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.

BETWEEN

 

L-3 COMMUNICATIONS ELECTRONIC SYSTEMS INC.

Complainant

AND

 

THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES

Government Institution

ORDER OF THE TRIBUNAL

Pursuant to paragraph 10(c) of the Canadian International Trade Tribunal Procurement Inquiry Regulations, the Canadian International Trade Tribunal hereby dismisses the complaint.

Pursuant to section 30.16 of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards the Department of Public Works and Government Services its reasonable costs incurred in responding to the complaint, which costs are to be paid by L-3 Communications Electronic Systems Inc. The Canadian International Trade Tribunal’s preliminary indication of the level of complexity for this complaint case is Level 1, and its preliminary indication of the amount of the cost award is $1,000. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Canadian International Trade Tribunal, as contemplated in its Guideline for Fixing Costs in Procurement Complaint Proceedings. The Canadian International Trade Tribunal retains jurisdiction to establish the final amount of the award.

Meriel V. M. Bradford
Meriel V. M. Bradford
Presiding Member

James A. Ogilvy
James A. Ogilvy
Member

Ellen Fry
Ellen Fry
Member

Hélène Nadeau
Hélène Nadeau
Secretary

Tribunal Members:

Meriel V. M. Bradford, Presiding Member
 

James A. Ogilvy, Member
 

Ellen Fry, Member
   

Research Director:

Randolph W. Heggart
   

Senior Investigation Officer:

Cathy Turner
   

Counsel for the Tribunal:

Eric Wildhaber
   

Complainant:

L-3 Communications Electronic Systems Inc.
   

Intervener:

CAE Inc.
   

Government Institution:

Department of Public Works and Government Services
   

Counsel for the Government Institution:

Ian McLeod
 

Christianne M. Laizner
 

Susan D. Clarke

Please address all communications to:

The Secretary
Canadian International Trade Tribunal
Standard Life Centre
333 Laurier Avenue West
15th Floor
Ottawa, Ontario
K1A 0G7

Telephone: (613) 993-3595
Fax: (613) 990-2439
E-mail:

STATEMENT OF REASONS

INTRODUCTION

1. On October 20, 2005, L-3 Communications Electronic Systems Inc. (L-3) 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 procurement (Solicitation No. W8485-05TQ22/A) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of National Defence for the provision of hardware maintenance and support for air simulators and trainers.

2. L-3 alleged that PWGSC incorrectly declared its bid late. It requested, as a remedy, that the Tribunal recommend that PWGSC accept its bid. In addition, L-3 requested that the Tribunal order the postponement of the award of any contract in relation to the solicitation until the Tribunal determined the validity of the complaint.

3. On October 28, 2005, 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 It did not issue a postponement of award order in accordance with subsection 30.13(3) of the CITT Act.

4. On November 1, 2005, PWGSC informed the Tribunal that a contract had been awarded to CAE Inc. (CAE). On November 14, 2005, the Tribunal granted intervener status to CAE. On November 25, 2005, PWGSC filed a Government Institution Report (GIR) with the Tribunal in accordance with rule 103 of the Canadian International Trade Tribunal Rules.3 On December 6, 2005, CAE filed its comments on the GIR. On December 7, 2005, L-3 declined to provide comments on the GIR and requested that the case be decided on the basis of the existing record.

PROCUREMENT PROCESS

5. On July 5, 2005, PWGSC issued a Request for Proposal for the provision of hardware maintenance and support for air simulators and trainers. The original deadline for submitting proposals was 2:00 p.m. on August 29, 2005. This was subsequently extended to 2:00 p.m. on September 15, 2005.

6. At 12:45 p.m. on September 15, 2005, L-3 requested an extension to the deadline for submitting proposals. At 1:05 p.m. that same day, PWGSC advised L-3 that such an extension would not be possible. L-3 then asked if it could submit a bid by e-mail. At 1:11 p.m., PWGSC advised L-3 by telephone that it could not submit a bid by e-mail, but that a bid could be submitted by facsimile, provided the transmission was initiated prior to the bid closing time of 2:00 p.m.

7. At 1:57 p.m. on September 15, 2005, L-3 initiated a facsimile transmission to the central PWGSC facsimile machine. According to PWGSC, at 2:45 p.m., the PWGSC contracting officer was notified by the Bid Receiving Unit (BRU) that two bids had been received for the solicitation at issue and that a third, from L-3, had been initiated by facsimile transmission before the bid closing deadline and that the transmission was still in progress, although the document was coming through at a very slow pace. According to PWGSC, the supervisor of the BRU contacted L-3 regarding the slow transmission and was advised by L-3 that this was understood and that the complete transmission would likely take several more hours.

8. The facsimile transmission from L-3 continued for 433 minutes and 12 seconds, until 9:12 p.m. when the transmission was terminated. At that time, 167 pages had been received by PWGSC. Four additional facsimile transmissions were subsequently initiated by L-3 and received by the BRU later that evening.

9. According to PWGSC, on September 16, 2005, the contracting officer was advised by the supervisor of the BRU that there was a problem with L-3’s bid. The supervisor noted that the transmission that was initiated at 1:57 p.m. and terminated at 9:12 p.m. consisted of only 167 pages and that these pages started with Part 2 of L-3’s proposal, namely, the technical proposal, and contained technical data only, but not Part 1 of L-3’s proposal, namely, the financial proposal. Further, according to PWGSC, the other four facsimiles received from L-3 later in the evening had all been faxed well after the bid closing time and, thus, were deemed late and non-compliant with the bid closing deadline.

10. On the morning of September 16, 2005, the supervisor of the BRU contacted L-3 to inform it that there was a problem with its bid and that the portions transmitted after bid closing would have to be rejected. At 10:28 a.m. on September 16, 2005, the supervisor faxed to L-3 copies of the two pages of the BRU facsimile machine “Receive Report”. Later that morning, at 10:45 a.m., L-3 sent PWGSC a copy of a transmission report from its fax machine with the annotation “as discussed” on the cover page. At 1:44 p.m. on the same day, L-3 sent an e-mail to PWGSC attaching a PDF copy of the proposal that, it indicated, it had “officially” faxed to PWGSC on September 15, 2005, beginning at 1:57 p.m.4 It stated: “[t]his copy is provided to assist you with your evaluation.” The e-mail also indicated that L-3 had couriered hard copies to PWGSC. At 2:25 p.m., the supervisor forwarded to L-3 an e-mail from PWGSC’s service provider for the facsimile machine installation in the BRU, explaining the meaning of the error code shown in PWGSC’s transmission report.

11. PWGSC returned to L-3 the originals of the four facsimile transmissions which had been initiated after the bid receipt deadline, apparently by mail, and did not retain any copies, with the exception of the cover sheet of the financial portion of the bid, on which it stamped “LATE EN RETARD”. PWGSC also made the handwritten annotation “Revision” on the cover sheet. The accompanying form letter, dated September 16, 2005, from PWGSC enclosed with the returned documents indicated the following: “. . . We regret to advise you that your bid, in response to the above noted solicitation, is returned to you for the following reason: . . . Late Revision . . . .” According to L-3, it received this letter on September 27, 2005.

12. On October 3, 2005, L-3 faxed a letter to PWGSC in which it objected to the return of the financial evaluation section of its proposal and requested that PWGSC reconsider the rejection and accept the returned section of its proposal. In a letter dated October 4, 2005, which was faxed on October 5, 2005, PWGSC informed L-3 that the status of its bid as “late” would stand. The latter attached PWGSC’s transmittal records and a print-out of the e-mail message from PWGSC’s service provider that explained the error code. According to L-3, it received this response on October 5, 2005. On October 5, 2005, L-3 delivered to PWGSC the four facsimile transmissions previously returned by PWGSC. PWGSC sent the documents back to L-3 that same day and did not retain a copy.

13. On October 20, 2005, L-3 filed its complaint with the Tribunal.

TRIBUNAL’S ANALYSIS

14. Section 6 of the Regulations sets out time limits for filing a complaint with the Tribunal. Subsection 6(1) provides that a complaint shall be filed with the Tribunal no 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. Subsection 6(2) states the following: “A potential supplier who has made an objection regarding a procurement relating to a designated contract to the relevant government institution, and is denied relief by that government institution, 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, if the objection was made within 10 working days after the day on which its basis became known or reasonably should have become known to the potential supplier.”

15. Pursuant to paragraph 10(c) of the Regulations, the Tribunal may at any time order the dismissal of a complaint where the complaint is not filed within the time limits set out in the Regulations or in any rules made pursuant to subsection 39(1) of the CITT Act.

16. According to the GIR, the supervisor of the BRU contacted L-3 on the morning of September 16, 2005, to advise L-3 that there was a problem with its bid and that portions of its bid transmitted after the bid closing date and time would have to be rejected. L-3 did not contest this account of events. On the same day, after an exchange of information on the operation of the facsimile machines used by PWGSC and the machine used for transmission of the bid by L-3, which confirmed that there had been interruptions in the sending of L-3’s faxes at the transmission end, the supervisor of the BRU completed and signed the cover letter dated September 16, 2005, and attached it to L-3’s documents which, she had advised L-3, had been submitted after the bid closing, and returned them to L-3.

17. The Tribunal believes that L-3 made an objection on September 16, 2005. Through the subsequent exchange of correspondence regarding the operation of the respective facsimile machines of PWGSC and L-3, L-3 was made aware that there was no problem at the receiving end and that its bid was therefore rejected for being “incomplete”. The Tribunal finds that L-3 knew about the basis of its complaint on September 16, 2005, when the BRU supervisor contacted it. On that same day, L-3 then objected to its bid being characterized as “incomplete” and attempted, unsuccessfully, to have that decision reversed or to have the bid that it started sending at 1:57 p.m. on September 15, 2005, substituted by another “complete” hard copy or e-mailed version. PWGSC denied L-3 relief when it sent information to L-3 that same afternoon confirming the proper functioning of its facsimile machines in the BRU. Although PWGSC did not provide this denial of relief in the form of a letter, in the Tribunal’s view, the telephone conversation followed by the exchange of documents provided L-3 with full knowledge of the denial of relief. In a recent decision,5 the Tribunal stated that “denial or relief need not be in writing”. From the moment that PWGSC denied, on September 16, 2005, relief with respect to the objection that was made by L-3 that same day, pursuant to subsection 6(2) of the Regulations, L-3 had 10 working days, i.e. until September 30, 2005, to file a complaint with the Tribunal. Yet, L-3 did not file its complaint until October 20, 2005.

18. Instead of immediately filing a complaint with the Tribunal, L-3 continued in its attempts to persuade PWGSC that its bid was not incomplete or to rectify this by sending an e-mail version after bid closing, even though it had been informed prior to bid closing that bids could not be submitted by e-mail.

19. In the Tribunal’s view, PWGSC’s letter of October 4, 2005, simply confirmed that the bid that it started to receive at 1:57 p.m. on September 15, 2005, was incomplete and that PWGSC continued to refuse to see things otherwise. This had first been communicated to L-3 on September 16, 2005. PWGSC’s letter of October 4, 2005, once again provided L-3 with the same information on the operation of the BRU facsimile machines that it had previously provided.

20. Therefore, pursuant to paragraph 10(c) of the Regulations, the complaint is dismissed.

21. Even if L-3 had not made an objection to PWGSC until October 3, 2005, by failing to file a complaint with the Tribunal or make an objection to PWGSC within the time frame provided for in subsection 6(2) of the Regulations, which in this instance would have been September 30, 2005, the complaint would not have been filed within the required time limits established by subsection 6(2).

22. The Tribunal awards PWGSC its reasonable costs incurred in responding to the complaint. In determining the amount of the cost award for this complaint case, the Tribunal considered its Guideline for Fixing Costs in Procurement Complaint Proceedings (the Guideline), which contemplates classification of the level of complexity of cases based on three criteria: the complexity of the procurement, the complexity of the complaint and the complexity of the complaint proceedings. The Tribunal’s preliminary view is that this complaint case has a complexity level corresponding to the first level of complexity referred to in Appendix A of the Guideline (Level 1). While the procurement was moderately complex, involving maintenance and support of air simulators and trainers for the Department of National Defence at various locations across Canada, the complaint itself only dealt with a minor technical matter dealing with bid receipt and, hence, was of low complexity. The complexity of the complaint proceedings was low (one intervener and no motions). Accordingly, as contemplated by the Guideline, the Tribunal’s preliminary indication of the amount of the cost award is $1,000.

ORDER OF THE TRIBUNAL

23. Pursuant to paragraph 10(c) of the Regulations, the Tribunal hereby dismisses the complaint.

24. Pursuant to section 30.16 of the CITT Act, the Tribunal awards PWGSC its reasonable costs incurred in responding to the complaint, which costs are to be paid by L-3. The Tribunal’s preliminary indication of the level of complexity for this complaint case is Level 1, and its preliminary indication of the amount of the cost award is $1,000. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Tribunal, as contemplated in its Guideline. The Tribunal retains jurisdiction to establish the final amount of the award.

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

2 . S.O.R./93-602 [Regulations].

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

4 . Exhibit 13.

5 . Re Complaint Filed by Joncas Postexperts, a Division of Quebecor World Inc., on behalf of the consortium composed of Joncas Postexperts, Enveloppe Concept Inc. and The Data Group of Companies (8 December 2005), PR-2005-028 (CITT).