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TABLE OF CONTENTS

• DETERMINATION OF THE TRIBUNAL
• STATEMENT OF REASONS
• • COMPLAINT
  • PROCUREMENT PROCESS
  • PRELIMINARY ISSUE
  • TRIBUNAL’S ANALYSIS
  • • Adélard Soucy
    • PWGSC
  • REMEDY
  • • Costs
  • TRIBUNAL’S DECISION

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IN THE MATTER OF a complaint filed by Adélard Soucy (1975) 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
ADÉLARD SOUCY (1975) INC.	Complainant
AND
THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES	Government Institution

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 subsection 30.15(4) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards Adélard Soucy (1975) inc. its reasonable costs incurred in preparing its proposal submitted in response to Solicitation No. W7701-082667/A. The Canadian International Trade Tribunal recommends that Adélard Soucy (1975) inc. and the Department of Public Works and Government Services negotiate the amount of the costs and, within 30 days of the date of this determination, report back to the Canadian International Trade Tribunal on the outcome.

Should the parties be unable to agree on the amount of the costs, Adélard Soucy (1975) inc. shall file with the Canadian International Trade Tribunal, within 40 days of the date of this determination, a submission on the issue of costs. The Department of Public Works and Government Services will then have 7 working days after receipt of Adélard Soucy (1975) inc.’s submission to file a response. Adélard Soucy (1975) inc. will then have 5 working days after receipt of the Department of Public Works and Government Services’ reply submission to file any additional comments. The parties are required to file their submissions with the Canadian International Trade Tribunal and each other simultaneously.

Pursuant to section 30.16 of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards Adélard Soucy (1975) inc. its reasonable costs incurred in preparing and proceeding with the complaint, which costs are to be paid by the Department of Public Works and Government Services. 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. Should any party disagree 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 the Guideline for Fixing Costs in Procurement Complaint Proceedings. The Canadian International Trade Tribunal retains jurisdiction to establish the final amount of the award.

Hélène Nadeau
Hélène Nadeau
Secretary

Tribunal Member:	Serge Fréchette, Presiding Member
Director:	Dominique Laporte
Senior Investigator:	Michael W. Morden
Investigator:	Josée B. Leblanc
Counsel for the Tribunal:	Eric Wildhaber
Complainant:	Adélard Soucy (1975) inc.
Counsel for the Complainant:	Sylvain Trudel
Government Institution:	Department of Public Works and Government Services
Counsel for the Government Institution:	Susan D. Clarke
	Ian McLeod
	Karina Fauteux
	Alex Kaufman

Please address all communications to:

COMPLAINT

1. On March 26, 2009, Adélard Soucy (1975) inc. (Adélard Soucy) 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 concerned the procurement (Solicitation No. W7701-082667/A) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of National Defence for the provision of assembly, welding and fabrication services for heavy mechanical parts.

2. Adélard Soucy alleges that the procurement was not conducted in accordance with Chapter Five of the Agreement on Internal Trade ² since, according to Adélard Soucy, PWGSC improperly disqualified its proposal on erroneous grounds.

3. As a remedy, Adélard Soucy is requesting that it be awarded a contract in accordance with its proposal.³ In the alternative, it is asking that it be compensated for lost profits in being deprived of the contract and awarded its costs relating to the complaint and the preparation of its proposal. It is also requesting that the Tribunal order PWGSC to postpone the award of any contract until the Tribunal determines the validity of the complaint.⁴

4. On April 3, 2009, the Tribunal informed the parties that it was accepting the complaint, as it met the requirements of subsection 30.13(1) of the CITT Act and the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations.⁵ On that same date, under subsection 30.13(3), the Tribunal ordered PWGSC to postpone the award of a contract until it determined the validity of the complaint. On April 27, 2009, PWGSC informed the Tribunal of its intention to cancel the standing offer process and asked the Tribunal to terminate its inquiry. On May 1, 2009, Adélard Soucy maintained that it disagreed with PWGSC’s intention to cancel the standing offer process because that decision would be prejudicial. On May 21, 2009, the Tribunal asked the parties to make written submissions indicating the reasons why the Tribunal should cease or continue with its inquiry into this complaint. On May 25, 2009, the Tribunal asked PWGSC to file the Government Institution Report (GIR) not later than June 5, 2009. On May 28, 2009, the parties filed their written submissions in response to the Tribunal’s letter of May 21, 2009. On June 3, 2009, Adélard Soucy filed its submissions in response to PWGSC’s written submissions. On June 5, 2009, PWGSC filed the GIR. On June 17, 2009, Adélard Soucy informed the Tribunal that all of its submissions were already contained in its complaint and that it did not need to make many comments.

5. 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 written information on the record.

PROCUREMENT PROCESS

6. On February 6, 2009, PWGSC issued a Request for a Standing Offer (RFSO) on MERX⁶ with a closing date of February 23, 2009. According to PWGSC,⁷ six proposals had been received in response to the RFSO. Of those, four proposals were retained whereas two proposals were rejected, including the one from Adélard Soucy, for not meeting one of the mandatory criteria in the RFSO. Again according to PWGSC, following evaluation of the proposals, and in accordance with the terms and conditions of the RFSO, two standing offers were awarded.

7. Between February 24 and March 12, 2009, Adélard Soucy and PWGSC had a few telephone discussions about Adélard Soucy’s proposal. On March 16, 2009, PWGSC sent an e-mail to Adélard Soucy to clarify one point about its proposal and, at the same time, informed it that its proposal was being reviewed by its legal services. On March 17, 2009, PWGSC informed Adélard Soucy, by letter, that its proposal had been rejected.

8. On March 26, 2009, Adélard Soucy filed its complaint with the Tribunal.

9. On May 7, 2009, PWGSC informed the Tribunal that it had cancelled the standing offer process, that a new process would be initiated soon, but that, in the meantime, to meet certain urgent needs and to address its operational requirements, its client was contemplating entering into an interim short-term contract valued at less than $25,000 with a supplier other than those that were holders of the standing offers covered by the cancelled process.

10. PWGSC added that the new procedure would thus allow all companies to bid based on a more specific criterion.

PRELIMINARY ISSUE

11. PWGSC submits that, since there no longer is a procurement process before the Tribunal, the complaint becomes moot and that the Tribunal therefore no longer has jurisdiction to continue its inquiry and should dismiss the complaint, with costs. In its letter of April 27, 2009, addressed to the Tribunal, PWGSC refers to TPG Technology Consulting Ltd. ⁸ and to subsection 30.13(5) of the CITT Act, which allows the Tribunal to cease an inquiry at any time if it is of the opinion that the complaint is trivial.

12. PWGSC submits that, in accordance with Part 2 of the RFSO, the 2006 standard instructions (2008-12-12) were incorporated by reference and that Canada “. . . reserves the right to . . . cancel the RFSO at any time . . . .”⁹

13. Adélard Soucy submits that it disagrees with PWGSC’s request and that any references made by PWGSC to previous Tribunal decisions have no relevance in this case.¹⁰ Adélard Soucy submits that it is objectionable that PWGSC did not provide justification regarding the use of its discretion. Adélard Soucy considers that, in the absence of a minimum explanation to the contrary by PWGSC, its decision to cancel the process must necessarily be interpreted by the Tribunal as being prima facie an admission that its complaint is valid. Adélard Soucy is requesting that, if the Tribunal decides to continue its inquiry, its postponement of award of contract order remain in effect. Adélard Soucy is also requesting, if it wins its case, that the Tribunal order a re-evaluation of its proposal, that it recommend that it be awarded the contract and that it be awarded compensation for lost profits.¹¹

14. The preliminary issue raised is whether the Tribunal has jurisdiction to continue its inquiry despite the fact that PWGSC ended the tendering process in question.

15. Subsection 30.11(1) of the CITT Act reads as follows:

Subject to the regulations, a potential supplier may file a complaint with the Tribunal concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint.

16. Section 30.1 of the CITT Act defines the expression “designated contract” as a “contract for the supply of goods or services that has been or is proposed to be awarded by a government institution and that is designated or of a class of contracts designated by the regulations”.

17. Subsection 30.13(1) of the CITT Act provides inter alia that, “[s]ubject to the regulations, after the Tribunal determines that a complaint complies with subsection 30.11(2), it shall decide whether to conduct an inquiry into the complaint . . . .”

18. Subsection 7(1) of the Regulations sets out three conditions that must be met before the Tribunal can conduct an inquiry in respect of a complaint. One of these conditions provides that the complaint must be in respect of a designated contract. A “designated contract” includes inter alia any contract or class of contract concerning a procurement of goods or services, as described in Article 1001 of the North American Free Trade Agreement,¹² Article 502 of the AIT or Article I of the Agreement on Government Procurement,¹³ that has been or is proposed to be awarded by a government institution.

19. These provisions essentially establish the Tribunal’s jurisdiction from the moment the complaint is filed to the time the inquiry is initiated.

20. Pursuant to section 30.13 of the CITT Act, the Tribunal decided to initiate an inquiry based on the reasons alleged in the complaint filed by Adélard Soucy. Therefore, the Tribunal found, under section 30.11 of the CITT Act, that there was “. . . a complaint . . . concerning any aspect of the procurement process that relates to a designated contract . . . .” In reaching this conclusion, the Tribunal noted that each of the conditions set out in subsection 7(1) of the Regulations was met, namely, that the complainant was a potential supplier, that the complaint was in respect of a designated contract and that the information relating to the complaint disclosed a reasonable indication that the procurement had not been carried out in accordance with the applicable trade agreements.

21. The Tribunal initiated the inquiry insofar as it was satisfied that the conditions set out in subsection 7(1) of the Regulations were met and insofar as it was convinced that it was justified in inquiring into the validity of the complaint in light of the allegations and evidence at its disposal.

22. The grounds for initiating the inquiry remain intact despite the cancellation of the tendering process. That cancellation in no way changes the Tribunal’s initial findings regarding the existence of the grounds of complaint for which the inquiry was initiated, namely, the existence of reasonable grounds that the procurement was not conducted in accordance with the provisions of the applicable trade agreements. As such, cancelling the tendering process in no way changes the existence of the reasons for which the inquiry was initiated and, as such, the complaint is not trivial, as claimed by PWGSC.

23. Contrary to PWGSC’s claims, there is nothing in the CITT Act or its regulations that stipulates that the inquiry must necessarily cease due to the interruption of the procurement process once the inquiry has begun. PWGSC bases its argument on section 30.11 of the CITT Act and the definition of “designated contract”, supported by the decisions of the Federal Court of Appeal in Novell Canada Ltd. v. Canada (Minister of Public Works and Government Services) ¹⁴ and by certain previous decisions of the Tribunal including, in particular, Cisco Systems Canada Co. ¹⁵

24. As to the wording of the provisions, section 30.11 of the CITT Act states that the complaint filed must be in respect of “. . . the procurement process that relates to a designated contract . . . .” Regarding the definition of “designated contract”, it refers to a contract “. . . that has been or is proposed to be awarded . . .” by a government institution. These provisions set the parameters within which a complaint can be considered by the Tribunal for determining whether to initiate an inquiry. The Tribunal is of the view that it is clear from the wording of section 30.11 that the existence of a contract that “. . . has been or is proposed to be awarded . . .” is a precondition that applies only when the complaint is filed. The provision does not specify that this situation must necessarily continue at any time during the inquiry.

25. This precondition was met since the Tribunal initiated an inquiry. As long as the grounds of complaint remain relevant, the purpose of the inquiry, which is to determine whether the procurement process was performed or carried out in accordance with the relevant provisions of the trade agreements that are applicable in this case, cannot be questioned. Discontinuing the process does not change this fundamental issue. Even if the procurement process was interrupted, it remains to be determined whether it was performed or carried out in accordance with the trade agreements. This inquiry will determine, if applicable, the content of the Tribunal’s recommendations.

26. Regarding the decisions cited by PWGSC to support its claims, it is important to briefly recall the facts at issue in each one:

27. The Tribunal is of the view that it is important to point out that, in most of the above-mentioned cases, the government institution elected to discontinue the tendering process before the contract was awarded. The Tribunal also wishes to point out that, in most of the cases, this actually corresponded with the remedy requested by the complainant and that the complainant did not object. That is not the case here.

28. Although the Tribunal has the jurisdiction to cease an inquiry if it deems appropriate, once the Tribunal has the jurisdiction required to initiate an inquiry pursuant to subsection 30.11(1) of the CITT Act, it is under no obligation to cease it, regardless of whether the procurement process is cancelled during the inquiry. As stated above, nothing in the CITT Act or its regulations suggest that Parliament contemplated that a decision by the government department to cancel a procurement process could terminate the Tribunal’s jurisdiction to continue an inquiry that was begun in accordance with the law. In this connection, the Tribunal notes that PWGSC cited Novell to support its claims. In Novell, Rothstein J. stated the following at paragraph 5 of his decision:

[5] There is now no designated contract at issue. The contract was for a Y2K requirement and the software licences acquired have been disposed of. While subsection 30.11(1) is broad enough to confer on the Tribunal jurisdiction to consider any aspect of a procurement process that relates to a designated contract, there must be a designated contract in order to trigger the broader inquiry. As there is now no designated contract at issue, the Tribunal is without jurisdiction to enter into any procurement process inquiry. In other words, there is no jurisdiction in the Tribunal under subsection 30.11(1) to conduct an at-large inquiry into the procurement processes of the government.

[Emphasis added]

29. In Novell, the issue was whether the Tribunal still had jurisdiction to initiate an inquiry in the absence of a designated contract. The comments of the Federal Court of Appeal were made in a context where the government department had cancelled a process once the Tribunal had completed its inquiry and had found the complaint to be valid.

30. In judicial review, the applicant asked the Federal Court of Appeal to refer back the Tribunal’s decision not to conduct inquiries into claims of “. . . contract splitting . . .” when there was no longer a “designated contract” when that request was made before the Court, and when there was no longer any need or necessity on the part of PWGSC for the services being procured. It was in this specific context that the Federal Court of Appeal rightly stated that there is no jurisdiction in the Tribunal under subsection 30.11(1) of the CITT Act to conduct an at-large inquiry into the government’s procurement processes in the absence of a designated contract.

31. It is important to point out that Novell differs from the present case in that, when it decided to conduct an inquiry into the complaint, there was indeed a “designated contract” for which there was a complaint legitimately before the Tribunal. Moreover, contrary to the facts in Novell, PWGSC still requires the services that were the subject of the standing offer process and also clearly indicated its intention to return to tendering for those same services.

32. For these reasons, the Tribunal considers that, in light of the circumstances of this case, the Tribunal has jurisdiction to continue its inquiry despite the fact that PWGSC terminated the standing offer process in question.

TRIBUNAL’S ANALYSIS

33. 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 case is the AIT.

34. Subsection 506(6) of the AIT provides inter alia that the “. . . tender documents shall clearly identify the requirements of the procurement, the criteria that will be used in the evaluation of bids and the methods of weighting and evaluating the criteria.”

35. Therefore, it is a matter of determining whether PWGSC evaluated the bids in accordance with the evaluation criteria set out in the RFSO.

36. In Section II of Part 3 of the RFSO, the following sentence is written:

Offerers must submit their financial offers in accordance with Annex A, Basis of Payment. . . . 

[Translation]

37. Part 4 of the RFSO sets out the evaluation procedures and selection method to be used for selecting the winning proposals. Article 2.1 provides the following:¹⁶

An offer must comply with the requirements of the Request for a Standing Offer to be declared responsive. The responsive offer with the lowest evaluated price will be recommended for issuance of a standing offer. [A]fter meeting the criteria and after a verification of the workshop by the staff of [Defence Research and Development Canada (DRDC)] Valcartier, the two lowest proposals will be considered.

[Translation]

38. Article 3 of Annex A to the RFSO states the following:

ANNEX “A”

Statement of Work and Basis of Payment

. . .

SERVICE SPECIFICATION/BASIS OF PAYMENT

The hourly rate, per-pound rate or flat rate shall apply to direct or productive labour, established separately for each operation including all federal taxes. . . .

Rates shall be evaluated based on the percentage of use of the various tasks specified later in this document.

. . .

3. Service of a heat-treating furnace with a load capacity for parts that may be 20 feet long, 4 feet wide and 6 feet high.

Per-pound rate $_______________(2009-2011)

Per-pound rate $_______________(2011-2013)

SEE NOTE 1

. . .

NOTE 1: The services required as per items 3, 7 and 8 may be subcontracted under the supplier’s responsibility at the hourly rates established in this contract.

. . .

PERCENTAGE OF USE¹⁷

[Translation]

Adélard Soucy

39. Adélard Soucy alleges that PWGSC improperly rejected its proposal on erroneous grounds. Adélard Soucy submits that item 3 of Annex “A” to the RFSO requested a per-pound rate. Adélard Soucy maintains that there was no ambiguity in item 3 of Annexe “A” regarding the heat treatments to be provided because, as and when required, DRDC Valcartier could very easily, depending on the type of part, the alloy used and its weight, know in advance the per-pound price of the heat treatment, depending on its nature. According to Adélard Soucy, it had written “variable” at item 3 of Annex “A” in its technical proposal because there was nothing in the RFSO preventing it from providing a variable price at item 3 depending on the weight and type of heat treatment required. According to Adélard Soucy, its prices were easily understood and available, as indicated in Annex 1 to its proposal. Annex 1 included a detailed list of variable prices depending on the weight and type of heat treatment required, the description of possible heat treatments depending on the materials and alloys and a brief presentation of the time frames required for the treatment and of the subcontractor’s designated contacts.

40. Adélard Soucy maintains that, because item 3 of Annex “A” to the RFSO allowed using the services of a subcontractor, it became obvious that the subcontractor was the first reference in determining the fairest and most advantageous price. Adélard Soucy maintains that PWGSC’s argument that Adélard Soucy’s proposal was unfair to the other bidders because they would not have given a variable rate does not take into account the essentially variable nature of the heat treatments.

41. Adélard Soucy contends that the reference “SEE NOTE 1”¹⁸ at item 3 also appears at items 7 and 8 of Annex “A” to the RFSO. The note reads as follows:

NOTE 1: The services required as per items 3, 7 and 8 may be subcontracted under the supplier’s responsibility at the hourly rates established in this contract.

[Emphasis added]

According to Adélard Soucy, “the hourly rates” to which Note 1 refers apply only to items 7 and 8; item 3 can only be a per-pound rate, as per both the specification in the RFSO and the type of work involved, namely, heat treatment. According to Adélard Soucy, there is nothing in item 3 of the RFSO preventing it from providing a variable price depending on the weight and type of heat treatment required.

PWGSC

42. PWGSC contends that the Tribunal should dismiss Adélard Soucy’s complaint because, according to the information that it presented at item 3 of Annex “A” of its proposal regarding the services pertaining to the heat treatments, it was providing a variable price, which was contrary to the requirements of the RFSO, which asked for a firm price. PWGSC submits that, for this reason, it was unable to proceed with the overall financial evaluation of Adélard Soucy’s proposal. PWGSC contends that, if Adélard Soucy had questions about item 3, it should have requested information from PWGSC at least four calendar days before the closing date of the RFSO, as stipulated in Article 3 of Part 2 of the RFSO.¹⁹ According to PWGSC, the price list attached to Annex 1 of Adélard Soucy’s proposal included various rates that varied depending on the weight and type of treatment. PWGSC considers that it was not up to it to determine, from among all those possible rates, which one should apply, particularly since that was not fair to the other bidders that had provided a fixed per-pound price.

43. PWGSC submits that Note 1 of Annex “A” to the RFSO allowed bidders to subcontract items 3, 7 and 8. According to PWGSC, based on the above-mentioned Note 1, Adélard Soucy could subcontract the heat treatment services mentioned in item 3, provided that it offered a firm price for those services.

44. Therefore, PWGSC contends that it was unable to compare Adélard Soucy’s overall financial offer with the other offers received in order to determine which offers were the lowest. According to PWGSC, it was therefore justified in finding Adélard Soucy’s proposal non-compliant with the requirements of the RFSO.

45. The Tribunal examined the issue of whether Adélard Soucy’s proposal, which incorporated a variable price depending on the weight and type of heat treatment required, was contrary to the criteria of the RFSO requiring a “per-pound rate”. In this regard, it is clear to the Tribunal that, even though Adélard Soucy had not provided exactly what PWGSC was expecting in response to the RFSO, Adélard Soucy’s proposal had been submitted in accordance with the mandatory criteria of the RFSO.

46. In fact, the Tribunal is of the view that, in choosing to bid in this way, Adélard Soucy did not breach the provisions of the RFSO since, by providing a detailed price grid that varied based on the weight and type of heat treatment required, it clearly met the requirement of providing a “per-pound rate”. The Tribunal notes that nowhere does the RFSO mention that bidders cannot submit variable per-pound prices. PWGSC is now attempting to argue that, in the RFSO, a document that it drafted, a firm price was mandatory, i.e. a fixed price that does not vary depending on weight or type of heat treatment. In the absence of a clear provision in this regard, the Tribunal cannot accept this argument.

47. As to PWGSC’s argument that it was impossible to evaluate Adélard Soucy’s proposal, the Tribunal is of the view that the difficulties encountered in the evaluation simply arise from the lack of clarity in the provisions of the RFSO and that Adélard Soucy should not pay the price. Lastly, the argument that taking Adélard Soucy’s position would result in a lack of fairness to the other bidders does not convince the Tribunal either, since Adélard Soucy met the provisions of the RFSO, although its proposal had been submitted in a different format than that used in the proposals of the other bidders.

48. Therefore, the Tribunal finds that PWGSC breached subsection 506(6) of the AIT by not evaluating Adélard Soucy’s bid in accordance with the evaluation criteria in the RFSO.

49. In light of the foregoing, the Tribunal determines that Adélard Soucy’s complaint is valid.

REMEDY

50. Having found the complaint to be valid, the Tribunal must now recommend an appropriate remedy to compensate Adélard Soucy for the prejudice that it suffered.

51. In recommending a remedy, the Tribunal is governed by subsections 30.15(2), (3) and (4) of the CITT Act, which stipulate as follows:

(2) Subject to the regulations, where the Tribunal determines that a complaint is valid, it may recommend such remedy as it considers appropriate, including any one or more of the following remedies:

(a) that a new solicitation for the designated contract be issued;

(b) that the bids be re-evaluated;

(c) that the designated contract be terminated;

(d) that the designated contract be awarded to the complainant; or

(e) that the complainant be compensated by an amount specified by the Tribunal.

(3) The Tribunal shall, in recommending an appropriate remedy under subsection (2), consider all the circumstances relevant to the procurement of the goods or services to which the designated contract relates, including

(a) the seriousness of any deficiency in the procurement process found by the Tribunal;

(b) the degree to which the complainant and all other interested parties were prejudiced;

(c) the degree to which the integrity and efficiency of the competitive procurement system was prejudiced;

(d) whether the parties acted in good faith; and

(e) the extent to which the contract was performed.

(4) Subject to the regulations, the Tribunal may award to the complainant the reasonable costs incurred by the complainant in preparing a response to the solicitation for the designated contract.

52. The Tribunal considers that using criteria not indicated in the RFSO is a deficiency that cannot be overlooked and that Adélard Soucy was significantly prejudiced. Despite the fact that it would have been desirable for PWGSC to have clearly indicated the reasons leading it to discontinue the process, when it admits still needing the services for which it had originally initiated it, there is nothing in the evidence regarding the ground of complaint examined by the Tribunal to indicate that PWGSC acted in bad faith. It is clear that Adélard Soucy’s proposal was not evaluated in accordance with the RFSO. If Adélard Soucy had known the criteria that were to be applied, it would presumably have structured its bid differently or decided not to bid at all.

53. In choosing the appropriate remedy, the Tribunal considers the fact that circumstances and the evidence are insufficient to determine, assuming that its proposal was properly evaluated, whether Adélard Soucy would have been issued either of the two standing offers. In view of this uncertainty, the Tribunal is therefore of the view that cancelling the standing offer and issuing a new solicitation would normally have been the appropriate remedy. However, the Tribunal takes into account that PWGSC already cancelled the standing offer process and indicated that it would conduct a new solicitation for the same services. The Tribunal notes that Adélard Soucy will have the opportunity to bid again and, therefore, that it is not necessary to recommend a remedy. The Tribunal is also of the view that there are no valid reasons justifying compensation for lost profits, given that PWGSC had the right to cancel the RFSO at any time and that no orders had been placed under it. However, as indicated below, the Tribunal deems it appropriate to award Adélard Soucy its reasonable costs incurred in preparing its proposal submitted in response to Solicitation No. W7701-082667/A, in accordance with subsection 30.15(4) of the CITT Act. The parties are invited to use the Tribunal’s Procurement Cost Guidelines (November 1999) in formulating their respective submissions.

Costs

54. Pursuant to section 30.16 of the CITT Act, the Tribunal awards Adélard Soucy its reasonable costs incurred in preparing and proceeding with the complaint.

55. The Guideline for Fixing Costs in Procurement Complaint Proceedings (the Guideline) contemplates classification of the level of complexity of complaint cases based on three criteria: the complexity of the procurement, the complexity of the complaint and the complexity of the complaint proceedings. According to the Tribunal’s preliminary indication, the level of complexity of the complaint is Level 1. The complexity of the procurement was medium, as it was for a defined service project for construction services. The complexity of the complaint was low, in that the ground of complaint involved a single criterion. The complexity of the complaint proceedings was low, as there were no interveners, a public hearing was not required and the 90-day time frame was respected. Accordingly, as contemplated by the Guideline, the Tribunal’s preliminary indication of the amount of the cost award is $1,000.

TRIBUNAL’S DECISION

56. Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is valid.

57. Pursuant to subsection 30.15(4) of the CITT Act, the Tribunal awards Adélard Soucy its reasonable costs incurred in preparing its proposal submitted in response to Solicitation No. W7701-082667/A. The Tribunal recommends that Adélard Soucy and PWGSC negotiate the amount of the costs and, within 30 days of the date of this determination, report back to the Tribunal on the outcome.

58. Should the parties be unable to agree on the amount of the costs, Adélard Soucy shall file with the Tribunal, within 40 days of the date of this determination, a submission on the issue of costs. PWGSC will then have 7 working days after receipt of Adélard Soucy’s submission to file a response. Adélard Soucy will then have 5 working days after receipt of PWGSC’s reply submission to file any additional comments. The parties are required to file their submissions with the Tribunal and each other simultaneously.

59. Pursuant to section 30.16 of the CITT Act, the Tribunal awards Adélard Soucy its reasonable costs incurred in preparing and proceeding with the complaint, which costs are to be paid by TPSGC. 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. Should any party disagree 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 the Guideline. The Tribunal retains jurisdiction to establish the final amount of the award.

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

² . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/index_en/ait.htm> [AIT].

³ . In this case, PWGSC did not award a contract because the solicitation concerned the issuing of standing offers. According to Chapter 12 of PWGSC’s Supply Manual, the definition of the term “standing offer” is as follows: “A Standing Offer is not a contract. It is an offer from a supplier to provide goods and/or services to clients at prearranged prices or pricing basis and under set terms and conditions for a specified period on an as-and-when requested basis. A separate contract is entered into each time a call-up is made against a Standing Offer. When a call-up is made, the terms and conditions are already in place and acceptance by Canada of the supplier’s offer is unconditional. Canada’s liability shall be limited to the actual value of the call-ups made within the period specified in the Standing Offer. (2002-12-13)”.

⁴ . In cases where a standing offer has been issued, the Tribunal’s postponement of award order postpones the raising of any call-ups against that standing offer until the Tribunal determines the validity of the complaint.

⁵ . S.O.R./93-602 [Regulations].

⁶ . Canada’s electronic tendering service.

⁷ . GIR at 3.

⁸ . Re Complaint Filed by TPG Technology Consulting Ltd. (20 August 2007), PR-2007-020 (CITT).

⁹ . <http://sacc.pwgsc.gc.ca/sacc/query.do?lang=en&id=2006&date=2008/12/12&ei..., clause 10.

¹⁰ . Letters from PWGSC dated April 27 and May 28, 2009.

¹¹ . Letters from Adélard Soucy dated May 1 and 28, 2009.

¹² . North American Free Trade Agreement between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America, 17 December 1992, 1994 Can. T.S. No. 2 (entered into force 1 January 1994).

¹³ . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm>.

¹⁴ . 2000 CanLII 15324 (F.C.A.) [Novell].

¹⁵ . Re Complaint Filed by Cisco Systems Canada Co. (3 July 2008), PR-2008-012 (CITT) [Cisco].

¹⁶ . RFSO at 7, 8.

¹⁷ . RFSO at 23.

¹⁸ . RFSO at 21.

¹⁹ . Complaint, exhibit 4.