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TABLE OF CONTENTS

• DECISION
• STATEMENT OF REASONS
• • DECISION

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

BY

VITALAIRE CANADA INC.

AGAINST

THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVCIES

Pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal has decided not to conduct an inquiry into the complaint.

Hélène Nadeau
Hélène Nadeau
Secretary

1. Subsection 30.11(1) of the Canadian International Trade Tribunal Act ¹ provides that, subject to the Canadian International Trade Tribunal Procurement Inquiry Regulations,² a potential supplier may file a complaint with the Canadian International Trade Tribunal (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. Subsection 30.13(1) of the CITT Act provides that, subject to the Regulations, after the Tribunal determines that a complaint complies with subsection 30.11(2) of the CITT Act, it shall decide whether to conduct an inquiry into the complaint.

2. The complaint relates to a procurement (Solicitation No. 6D024-090531/A) by the Department of Public Works and Government Services (PWGSC) on behalf of the Public Health Agency of Canada (PHAC) for the provision of portable ventilators and accessories.

3. VitalAire Canada Inc. (VitalAire) alleged the following:

4. On July 8, 2009, PWGSC issued a Request for Proposal (RFP) for the provision of portable ventilators and accessories. The original bid closing date was July 23, 2009. However, as a result of amendments to the RFP, the bid closing date was changed to August 4, 2009.

5. On July 28, 2009, VitalAire submitted a bid in response to the RFP. On August 14, 2009, PWGSC requested clarification from VitalAire regarding its proposal as it related to mandatory criteria 9.0 and 25.0 of Annex B to the RFP. On August 18, 2009, VitalAire responded to PWGSC’s request. On August 19, 2009, PWGSC requested another clarification from VitalAire. Later that day, VitalAire provided its response.

6. On August 26, 2009, PWGSC advised VitalAire that a contract had been awarded to another supplier and that VitalAire’s proposal had been found non-responsive in respect of mandatory criterion 25.0.

7. According to the complaint, on August 27, 2009, VitalAire had a telephone conversation with a PWGSC representative who was not part of the technical evaluation team. In an internal e-mail, VitalAire alleged that, during this conversation, the representative informed it that its proposal had actually been found non-responsive in respect of mandatory criterion 2.0. According to VitalAire, the call ended with an agreement whereby PWGSC’s representative would ask for clarifications from PHAC’s technical authorities on the technical evaluation and that PWGSC would not cancel the RFP.

8. Subsequent to that discussion, VitalAire sent an e-mail to PWGSC’s representative indicating its concern that there was clearly some uncertainty regarding the procurement process and asked why, given the circumstances, the RFP could not be cancelled and reissued. On August 28, 2009, PWGSC’s representative responded by saying that, once a contract is awarded, it is past the stage where the RFP can be cancelled. PWGSC’s representative added that he was having difficulty getting PHAC’s technical authorities together to discuss the evaluations. On September 3, 2009, VitalAire filed its complaint with the Tribunal.

9. On September 3, 2009, following a discussion with PHAC’s technical authorities, PWGSC’s representative sent an e-mail to VitalAire indicating that its proposal was not compliant in respect of mandatory criterion 2.0 and added that this criterion clearly states that “. . . the system must run on internal battery ONLY for a minimum of 8 hours when being applied to a patient at standard settings.”³

10. On September 4, 2009, VitalAire filed a supplementary complaint with the Tribunal, in which it included this correspondence, as well as comments in respect thereof. It also amended its grounds of complaint by adding the fifth ground mentioned above.

11. Subsection 6(1) of the Regulations provides that a complaint shall be filed with the Tribunal “. . . 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.” Subsection 6(2) provides that a potential supplier that has made an objection 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.”

12. These provisions make it clear that a complainant has 10 working days from the date on which it first becomes aware, or reasonably should have become aware, of its ground of complaint to either object to the government institution or file a complaint with the Tribunal.

13. VitalAire’s fourth ground of complaint was that the technical specifications of the RFP were biased in favour of the incumbent supplier’s portable ventilator. According to VitalAire, PWGSC relied on the incumbent supplier’s specifications to describe the requirements under mandatory criteria 9.0, 10.0, 12.0, 16.0, 22.0 and 28.0. Under these circumstances, the Tribunal considers that VitalAire knew or reasonably should have known the basis of its complaint once it reviewed the solicitation documents or, at the latest, on July 28, 2009, when it submitted its proposal in response to the RFP. Therefore, in order to meet the requirements of subsections 6(1) and (2) of the Regulations, VitalAire would have had to file its complaint with the Tribunal, or make an objection to PWGSC, not later than August 12, 2009 (i.e. 10 working days from July 28, 2009). As VitalAire only filed its complaint with the Tribunal on September 3, 2009, and in the absence of any evidence indicating that an objection was made to PWGSC on or before August 12, 2009, the Tribunal considers that the complaint on this ground has not been filed in a timely manner.

14. Paragraph 7(1)(c) of the Regulations requires that the Tribunal determine whether the information provided by the complainant discloses a reasonable indication that the procurement has not been conducted in accordance with whichever of Chapter Ten of the North American Free Trade Agreement,⁴ Chapter Five of the Agreement on Internal Trade,⁵ the Agreement on Government Procurement ⁶ or Chapter Kbis of the Canada-Chile Free Trade Agreement ⁷ applies. In this case, all four trade agreements apply.

15. VitalAire’s first ground of complaint was that PWGSC improperly declared its proposal non-compliant. More specifically, it submitted that PWGSC improperly determined that its proposed portable ventilator failed to comply with mandatory criterion 2.0 or 25.0.

16. On August 26, 2009, PWGSC rejected VitalAire’s proposal and found that it was non-compliant in respect of mandatory criterion 25.0. In subsequent correspondence in the context of a follow-up of arguments raised by VitalAire on the technical evaluation relating to mandatory criterion 2.0, PWGSC indicated that the proposal was not compliant with this criterion. However, PWGSC did not comment further on the non-compliance with mandatory criterion 25.0.

17. Mandatory criteria 2.0 and 25.0 read as follows:

MANDATORY SPECIFICATIONS FOR PORTABLE VENTILATOR

2.0 When the internal battery is new and fully charged, the portable ventilator must operate independently from any external power source (AC or DC) when still maintaining accurate ventilatory support, volume and pressure monitoring and volume and pressure alarms for a minimum eight (8) hours at standard ventilation settings;

Met: Yes __________ No __________

Reference in [Contractor’s] Proposal: __________________________

. . . 

25.0 The portable ventilator’s internal backup battery power/min must be up to 600 mn (10 hrs);

Met: Yes __________ No __________

Reference in [Contractor’s] Proposal: __________________________

18. In its clarification request of August 14, 2009, with respect to mandatory criterion 25.0, PWGSC stated as follows: “We require clarification whether unit’s internal backup battery power is up to 10 hours. We request documentation.”⁸

19. In its response of August 18, 2009, VitalAire stated as follows:

To answer your questions, we will refer to the “Pandemic Ventilator Solution/LTV 1200” unit which we included with our submission, as well as to the Operators Manual of the unit (also included with our submission).

. . .

There is an easy way to verify that our LTV1200 pandemic solution offers a significantly longer time than 10 hours. Once the unit is in Stand By/Off mode (and fully charged), turning it back again 10hrs later that will prove that the internal back-up power supply is operational for a minimal of 10 hours. (We expect the internal backup power supply to last significantly longer than the requested 10 hours).⁹

20. In its subsequent request for clarification of August 19, 2009, PWGSC asked the following: “With the unit in clinical use at the following settings: tidal volume 500, rate 12, peep 5cm H2O. How long will your unit run on the battery?”¹⁰ In its response submitted the same day, VitalAire stated the following: “At the settings you indicate our unit will run approximately 6 hours on battery in clinical use. . . . Please note, that in our answer to Question 2.0 of the RFP we have used different settings, which settings resulted in run times over 8 hours.”¹¹ It also asked that PWGSC confirm that all other bidders were being requested the exact same specifications. The same day, PWGSC confirmed that this was the case.

21. On August 26, 2009, PWGSC advised VitalAire that its proposal had been found non-responsive in respect of mandatory criterion 25.0. Further to discussions between VitalAire and PWGSC’s representative, PWGSC confirmed, on September 3, 2009, that, since VitalAire’s ventilator could only function for six hours at the standard settings provided by PWGSC on August 19, 2009, it was definitively non-compliant in respect of mandatory criterion 2.0.¹²

22. In its supplementary complaint, VitalAire submitted that PWGSC’s correspondence of September 3, 2009, clearly establishes that its proposal had been rejected on the basis of alleged non-compliance with mandatory criterion 2.0 and that, therefore, its proposal met all the other mandatory criteria, including mandatory criterion 25.0. In VitalAire’s view, had its proposal been evaluated in accordance with mandatory criterion 2.0 as published in the RFP and available to bidders prior to bid closing, it would have been declared compliant.

23. The Tribunal disagrees with VitalAire’s contentions noted above. The Tribunal is of the view that the complaint fails to disclose how VitalAire’s proposal, as originally submitted, was compliant with all the mandatory criteria published in the RFP, and more specifically with mandatory criteria 2.0 and 25.0.

24. The RFP makes it clear that the onus is on the bidder to provide all the information necessary to ensure a complete and accurate assessment of its proposal and that technical brochures or technical data must be provided to verify compliance with the mandatory technical specifications. In addition, the RFP has provisions allowing the government institution to declare the proposal non-responsive if the information requirements are not addressed.

25. Part 4 of the RFP, which is entitled “EVALUATION PROCEDURES AND BASIS OF SELECTION”, states the following:

1.1 Technical Evaluation

All proposals submitted shall be completed in full and provide all of the information requested in the Request for Proposal (RFP) package to enable a full and complete evaluation. If the requirement is not addressed in the bidder’s proposal, the proposal will be considered incomplete or non-responsive and will be rejected. The onus is on the bidder to provide all the information necessary to ensure a complete and accurate assessment.

. . . 

Factors for Evaluation

. . . 

2. ABILITY TO MEET THE TECHNICAL REQUIREMENT (MANDATORY):

. . . 

b) Provision of Supporting Technical Documentation:

Supporting technical documentation . . . shall be provided with the bid at time of bid closing. Technical brochures or technical data MUST be provided to verify compliancy to the technical mandatory specifications.

26. In addition, Part 1 of the RFP, which is entitled “GENERAL INFORMATION”, provides as follows:

Use of the word “SHALL” and “MUST”: When the words “shall” and “must” are used in this document, it indicates an action or requirement that is mandatory. If the requirement is not addressed in the bidder’s proposal, the proposal will be considered incomplete or non-compliant and will be rejected. Proposals will be judged solely on the information contained therein and the onus is on the bidder to provide all the information necessary for a complete and accurate assessment.

27. Therefore, the RFP stated, in no uncertain terms, that supporting technical documentation had to be provided in order to verify compliance with the technical requirements. In its proposal, VitalAire stated that it met mandatory criterion 25.0, as the internal battery provided “. . . data storage supply for a time period well over 10 hours.”¹³ It also made reference to the “Operator’s Manual – Chapter Power and Battery Options and Sprint Pack manual”.¹⁴ Moreover, in its response of August 18, 2009, to PWGSC’s clarification request of August 14, 2009, regarding mandatory criterion 25.0, VitalAire explained that PWGSC could verify that its ventilator has internal back-up battery power of at least 10 hours by leaving the unit in “Stand By/Off mode (and fully charged)” and turning it back on again 10 hours later. Despite these claims, the Tribunal could not find any technical documentation in the proposal that indicated, as claimed by VitalAire, that its portable ventilator had an internal back-up battery power of at least 10 hours.

28. With respect to mandatory criterion 2.0, VitalAire’s proposal stated as follows: “Recent testing by the manufacturer resulted in run times exceeding 8 hours with standard settings, using the dual internal battery pack configuration.”¹⁵ No reference to supporting technical documentation was provided. Despite a careful review, the Tribunal was unable to find any such information. In fact, the only relevant technical documentation included in VitalAire’s proposal appeared to indicate that its portable ventilator would operate for only one hour with the standard internal battery and up to an additional five or six hours with a dual battery transport pack.¹⁶ Thus, VitalAire’s proposed portable ventilator would not appear to meet this mandatory criterion.

29. In its e-mail of September 3, 2009, PWGSC indicated to VitalAire that mandatory criterion 2.0 referred to the internal battery only. The Tribunal offers the following observation relative to the meaning of the requirement in mandatory criterion 2.0. In response to mandatory criterion 1.0, which limited the weight of the portable ventilator to 16 lbs., including the internal battery, VitalAire appears to have indicated only the weight of its portable ventilator (14.5 lbs.) and not the weight of the dual battery pack (4.5 lbs.).¹⁷ Stemming from VitalAire’s answer, the internal battery refers to the battery located inside the portable ventilator only and not to the dual battery pack. The response in mandatory criterion 1.0, where VitalAire did not add the weight of the dual battery pack as part of the internal battery, tends to support the view that the internal battery is the one included inside the ventilator and not the additional dual battery pack. This would appear consistent with PWGSC’s comment that mandatory criterion 2.0 related to the internal battery only. Therefore, based on mandatory criterion 2.0, the internal battery, on its own, would indeed not meet the requirement to supply power to the ventilator for a minimum of eight hours. According to the technical documentation provided with the complaint, the run time for VitalAire’s portable ventilator is about one hour when using the internal battery. The Tribunal accepts as reasonable the view that mandatory criterion 2.0 refers to the internal battery only, in which case, the portable ventilator proposed by VitalAire would definitely not be compliant.

30. Therefore, under these circumstances, and for the reasons stated above, the Tribunal finds that PWGSC was correct in declaring VitalAire’s proposal non-compliant. Accordingly, the Tribunal finds that, in relation to this ground of complaint, the information does not disclose a reasonable indication that the procurement has not been carried out in accordance with the applicable trade agreements.

31. VitalAire’s second and third grounds of complaint were that PWGSC improperly amended the RFP after the bid closing date by specifying standard settings to be used to determine battery run time for purposes of mandatory criterion 2.0 and that PWGSC selected the successful bidder on the basis of these settings. VitalAire also added that PWGSC did not clearly identify the evaluation criteria in the solicitation documents.

32. The Tribunal notes that mandatory criterion 2.0 required the portable ventilators to operate independently from any external power source for a minimum of eight hours at “standard ventilation settings” [emphasis added]. Therefore, the requirement to operate at standard settings was clearly mandatory. The Tribunal further notes that no questions on the nature of these settings were raised by bidders before the bid closing date. In respect of mandatory criterion 2.0, VitalAire’s proposal mentioned that “[r]ecent testing by the manufacturer resulted in run times exceeding 8 hours with standard settings . . . .” During the bidding process, VitalAire did not express any concerns about the meaning of the term “standard settings” nor did it find it necessary to obtain clarification from PWGSC in this regard. Therefore, the Tribunal is of the view that VitalAire’s complaint on the ground that PWGSC did not clearly identify the evaluation criteria in the solicitation documents has not been filed in a timely manner.

33. The Tribunal is also of the view that, while it was improper for PWGSC to request that VitalAire provide information about its proposed product in relation to settings which were not disclosed in the solicitation documents but were specified after bid closing, this alone did not render VitalAire’s proposal non-compliant. As noted above, the Tribunal is of the view that, when assessed against the mandatory criteria published in the RFP, VitalAire’s proposal was non-compliant. Furthermore, while PWGSC may have taken into consideration criteria not set out in the RFP for purposes of evaluating all proposals, there is no evidence to suggest that, had the proposals been assessed against the mandatory criteria published in the RFP, the successful bidder would have been someone other than the incumbent supplier. In fact, the technical specifications for the incumbent supplier’s portable ventilator, which were included as part of VitalAire’s complaint, clearly indicate that it can operate on internal battery power alone for over eight hours.¹⁸

34. Therefore, even if the Tribunal were to conduct an inquiry into the ground of complaint dealing with disclosing criteria after bid closing and if it were to find in favour of VitalAire, the fact that VitalAire’s proposal was non-compliant with the mandatory criteria published in the RFP would mean that VitalAire would still not be eligible for contract award. In addition, and as noted above, there is no evidence which suggests that, based on the mandatory criteria published in the RFP, the incumbent supplier would not have been successful. In these circumstances, the Tribunal does not consider that it would be useful to inquire into VitalAire’s second and third grounds of complaint.

35. VitalAire’s fifth ground of complaint was that PWGSC failed to ensure equal access to the procurement. More specifically, VitalAire submitted that, since there is evidence that demonstrates that the incumbent supplier’s portable ventilator cannot operate on battery power alone for eight hours on the standard settings specified by PWGSC on August 19, 2009, PWGSC failed to examine compliance with those standard settings in evaluating all bids or selected the incumbent supplier’s portable ventilator despite the fact that it does not meet those standard settings.

36. The evidence relied upon by VitalAire is a peer-reviewed report on transport ventilators which was partly funded by the United States Army.¹⁹ In this report, the incumbent supplier’s portable ventilator battery life is estimated at 8 hours and 10 minutes using the following settings: tidal volume of 1 L, respiratory rate of 10 breaths per minute and fraction of inspired oxygen of 0.21.²⁰ In its request for clarification of August 19, 2009, PWGSC asked VitalAire how long its portable ventilator would run on the battery utilizing the following settings: “tidal volume 500, rate 12, peep 5cm H2O.” According to VitalAire, since the settings provided by PWGSC required the units to run at a rate of 12 breaths per minute rather than 10, it estimates that the incumbent supplier’s portable ventilator would run on batteries for approximately 6 hours and 32 minutes at these settings.

37. The Tribunal is not persuaded that this is in fact the case. In the Tribunal’s opinion, VitalAire’s allegation regarding the battery life of the incumbent supplier’s portable ventilator is unsubstantiated and not based on the information contained in that supplier’s proposal or on subsequent clarifications to PWGSC. Moreover, the Tribunal notes that, while PWGSC’s settings did require a higher number of breaths per minute, the tidal volume (i.e. the volume of air for each of those breaths) was only half of that specified in the above-noted report (500 mL as opposed to 1 L). Accordingly, the Tribunal finds that, in relation to this ground of complaint, the information does not disclose a reasonable indication that the procurement has not been carried out in accordance with the applicable trade agreements.

38. In light of the foregoing, the Tribunal will not conduct an inquiry into the complaint and considers the matter closed.

DECISION

39. Pursuant to subsection 30.13(1) of the CITT Act, the Tribunal has decided not to conduct an inquiry into the complaint.

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

² . S.O.R./93-602 [Regulations].

³ . Supplementary complaint dated September 4, 2009, tab 1.

⁴ . 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).

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

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

⁷ . Free Trade Agreement between the Government of Canada and the Government of the Republic of Chile, 1997 Can. T.S. No. 50 (entered into force 5 July 1997). Chapter Kbis, entitled “Government Procurement”, came into effect on September 5, 2008.

⁸ . Public version of complaint, tab 8.

⁹ . Public version of complaint, tab 9.

¹⁰ . Ibid., tab 10.

¹¹ . Ibid., tab 11.

¹² . Supplementary complaint dated September 4, 2009, tab 1.

¹³ . Public version of complaint, tab 3 at 000110.

¹⁴ . Ibid., tab 3 at 000111.

¹⁵ . Ibid., tab 3at 000104.

¹⁶ . Ibid., tab 3 at 000021, 7-2, 14-10, A-9.

¹⁷ . Ibid., tab 3 at 000019, 000021, 000104.

¹⁸ . Ibid., tab 17.

¹⁹ . Ibid., tab 12.

²⁰ . Ibid., tab 12 at 744.