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TABLE OF CONTENTS

• DETERMINATION OF THE TRIBUNAL
• STATEMENT OF REASONS
• • COMPLAINT
  • PROCUREMENT PROCESS
  • TRIBUNAL’S ANALYSIS
  • • Remedy
    • Costs
  • DETERMINATION OF THE TRIBUNAL

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IN THE MATTER OF a complaint filed by Valcom Consulting Group Inc. pursuant to 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 pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act.

BETWEEN
VALCOM CONSULTING GROUP 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 subsections 30.15(2) and (3) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal recommends, as a remedy, that the Department of Public Works and Government Services re-evaluate all proposals received in response to Solicitation No. W8484-07AA15/A, using the original requirement of subparagraph 3.2(b)(iii)(F) of Part 3 of the Request for Proposal, without distinction between the government and non-government addresses.

Pursuant to section 30.16 of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards Valcom Consulting Group 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. 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 the Guideline for Fixing Costs in Procurement Complaint Proceedings. The Canadian International Trade Tribunal retains jurisdiction to establish the final amount of the award.

Dominique Laporte
Dominique Laporte
Secretary

Tribunal Member:	Jason W. Downey, Presiding Member
Director:	Randolph W. Heggart
Senior Investigators:	Michelle Mascoll Cathy Turner
Counsel for the Tribunal:	Eric Wildhaber
Complainant:	Valcom Consulting Group Inc.
Intervener:	ADGA Group Consultants Inc.
Counsel for the Intervener:	Richard A. Wagner
Government Institution:	Department of Public Works and Government Services
Counsel for the Government Institution:	Susan D. Clarke Ian McLeod Karina Fauteux

Please address all communications to:

COMPLAINT

1. On March 10, 2010, Valcom Consulting Group Inc. (Valcom) 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. W8484-07AA15/A) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of National Defence (DND) for the provision of informatics professional services.

2. Valcom alleged that PWGSC changed the evaluation criteria after the solicitation closed. Valcom requested, as a remedy, that the Tribunal recommend that PWGSC re-evaluate all proposals received in response to the solicitation. Valcom also requested that the Tribunal recommend that PWGSC compensate it for its bid preparation costs and its lost profit.

3. On March 18, 2010, 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

4. On March 22, 2010, PWGSC informed the Tribunal that three contracts had been awarded to ADGA Group Consultants Inc. (ADGA) and one contract to Conoscenti Technologies Inc. On March 25, 2010, the Tribunal granted a request by ADGA for intervener status. However, subsequently to this, ADGA filed no submissions.

5. On April 13, 2010, PWGSC filed a Government Institution Report (GIR) with the Tribunal in accordance with rule 103 of the Canadian International Trade Tribunal Rules.³

6. On April 23, 2010, Valcom filed confidential comments on the GIR. On April 27, 2010, Valcom filed a non-confidential version of its comments on the GIR.

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

PROCUREMENT PROCESS

8. On April 9, 2009, PWGSC issued a Request for Proposal (RFP) for the provision of informatics professional services to provide support to the Canadian Forces Supply System. The RFP identified the following five work streams, for which separate contracts were to be awarded:

Stream A: Application Support

Stream B: Testing and [Configuration Management] Services

Stream C: Project Management

Stream D: [Operations] Technical Support

Stream E: Deployed and [Operating System] Servers Technical Support

9. Subparagraph 3.2(b)(iii)(F) of Part 3 of the RFP reads as follows:

. . . Bidders are advised that only listing experience without providing any supporting data to clearly demonstrate where and how such experience was obtained by providing complete details as to where (company name and address), when (month and year) and how (including responsibilities, duties and relevance to the requirements); will result in the experience not being included for evaluation purposes. . . .

10. Paragraph 4.2(a)(i) of Part 4 of the RFP reads as follows:

Each bid will be reviewed for compliance with the mandatory requirements of the bid solicitation. All elements of the bid solicitation that are mandatory requirements are identified specifically with the words “must” or “mandatory”. Bids that do not comply with each and every mandatory requirement will be considered non-responsive and be disqualified.

11. Amendment No. 001 to the RFP was issued on May 15, 2009, and provided answers to questions submitted by potential bidders.

12. Relevant to this complaint were the answers provided to questions 36 and 42, relating to the requirement in the RFP that bidders provide complete details, i.e. company name and address. The questions and answers read as follows:

Question 36 Regarding p. 11 3.2 (b) (F), where it states that the bidder must provide “complete details as to where (company name and address),” please confirm that, for the address, the bidder must provide the city and province or country if the experience is outside of Canada, rather than a street address.

Answer 36 Bidders must provide a company name and address. This address should conform to the addressing convention of the company’s geographical location.

Question 42 Regarding Part 3 - Bid Preparation Instructions, Page 11, Subsection 3.2 (b) (iii) (F) wherein the instructions state “... providing complete details as to where (company name and address)...” Would the Client kindly consider amending this to read only company name? We have found that we are having difficulty providing addresses for companies that have moved/amalgamated/sold or merged into other companies.

Answer 42 See answer 36

13. Amendment No. 002 to the RFP was issued on June 4, 2009. Relevant to this complaint was the following answer provided to question 8:

Question 8: Regarding Section 3.2.b (F) Page 11 of 171: Bidders are advised that only listing experience without providing ... complete details as to where (company name and address) ...” as it relates to Amendment 1, Question and Answer 36 and 42, would the Client kindly clarify why they require [Bidders] to provide Addresses of Client’s referenced within the Resources Resumes? It is our understanding, given considerable investigation into this requirement, that most Resources cannot trace the address of projects that were completed years ago for private companies; most having moved, some having amalgamated with competitors and a few having gone out of business. Would the Client kindly consider amending this requirement to include only Client Name for each Client referenced throughout the Resources Resumes?

Answer 8: Canada is not prepared to change this requirement at this time.

14. On June 17, 2009, bids closed.

15. According to PWGSC, 10 companies, including Valcom, submitted a total of 21 proposals with respect to the five streams.

16. For the purposes of this complaint, only streams B, C and E⁴ are relevant.

17. On November 2, 2009, PWGSC advised Valcom that its proposal for stream B was deemed non-compliant, as it did not meet the mandatory requirements, specifically, the addressing requirement.

18. PWGSC also advised Valcom that its proposal for stream C did not meet the addressing requirement, but that it was also deemed non-responsive on other mandatory requirements.⁵

19. Later in November 2009, PWGSC initiated a review of the application of the addressing requirements to the various proposals submitted by bidders. As a result of the review, PWGSC concluded that, for government references that identified a specific department or agency, more specific address information ought to be within the knowledge of the Crown. On the other hand, references by bidders to non-government projects without a complete address, i.e. not including a street address, would still be considered non-compliant with the detailed address requirements of the RFP.⁶

20. As a consequence, PWGSC initiated a reassessment of Valcom’s proposal for stream B with respect to the incomplete address issue. The review results would also be taken into account in the continuing evaluation of its proposal for stream E. No further review of Valcom’s proposal for stream C was required, as the proposal had been deemed non-compliant for reasons unrelated to the address issue.⁷

21. On February 4, 2010, PWGSC advised Valcom via e-mail that its proposal for stream E was deemed non-compliant with regard to the addressing requirement and that a contract had been awarded to ADGA.⁸

22. On February 24, 2010, PWGSC advised Valcom that, as a result of the reassessment of its proposal for stream B, with respect to the incomplete address issue, the proposal had now been deemed responsive, since there was sufficient cited work experience for which the address requirements could be met in order to meet the minimum requirements. However, Valcom was advised that its proposal was not successful, as it did not have the lowest price per point.

23. In an e-mail on February 26, 2010, Valcom made an objection to PWGSC and asked for its other proposals (for streams C and E) to be re-evaluated.

24. In a reply e-mail on the same date, PWGSC advised Valcom that the revised evaluation methodology that had been applied to stream B had also been applied to stream E, but that there had been no change in the results.

25. As for stream C, its proposal had not been reassessed, since it had been deemed non-compliant with certain mandatory requirements of the solicitation, which were unrelated to the address issue.

26. On March 10, 2010, Valcom filed its complaint with the Tribunal in a timely manner.

TRIBUNAL’S ANALYSIS

27. 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.

28. 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.

29. Section 11 of the Regulations provides that the Tribunal is required to determine whether the procurement was conducted in accordance with the applicable trade agreements, which, in this instance, are the Agreement on Internal Trade,⁹ the North American Free Trade Agreement,¹⁰ the Canada-Chile Free Trade Agreement ¹¹ and the Agreement on Government Procurement.¹²

30. The Canada-Peru Free Trade Agreement ¹³ does not apply to this case, as it came into effect on August 1, 2009, which was after the date of issuance of the RFP.

31. Article 506(6) of the AIT provides that “[t]he 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.”

32. Article 1013(1)(h) of NAFTA provides that “[w]here an entity provides tender documentation to suppliers, the documentation shall contain all information necessary to permit suppliers to submit responsive tenders, including . . . the criteria for awarding the contract, including any factors other than price that are to be considered in the evaluation of tenders . . . .”

33. Article 1015(4)(a) of NAFTA provides that, “to be considered for award, a tender must, at the time of opening, conform to the essential requirements of the notices or tender documentation and have been submitted by a supplier that complies with the conditions for participation.” Article 1015(4)(d) provides that “awards shall be made in accordance with the criteria and essential requirements specified in the tender documentation.”

34. The AGP and the CCFTA also contain similar provisions.

35. Valcom submitted that the process of objectively evaluating all resulting proposals in the contracting process was clearly compromised and, as such, compromised the entire contracting procurement process, by extension.

36. Valcom contended that, when an evaluation criterion can be identified in the disqualification of a proposal, the criterion should not change after the closing date of the solicitation, nor should it change during the evaluation of other proposals submitted in response to the very same solicitation.

37. PWGSC submitted that it has been well established by the Tribunal that, in the course of an evaluation process, evaluators may review, verify and, if necessary, revise any initial or preliminary findings made at an earlier stage of the process. In this regard, PWGSC submitted that the evaluators applied their revised approach with respect to the incomplete address issue, taking into account listed projects with identified government departments and agencies, despite the lack of detailed address information.

38. The Tribunal notes that, from the language in subparagraph 3.2(b)(iii)(F) of Part 3 of the RFP, it is clear that PWGSC wanted bidders to provide detailed addresses when describing their work experience. It is also clear that this provision makes no distinction between government and non-government addressing criteria.

39. In response to question 36 of amendment No. 001 to the RFP, PWGSC clarified that the company name and address that must be provided should conform to the addressing convention of the company’s geographical location. The RFP does not contain a definition of “addressing convention”, and PWGSC did not provide one through the question and answer process.

40. The Tribunal is of the view that, in Canada, an address must at least include a civic address number, a street name, the name of a town, city or locality and a province or territory. If someone were to seek an address, these are parameters that would need to be considered in order to point the person in the right direction. As for postal codes, the Tribunal is of the opinion that, although helpful in some instances, they are mostly reserved for Canada Post mail delivery and therefore not essential to the determination of an address per se.

41. In response to question 42 of amendment No. 001 to the RFP, PWGSC was clear when a potential bidder requested an amendment to the requirement in question and simply referred to the answer to question 36.

42. The Tribunal notes that the RFP requires addresses for all references and makes no distinction as to whether this requirement could be modified or waived for any type of reference or whether it could apply to some organizations and not to others.

43. The Tribunal is of the view that PWGSC required a “clear demonstration” of “complete details” as to the address. This is stated in the RFP and is further clarified through the amendments to the RFP. The Tribunal is of the view that, had PWGSC wanted something different, it would have said so in an amendment to the RFP.

44. Accordingly, the Tribunal finds that PWGSC unilaterally changed the evaluation criteria and relaxed the addressing requirements for government references. This is contrary to the requirements of the RFP and to the explanations provided through the question and answer process, in particular, answers 36 and 42.

45. Bidders are entitled to know the manner in which the evaluation will be carried out. In this regard, they rely on the RFP and subsequent amendments to develop proposals. The Tribunal is of the view that nothing in the RFP could have allowed a bidder to know that a distinction would be made between government and non-government addressing requirements.

46. The Tribunal recognizes that such a modification could be seen as beneficial to Valcom, because it would appear to have allowed one of its proposals to be deemed compliant, rather than non-compliant. However, the Tribunal is of the view that such a consideration is irrelevant, since the Tribunal’s sole focus is whether the procurement process was carried out in accordance with the applicable trade agreements.

47. The Tribunal finds that the adoption of the revised evaluation methodology constitutes the introduction by PWGSC of evaluation criteria that were not identified in the RFP. This new methodology could not have been predicted from the various iterations of the RFP and the question and answer process during the tendering period.

48. In light of the foregoing, the Tribunal finds that the use of criteria not stated in the RFP by PWGSC to evaluate Valcom’s proposal constitutes a violation of the applicable trade agreements and therefore determines that the complaint is valid.

Remedy

49. Having determined that Valcom’s complaint is valid, the Tribunal must now recommend the appropriate remedy.

50. In recommending a remedy, the Tribunal is governed by subsection 30.15(3) of the CITT Act, which provides as follows:

(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.

51. The Tribunal considers that not evaluating a bid in accordance with the mandatory criteria provided in the RFP represents a serious deficiency in the procurement process, since the evaluation deals with mandatory material and therefore directly impacts the qualification of potential suppliers. One need only consider that such a simple addressing requirement is sufficient to completely disqualify a potential supplier, which may otherwise be compliant on the whole, to appreciate the seriousness of such an issue.

52. When dealing with mandatory requirements, both parties are bound by a very strict set of rules, and the bidder should be afforded the same exacting consideration as the contracting authority itself requires through the RFP.

53. The Tribunal considers the degree of prejudice to Valcom to be low, inasmuch as the change actually allowed Valcom to qualify itself for stream B where it would otherwise have been disqualified. No evidence was presented relating to any other party being prejudiced as a result of the revised mandatory criterion.

54. Nevertheless, the Tribunal remains concerned with maintaining the integrity and efficiency of the competitive procurement process. In this regard, impartiality and fairness are paramount considerations.

55. In the present instance, the Tribunal is of the view that modifying a mandatory criterion is prejudicial to the integrity of the competitive procurement process, since the modification relates to the fair and transparent assessment of the merits of bidders’ proposals.

56. Bidders need to rely on the prescribed evaluation criteria to formulate their proposals. Otherwise, bidders are unable to optimize their efforts to be the successful bidder.

57. Although such a change is highly irregular, the evidence does not indicate that the evaluators were not acting in good faith when they conducted their evaluations.

58. Taking all aspects of this case into consideration, along with the extent to which the contract has been performed, the Tribunal is of the view that the appropriate remedy is to recommend that PWGSC re-evaluate all proposals received in accordance with the original requirement of subparagraph 3.2(b)(iii)(F) of Part 3 of the RFP, without distinction between government and non-government addresses.

Costs

59. The Tribunal awards Valcom its reasonable costs incurred in preparing and proceeding with the complaint.

60. 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.

61. 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. Although the procurement was moderately complex, as it dealt with five streams of professional services categories, the complexity of the complaint was low, as it only involved the issue of one mandatory evaluation criterion.

62. For their part, the complaint proceedings were not complex, as there were no motions and no additional submissions by parties.

63. Accordingly, as contemplated by the Guideline, the Tribunal’s preliminary indication of the amount of the cost award is $1,000.

DETERMINATION OF THE TRIBUNAL

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

65. Pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends, as a remedy, that PWGSC re-evaluate all proposals received in response to Solicitation No. W8484-07AA15/A, using the original requirement of subparagraph 3.2(b)(iii)(F) of Part 3 of the RFP, without distinction between the government and non-government addresses.

66. Pursuant to section 30.16 of the CITT Act, the Tribunal awards Valcom its reasonable costs incurred in preparing and proceeding with the complaint, which costs are to be paid by PWGSC. 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 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 . S.O.R./93-602 [Regulations].

³ . S.O.R./91-499.

⁴ . The RFP contained five streams, and Valcom submitted proposals in response to three of the five streams.

⁵ . Confidential GIR, exhibits 13, 14.

⁶ . GIR, para. 48.

⁷ . GIR, para. 49.

⁸ . Confidential GIR, exhibit 18.

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

¹⁰ . 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) [NAFTA].

¹¹ . 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) [CCFTA]. Chapter Kbis, entitled “Government Procurement”, came into effect on September 5, 2008.

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

¹³ . Free Trade Agreement between Canada and the Republic of Peru, online: Department of Foreign Affairs and International Trade <http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-... (entered into force 1 August 2009).