168446 CANADA INC. (DELTA PARTNERS)
168446 CANADA INC. (DELTA PARTNERS)
v.
DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES
File No. PR-2010-007
Determination and reasons issued
Tuesday, July 27, 2010
IN THE MATTER OF a complaint filed by 168446 Canada Inc. (Delta Partners) 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
168446 CANADA INC. (DELTA PARTNERS) 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 not valid.
Stephen A. Leach
Stephen A. Leach
Presiding Member
Gillian Burnett
Gillian Burnett
Acting Secretary
Tribunal Member: Stephen A. Leach, Presiding Member
Director: Randolph W. Heggart
Senior Investigator: Cathy Turner
Counsel for the Tribunal: Eric Wildhaber
Complainant: 168446 Canada Inc. (Delta Partners)
Counsel for the Complainant: Charles S. Wiseman
Government Institution: Department of Public Works and Government Services
Counsel for the Government Institution: David M. Attwater
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:
1. On May 4, 2010, 168446 Canada Inc. (Delta Partners) filed a complaint with the Canadian International Trade Tribunal (the Tribunal) pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act 1 concerning a procurement (Solicitation No. W8484-098271/B) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of National Defence for the provision of technical writer services.
2. Delta Partners alleged that PWGSC improperly disqualified its proposal on the basis that it did not meet the mandatory security requirement. Delta Partners requested, as a remedy, that the Tribunal recommend that PWGSC terminate the contract awarded to CGI Information Systems and Management Consultants Inc. (CGI) and award the contract to Delta Partners. It also requested the reimbursement of its reasonable costs incurred in preparing and proceeding with the complaint.
3. On May 11, 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 The Tribunal did not issue a postponement of award of contract order pursuant to subsection 30.13(3) of the CITT Act, since the evidence on file indicated that a contract had already been issued.
4. On June 7, 2010, PWGSC filed a Government Institution Report (GIR) with the Tribunal in accordance with rule 103 of the Canadian International Trade Tribunal Rules.3 On June 21, 2010, Delta Partners filed its comments on the GIR.
5. 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
6. On November 12, 2009, PWGSC issued a Request for Proposal (RFP) for the provision of technical writer services. On December 22, 2009, Delta Partners submitted its proposal, and bids closed that same day. According to PWGSC, four proposals were received in response to the RFP.
7. The RFP reads as follows:
PART 6 – SECURITY AND OTHER REQUIREMENTS
1. Security Requirement
1. At the date of bid closing, the following conditions must be met:
(a) the Bidder must hold a valid organization security clearance as indicated in Part 7 – Resulting Contract Clauses;
(b) The Contractor must, at all times during the performance of the Contract, hold a valid Facility Security Clearance at the level of SECRET, with approved Document Safeguarding at the level of SECRET, issued by the Canadian Industrial Security Directorate, Public Works and Government Services Canada.
. . .
PART 7 – RESULTING CONTRACT CLAUSES
. . .
3. Security Requirement
1. The Contractor/Offeror must, at all times during the performance of the Contract/Standing Offer, hold a valid Facility Security Clearance at the level of SECRET, issued by the Canadian Industrial Security Directorate (CISD), Public Works and Government Services (PWGSC).
8. In its proposal, Delta Partners indicated that it had the required security clearance.4
9. According to PWGSC, on December 29, 2009, the contracting authority sought confirmation from CISD that the four bidders held the necessary security clearances at bid closing. CISD advised the contracting authority that only one bidder, CGI, held the necessary security clearance and that Delta Partners had not been granted a Document Safeguarding Capability.
10. On March 18, 2010, PWGSC awarded a contract to CGI.
11. On March 23, 2010, PWGSC advised Delta Partners that its proposal did not comply with the security requirements. According to the complaint, that same day, Delta Partners made an objection to PWGSC regarding its decision. Later that day, PWGSC advised Delta Partners that, after reviewing the matter, it had determined that the security clearance had not been granted until January 25, 2010. On April 1, 2010, at the request of Delta Partners, the contracting authority advised Delta Partners that PWGSC would look into the matter.
12. On April 8, 2010, Delta Partners explained to PWGSC that, based on previous correspondence from CISD, it assumed that it would be granted Document Safeguarding Capability before bid closing. On April 15, 2010, the Director General of the contracting section advised Delta Partners that his team would review the matter to resolve the issue.
13. On April 20, 2010, the contracting authority advised Delta Partners that PWGSC considered the proposal to be a joint proposal between 168446 Canada Inc. and Delta Partners Inc. and that, at the time of bid closing, neither company held the required security clearance and that, therefore, the proposal did not comply with the requirements of the RFP.
14. On April 21, 2010, Delta Partners advised PWGSC that its proposal was not a joint submission and provided documentation to support its claim that the company did hold the required clearance.
15. On April 27, 2010, PWGSC requested that Delta Partners provide it with “. . . the CISD letter signed by the Chief, Industrial Security Operations Division attesting that 168446 Canada Inc. held the valid organization security clearance at time of bid closing . . . .” On April 28, 2010, the Chief of the Industrial Security Operations Division provided a letter to Delta Partners that indicated that “. . . 168446 Canada Inc. (5333-00) met the physical security requirements for Document Safeguarding Capability up to and including Secret level . . . as of November [25], 2009. . . . Due to extenuating circumstances, this report was not processed until January 25th, 2010, but all necessary approvals were in place on November 25, 2009.”
16. On May 4, 2010, Delta Partners filed its complaint with the Tribunal.
PRELIMINARY MATTER
17. 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.”
18. Subsection 6(2) of the Regulations states that “[a] potential supplier who 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.”
19. PWGSC submitted that it gave Delta Partners a denial of relief on March 23, 2010, based on its finding that the necessary security clearance was not granted to Delta Partners until after bid closing.
20. PWGSC submitted that, since receiving the denial of relief on March 23, 2010, Delta Partners had not learned anything fundamentally new as to why its proposal had been deemed non-compliant. Therefore, it submitted that the complaint is untimely.
21. Delta Partners submitted that the 10-working-day deadline may be seen as commencing on the last day of the final communication attempt to resolve the contracting issue. It submitted that this date was April 27, 2010, when PWGSC was still investigating and reviewing the validity of Delta Partners’ security clearance status and had not yet finalized its position on the matter.
22. The Tribunal is of the view that on April 1 and 15, 2010, contemporaneous communications from PWGSC indicated that the matter was still being reviewed and might still be resolved in Delta Partners’ favour. The Tribunal finds that Delta Partners had actual knowledge of its denial of relief on April 20, 2010, when it was advised by PWGSC that, after a review, its proposal was deemed non-compliant. On May 4, 2010, Delta Partners filed its complaint with the Tribunal, which was within the required 10-working-day time frame. Therefore, the Tribunal finds that the complaint was filed in a timely manner.
TRIBUNAL’S ANALYSIS
23. 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. 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 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,5 the North American Free Trade Agreement ,6 the Canada-Chile Free Trade Agreement,7 the Agreement on Government Procurement 8 and the Canada-Peru Free Trade Agreement. 9
24. 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.”
25. Article 1013(1) 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 “. . . h. the criteria for awarding the contract, including any factors other than price that are to be considered in the evaluation of tenders . . . .”
26. 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”.
27. The AGP, the CCFTA and the CPFTA contain provisions similar to those found in NAFTA.
28. PWGSC submitted that Delta Partners held a Facility Security Clearance at the secret level, but had not been granted, at bid closing, a Document Safeguarding Capability at any level.
29. PWGSC submitted that the Acquisitions Branch of PWGSC conducted the evaluation of Delta Partners’ proposal based on information therein and on information received from CISD to verify the information provided in the proposal. PWGSC contended that the Acquisitions Branch made the correct decision based on the information available to it. It submitted that the Acquisitions Branch must be distinguished from CISD, which has the authority to grant security clearances.
30. Delta Partners submitted that the security requirements form an integral part of the solicitation document and are an implicit part of the procurement process. Furthermore, the confirmation of security clearance and communication with the bidder’s appointed representative are also part of the procurement process, as outlined in the solicitation document.
31. In its comments on the GIR, Delta Partners stated the following: “. . . it was fairly assumed by 168446 Canada Inc. that its Facility Security Clearance would be valid and in compliance with the requirements . . . prior to the date of bid closing . . . as originally discussed with the CISD.” Delta Partners also stated that it contacted CISD by telephone on more than one occasion to follow up on the status of the issuance of the security clearance and to emphasize the need to have clearance validated and documented prior to bid closing.10
32. PWGSC submitted that the time required by CISD to award Delta Partners the security clearance does not constitute an “aspect of the procurement process” conducted by the Acquisitions Branch of PWGSC over which the Tribunal has jurisdiction. It submitted that Delta Partners bore the responsibility of ensuring that its proposal was compliant with all mandatory elements of the RFP.
33. The Tribunal is of the view that the mandatory requirement is clear: bidders were to hold a valid organization security clearance (Facility Security Clearance) at the secret level with Document Safeguarding Capability at the secret level, issued by CISD.11 According to PWGSC, an organization is granted a Facility Security Clearance when notified in writing by the Director of CISD.12
34. The Tribunal notes that, by its own admission, on January 22, 2010, Delta Partners had not received notice in writing of any Document Safeguarding Capability.13 The Tribunal also notes that, in his letter to Delta Partners dated April 28, 2010, the Chief of the Industrial Security Operations Division advised as follows: “Due to extenuating circumstances, [the Field Investigative Security Officer’s report] was not processed until January 25th, 2010, but all necessary approvals were in place on November 25, 2009.”
35. It is clear from the evidence presented that it was the responsibility of Delta Partners to meet all the bidding requirements, including a mandatory requirement to hold a valid organization security clearance issued by CISD before bidding closed, and that Delta Partners failed to meet this requirement.
36. Notwithstanding the above, as a practical matter, the Tribunal notes that if the relevant parties—Delta Partners, CISD and PWGSC—had taken the time to communicate with each other to ensure that the official approval was granted on a timely basis or, if necessary, to request a delay in the bid closing date, it may have been possible to resolve this issue or for Delta Partners to have argued that it was being prevented from being able to meet a mandatory requirement of the RFP by reason only of a process that was internal to PWGSC. Nevertheless, in the present circumstances, however reluctantly it has come to this decision, the Tribunal cannot but find that a mandatory requirement of the RFP was not met at bid closing.
37. Accordingly, the evidence does not indicate that PWGSC improperly disqualified Delta Partners’ proposal. The Tribunal therefore finds that the complaint is not valid.
Costs
38. In determining whether costs should be awarded in this case, the Tribunal considers that, although the complaint fails for the reasons given above, as a practical matter, it could have been entirely avoided if CISD, Delta Partners and PWGSC had communicated with each other on a timely basis. Therefore, in the circumstances of this case, no costs will be awarded.
DETERMINATION OF THE TRIBUNAL
39. Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is not valid.
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 . Confidential complaint, tab 4 at 26.
5 . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/index_en/ait.htm> [AIT].
6 . 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].
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) [CCFTA]. Chapter Kbis, entitled “Government Procurement”, came into effect on September 5, 2008.
8 . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm> [AGP].
9 . 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) [CPFTA].
10 . Comments on the GIR at 4.
11 . According to PWGSC, a Facility Security Clearance permits an organization, and its security-cleared employees, access to classified information. Having a Facility Security Clearance with Document Safeguarding Capability allows a private sector organization to safeguard government-sensitive information and assets on its premises. Having Document Safeguarding Capability provides for an upgraded Facility Security Clearance. GIR at para. 22.
12 . GIR, exhibit 3.
13 . E-mail dated January 22, 2010, from Delta Partners to the Registration Analyst from the Industrial Security Sector of PWGSC, wherein Delta Partners states as follows: “To date, we don’t seem to have received an official record of such an award.”