ESPER CONSULTING INC.
ESPER CONSULTING INC.
File No. PR-2010-083
Decision made
Friday, January 21, 2011
Decision and reasons issued
Thursday, February 3, 2011
IN THE MATTER OF a complaint filed pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C. 1985 (4th Supp.), c. 47
BY
ESPER CONSULTING INC.
AGAINST
THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES
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.
Stephen A. Leach
Stephen A. Leach
Presiding Member
Dominique Laporte
Dominique Laporte
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. EN578-055605/D) by the Department of Public Works and Government Services (PWGSC) on behalf of various government departments for the provision of task-based informatics professional services (TBIPS).
3. Esper Consulting Inc. (Esper) alleged that PWGSC refused to disclose or clearly define the evaluation criteria and the methods of weighting and evaluating the criteria used to determine a bidder’s financial viability and that, without this information, bidders had insufficient information upon which to assess their potential to qualify.
4. 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.”
5. In other words, 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. If a complainant objects to the government institution within the designated time, the complainant may file a complaint with the Tribunal within 10 working days after it has actual or constructive knowledge of the denial of relief by the government institution.
6. On November 9, 2010, PWGSC issued a Request for a Standing Offer (RFSO) and a Request for a Supply Arrangement (RFSA) for the yearly refresh of standing offers and supply arrangements for the provision of TBIPS.
7. Article A4.6, “Financial Viability”, of the RFSO/RFSA, which is relevant in this case, reads as follows:
1. Financial Viability Requirement: The Supplier must be financially viable to enter into the Standing Offer or Supply Arrangement. To determine the Supplier’s financial viability, the Supply Arrangement Authority may, by written notice to the Supplier, require the submission of some or all of the financial information detailed below during the evaluation of offers. . . .
8. Article A4.6 of the RFSO/RFSA then goes on to list the type of financial information that may be requested by PWGSC, which is mainly limited to financial statements. However, the article also provides that “Canada reserves the right to request from the Supplier any other information that Canada requires to conduct a complete financial capability assessment of the Supplier.”
9. On November 26, 2010, PWGSC issued amendment No. 003 to the RFSO/RFSA. In that amendment, in response to a request for the disclosure of the criteria that would be used to determine financial viability, PWGSC responded as follows:
A12: Canada can only make a determination based on the information provided. Although Canada looks at a number of elements to determine an Offeror’s financial viability, including but not limited to the size of the company, profitability, working capital, company trend, debt ratio, and the company’s ability to finance. There is no single specific financial model used because Canada takes into account information derived from a number of sources in making its determination. Please note that the financial information will only be required if requested.
10. On December 17, 2010, PWGSC issued amendment No. 006 to the RFSO/RFSA. In that amendment, in response to a question as to why PWGSC was refusing to provide bidders with quantifiable criteria relating to the evaluation of financial viability, PWGSC responded as follows:
A58:
Article A4.6 requires that a bidder must be financially viable to be able to enter into the Standing Offer or Supply Arrangement. Being financially viable means that the Bidder has the financial means to successfully enter into and complete such contracts as may be issued as a result of this solicitation, pursuant to the terms of such contracts.
Canada must retain the right to satisfy itself of the financial viability of bidders in order to ensure appropriate risk management practices can be applied to the contracts issued. In order to verify that a bidder has this ability, Canada may request financial and other information, as indicated in the Article.
Since each bidder’s financial and commercial circumstances are unique, the information necessary for Canada to determine a bidder’s financial viability in respect of the requirements of the solicitation will vary depending on the circumstances of the Bidder. In this regard, the financial information that exists in respect of any given bidder can vary widely. In order to be fair to all bidders, PWGSC must reserve to itself the ability to review all information that may be relevant for an effective financial viability analysis, and in doing so it cannot exhaustively list all of the possible sources of relevant information in the bid solicitation and the manner in which they could influence the professional opinion necessary to determine financial viability, as such enumeration could cause PWGSC to be unable to take into account information that could be crucial to a fair assessment.
As a universal and common approach for all bidders, PWGSC is reserving its ability to look to as many factors as are necessary in order to conduct a reasoned and sound financial viability analysis. Bidders should be aware that no one factor will be determinative in respect of forming the financial viability opinion.
11. On January 12, 2011, bids closed. Esper submitted a proposal in response to the solicitation.
12. Esper submitted that, as of the bid closing date, PWGSC had failed to provide a clear, objective, quantifiable and transparent definition of the requirements for financial viability. It also submitted that PWGSC did not address the question of what constituted proof of financial viability and did not offer any rating system or provide any specific measurement criteria used to assess the financial viability of bidders.
13. The Tribunal notes that, in a previous similar complaint filed by Esper in respect of the preceding yearly refresh of standing offers and supply arrangements for the provision of TBIPS,3 it found, on the basis of the evidence submitted, that Esper knew, or reasonably should have known, the basis of its complaint by the bid closing date. As Esper had not made an objection to PWGSC or filed its complaint with the Tribunal within 10 working days of the bid closing date, the Tribunal found that the complaint had been filed outside the time limit established in the Regulations.
14. In the complaint now before the Tribunal, the evidence submitted by Esper indicates that it knew, or reasonably should have known, the basis of its complaint before the bid closing date. More specifically, the Tribunal considers that Esper knew, or reasonably should have known, the basis of its complaint when it took notice of the solicitation documents or, at the latest, when it took notice of the answers provided by PWGSC through the solicitation amendments. In the Tribunal’s view, having already filed a complaint regarding the same substantive issue, Esper should have known that PWGSC was once again adopting a similar approach when it took notice of the solicitation documents. If Esper had any remaining doubts, these should clearly have been dispelled when it took notice of the solicitation amendments. As the last solicitation amendment, which included a response by PWGSC addressing the “financial viability” criteria, was issued on December 17, 2010, Esper had, at the latest, until January 5, 2011 (i.e. within 10 working days after December 17, 2010), to make an objection to PWGSC or to file a complaint with the Tribunal. There is no evidence that Esper made an objection to PWGSC. Esper filed its complaint with the Tribunal on January 18, 2011.
15. Accordingly, the Tribunal finds that the complaint was filed outside the time limit established in the Regulations.
16. Even if the complaint had been filed within the prescribed time limit, the Tribunal would not have found that, in accordance with paragraph 7(1)(c) of the Regulations, it disclosed a reasonable indication that the procurement was not conducted in accordance with the applicable trade agreements, which, in this case, are the North American Free Trade Agreement,4 the Agreement on Internal Trade,5 the Agreement on Government Procurement,6 the Canada-Chile Free Trade Agreement 7 and the Canada-Peru Free Trade Agreement.8
17. In the Tribunal’s view, Article A4.6 of the RFSO/RFSA, together with the responses provided by PWGSC through various solicitation amendments, provided bidders with as much information as could reasonably be provided under the circumstances. The Tribunal recognizes that the information necessary to determine a bidder’s financial viability can vary widely and that, if PWGSC was required to list all the possible sources of information and the manner in which they could influence the outcome of its assessment, it could be prevented from taking into account information that could deprive certain bidders from receiving a fair assessment. The Tribunal notes however that this does not give PWGSC carte blanche to consider any information in performing its evaluation. The information must be of the kind that would normally and reasonably be associated with a determination of financial viability.
18. Therefore, the Tribunal will not inquire into the complaint and considers the matter closed.
DECISION
19. Pursuant to subsection 30.13(1) of the CITT Act, the Tribunal has decided not to conduct an inquiry into the complaint.
1 . R.S.C. 1985 (4th Supp.), c. 47 [CITT Act].
2 . S.O.R./93-602 [Regulations].
3 . Re Complaint Filed by Esper Consulting Inc. (29 July 2010), PR-2010-017 (CITT).
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 . 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).