File No. PR-2018-023 Horizon Maritime Services Ltd. / Heiltsuk Horizon Maritime Services Ltd. v. Department of Public Works and Government Services

Determination issued Wednesday, January 2, 2019 Reasons issued Monday, January 7, 2019 Corrigendum issued Monday, January 14, 2019

 

TABLE OF CONTENTS

DETERMINATION  i

CORRIGENDUM  iii

STATEMENT OF REASONS  1

SUMMARY OF COMPLAINT  1

PROCEDURAL BACKGROUND  2

Requests for Information in preparation for the RFP  2

The RFP process  2

The complaint proceedings  4

PRELIMINARY MATTER  6

The intervener request from Canship Ugland Ltd.  6

Production of the evaluator’s notes  6

ANALYSIS  7

Was it reasonable for PWGSC to conclude that ATL’s bid was compliant with MR 12?  8

Did PWGSC demonstrate a bias towards ATL during the solicitation process?  14

Conclusion  16

REMEDY  16

COSTS  18

DETERMINATION  19

APPENDICES  21

APPENDIX I: GROUNDS OF HEILTSUK HORIZON’S COMPLAINT  21

APPENDIX II: RELEVANT TERMS OF THE RFP  22

 

IN THE MATTER OF a complaint filed by Horizon Maritime Services Ltd. / Heiltsuk Horizon Maritime Services Ltd. pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C., 1985, c. 47 (4th Supp.);

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
HORIZON MARITIME SERVICES LTD. / HEILTSUK HORIZON MARITIME SERVICES LTD.	Complainant
AND
THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES	Government Institution

DETERMINATION

Pursuant to subsection 30.14(2) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal determines that the complaint is valid in part.

Pursuant to subsections 30.15(2) and (3) of the Canadian International Trade Tribunal Act, the Tribunal recommends that the Department of Public Works and Government Services (PWGSC) re‑evaluate mandatory requirement No. 12 of the Request for Proposals for all of the bids received prior to bid closing, as soon as practicable and no later than within six months of the issuance of this determination. The Tribunal recommends that the current designated contract remain with the winning bidder, Atlantic Services Limited (ATL), until the completion of the re-evaluation. However, the Tribunal recommends that no further expenditure under the contract be undertaken by PWGSC pending the re‑evaluation.

In the event that PWGSC’s re-evaluation finds that a bidder other than ATL submitted the top‑ranked responsive bid, the Tribunal recommends that PWGSC terminate the current designated contract with ATL and award a new contract to the new top-ranked responsive bidder.

If the new top-ranked responsive bidder is Horizon Maritime Services Ltd. / Heiltsuk Horizon Maritime Services Ltd. (Heiltsuk Horizon), the Tribunal recommends that:

• PWGSC compensate Heiltsuk Horizon for the profit, if any, that it would have earned had it been awarded the contract, for the period from the award of contract to ATL until a new contract is awarded to Heiltsuk Horizon.
• if, for operational reasons, PWGSC considers that it is not feasible to terminate the contract with ATL and award a new contract to Heiltsuk Horizon, PWGSC compensate Heiltsuk Horizon for its lost profit.
• Heiltsuk Horizon and PWGSC negotiate the amount of compensation to be paid for lost profit, and report the outcome of the negotiations to the Tribunal within 30 days from the date of Heiltsuk Horizon receiving notice of the results of the re-evaluation.
• should the parties be unable to agree on the amount of compensation, Heiltsuk Horizon file with the Tribunal, within 40 days from the date of receiving notice of the results of the re‑evaluation, a submission on the issue of compensation. PWGSC will then have seven working days after the receipt of Heiltsuk Horizon’s submission to file a response. Heiltsuk Horizon will then have five working days after the receipt of PWGSC’s submission to file any additional comments. Counsel are required to serve each other and file with the Tribunal simultaneously. Subsequent to these submissions, the Tribunal will issue an order with a recommendation on the quantum of compensation.

Pursuant to section 30.16 of the Canadian International Trade Tribunal Act, the Tribunal awards Heiltsuk Horizon its reasonable costs incurred in preparing and proceeding with this complaint, which costs are to be paid by PWGSC. The Tribunal finds that this case warrants deviation from its Procurement Costs Guideline. The Tribunal retains jurisdiction to establish the final amount of the cost award and will inform the parties of the schedule for submissions on costs at a later date.

The statement of reasons will be issued at a later date.

IN THE MATTER OF a complaint filed by Horizon Maritime Services Ltd. / Heiltsuk Horizon Maritime Services Ltd. pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C., 1985, c. 47 (4th Supp.);

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
HORIZON MARITIME SERVICES LTD. / HEILTSUK HORIZON MARITIME SERVICES LTD.	Complainant
AND
THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES	Government Institution

CORRIGENDUM

Counsel for the Complainant should have read: Frank Metcalf, Q.C., Seamus Ryder, Gerry Stobo, Marc McLaren-Caux and Cynthia Wallace.

By order of the Tribunal,

 

Tribunal Panel:	Ann Penner, Presiding Member
Support Staff:	Laura Little, Counsel
Complainant:	Horizon Maritime Services Ltd. / Heiltsuk Horizon Maritime Services Ltd.
Counsel for the Complainant:	Frank Metcalf, Q.C.
Government Institution:	The Department of Public Works and Government Services Canada
Counsel for the Government Institution:	Peter J. Osbourne
	Brendan Morrison
	Zachary Rosen
Intervener:	Atlantic Towing Limited
Counsel for the Intervener:	Paul Conlin
	Ben Mills
	Carly Haynes

Please address all communications to:

The Registrar
Secretariat to the Canadian International Trade Tribunal
333 Laurier Avenue West
15th Floor
Ottawa, Ontario  K1A 0G7

Telephone: 613-993-3595
Fax: 613-990-2439
E-mail: citt-tcce@tribunal.gc.ca

 

STATEMENT OF REASONS

[1]  This inquiry concerns a complaint filed by Horizon Maritime Services Ltd. / Heiltsuk Horizon Maritime Services Ltd. [1] (Heiltsuk Horizon) in relation to a procurement (Solicitation No. F7017-160056/C) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of Fisheries and Oceans. The solicitation was issued to satisfy the requirement of the Canadian Coast Guard (CCG) for the provision of service from two Emergency Towing Vessels (ETV) on a time charter basis.

[2]  The Canadian International Trade Tribunal accepted the complaint for inquiry pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act [2] and in accordance with the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations. [3]

[3]  The Tribunal conducted an inquiry into the validity of the complaint as required by sections 30.13 to 30.15 of the CITT Act. For the reasons that follow, the Tribunal finds that the complaint is valid, in part.

SUMMARY OF COMPLAINT

[4]  Heiltsuk Horizon filed its complaint on August 20, 2018. It put forward two main allegations about the manner in which PWGSC allegedly conducted the procurement process for the solicitation at hand. [4] First, Heiltsuk Horizon alleged that PWGSC demonstrated bias towards the winning bidder, Atlantic Towing Limited (ATL) by structuring the provisions of the Request for Proposals (RFP) to favour its bid. Heiltsuk Horizon claimed that the mandatory requirement for maximum vessel age (MR 18) was amended from 15 to 20 years during consultations prior to the RFP in order to favour ATL’s 20-year-old vessels. According to Heiltsuk Horizon, PWGSC had been working with ATL “in private” months before the RFP was issued and before any other potential suppliers even knew about the requirement. In its view, PWGSC’s bias towards ATL tainted the entire solicitation process and cast doubt on the impartiality of the evaluation committee.

[5]  Second, Heiltsuk Horizon alleged that PWGSC breached its duty to reject non-compliant bids by concluding that ATL’s proposed vessels met the minimum mandatory bollard pull [5] requirement of the RFP (MR 12). Heiltsuk Horizon argued that it reported this alleged non-compliance to PWGSC prior to contract award but that PWGSC failed to investigate its concerns and nonetheless proceeded with the contract award to ATL. Heiltsuk Horizon interpreted PWGSC’s alleged failure to investigate the matter as further indication that it gave ATL’s bid favourable treatment.

[6]  As a remedy, Heiltsuk Horizon requested that the contract awarded to ATL be terminated and that it be awarded a new contract. In the alternative, Heiltsuk Horizon sought compensation for its lost profits or lost opportunity. It further requested the reimbursement of both its bid preparation and complaint costs.

PROCEDURAL BACKGROUND

Requests for Information in preparation for the RFP

[7]  On November 17, 2016, PWGSC issued a Letter of Intent / Request for Information (solicitation No. F7017-160056/A) (“RFI A”) for the stated purposes of: engaging with the maritime construction and shipping industry; requesting that the industry provide information on potential temporary and interim solutions for icebreaking and emergency towing vessels for the CCG’s operations; and seeking views about the potential lease of two offshore tow capable vessels (the “Towing Vessels”) to meet those needs.

[8]  RFI A closed on February 27, 2017. PWGSC indicated in the present proceedings that “[t]he availability and features of the vessels proposed by industry members during the RFI A process were considered along with independent research conducted by CCG and regional operational requirements as it developed the draft baseline requirements for the Towing Vessels.” [6]

[9]  On July 28, 2017, PWGSC started a second Request for Information process (solicitation No. F7017-160056/B) (“RFI B”). The purpose of RFI B was to solicit comments and feedback from the industry and potential bidders concerning the draft solicitation documents for CCG’s ETV requirement. RFI B was amended eight times before it closed on January 24, 2018.

[10]  Heiltsuk Horizon and ATL participated in both the RFI A and RFI B processes. While RFI A and RFI B are not the subject matter of the present inquiry, certain aspects of those processes are relevant to the specific allegations made by Heiltsuk Horizon in relation to the RFP, as will be discussed further below.

The RFP process

[11]  On February 5, 2018, PWGSC issued the RFP at issue in this complaint.

[12]  Initially, the RFP was to have closed on March 20, 2018. PWGSC received more than 150 questions and comments at the outset of the solicitation process. As a result, it amended the terms of the RFP 14 times. Amendment No. 008, issued on March 15, 2018, is relevant in the present inquiry insofar as it amended MR 12. [7]

[13]  PWGSC then set a final bid closing date of April 13, 2018. Nine bids were submitted, including those of Heiltsuk Horizon and ATL. [8]

[14]  On May 24, 2018, PWGSC conducted a vessel confirmation assessment of ATL’s proposed vessels. This assessment was done in accordance with the terms of Part 4 of the RFP (evaluation procedures and basis of selection), [9] as PWGSC had deemed ATL to be the top-ranked responsive bidder in that it not only complied with the mandatory requirements, but achieved the highest responsive combined rating of technical merit (30%) and price (70%) as well. [10]

[15]  On June 13, 2018, Heiltsuk Horizon made an objection to PWGSC and other senior (elected) governmental officials regarding the vessel confirmation assessment. It alleged that it had learned of the inspection from an employee of ATL who had also disclosed to Heiltsuk Horizon the two vessels that had been offered in ATL’s bid: the Atlantic Eagle and the Atlantic Raven. Heiltsuk Horizon questioned the age of those vessels and whether they were “less than 20 years old at bid closing” as required by MR 18 of the RFP. It also expressed concerns that ATL (and/or its employee) apparently disclosed confidential information, contrary to PWGSC’s instructions to bidders. [11]

[16]  Having received no direct response, Heiltsuk Horizon made another objection to PWGSC on June 25, 2018, copying it to various senior governmental officials within the federal public service. This objection alleged, among other things, that certain mandatory requirements of the RFP (namely, MR 18) had been structured to accommodate ATL’s offered vessels and that those vessels were, nevertheless, incapable of meeting MR 12 (the minimum bollard pull requirement).

[17]  Between June 26 and July 16, 2018, Heiltsuk Horizon communicated with a senior governmental official who assured it that its concerns had been relayed to PWGSC and the CCG. On July 24 and 25, 2018, the contracting authority and Heiltsuk Horizon exchanged correspondence regarding the Heiltsuk Nation’s relationship with Horizon Maritime Services Ltd.

[18]  On August 9, 2018, PWGSC notified Heiltsuk Horizon that a contract had been awarded to ATL. PWGSC indicated that while Heiltsuk Horizon’s bid had been found to be compliant with the mandatory requirements of the RFP, it did not achieve the highest ranking under the evaluation methodology described in the RFP. [12] That same day, PWGSC contacted a representative of Heiltsuk Horizon to offer an in-person debriefing. Heiltsuk Horizon proposed dates for a debriefing; however, it submitted that “[t]o date, no debriefing has been held nor confirmed.” [13]

The complaint proceedings

[19]  On August 20, 2018, Heiltsuk Horizon filed its complaint with the Tribunal.

[20]  On August 27, 2018, the Tribunal informed the parties that it had accepted the complaint for inquiry.

[21]  On September 19, 2018, ATL sought leave to intervene in the proceedings. The request was granted on September 20, 2018. [14] As a result of the intervener’s participation, the Tribunal extended the deadline for the issuance of its determination on the validity of the complaint to 135 days, pursuant to section 12 of the Regulations.

[22]  On September 21, 2018, Canship Ugland Ltd. (Canship), an unsuccessful bidder in the solicitation process, sought leave to intervene in these proceedings. The Tribunal requested, and the parties filed, comments on the request between September 27 and October 1, 2018. On October 4, 2018, the request was denied for reasons that will be discussed below.

[23]  In the meantime, on September 24, 2018, PWGSC filed its Government Institution Report (GIR). On September 26, 2018, the Tribunal suspended the deadline for the filing of comments on the GIR until the parties’ submissions on Canship’s intervener request were received and a decision was taken.

[24]  On September 28, 2018, Heiltsuk Horizon submitted that the GIR did not sufficiently disclose the necessary documents relevant to its complaint. As such, it requested that the Tribunal direct PWGSC to produce additional documentation, including the winning bid (i.e. ATL’s bid) and notes by the evaluation team about whether that bid met the mandatory requirements of the RFP.

[25]  The Tribunal requested the views of PWGSC and ATL; they provided their respective comments on October 5, 2018. Of note, PWGSC submitted that the evaluators’ notes would not assist the Tribunal in assessing whether ATL’s bid was compliant with the RFP in general, and MR 12 in particular. [15] PWGSC reiterated its position (as set out in the GIR) that ATL demonstrated compliance with MR 12 by including the requisite bollard pull certificates in its bid.

[26]  Heiltsuk Horizon filed its reply to those comments on October 9, 2018.

[27]  On October 11, 2018, the Tribunal directed PWGSC to disclose ATL’s complete bid and the evaluators’ individual and collective notes concerning the full evaluation of ATL’s bid.

[28]  PWGSC filed the requested documents on October 17, 2018.

[29]  ATL filed its intervener’s submission on October 24, 2018, including a supporting affidavit from Mr. G. Gagnon, General Manager of ATL.

[30]  Heiltsuk Horizon filed its comments on the GIR and on the intervener’s submission on November 13, 2018, [16] including a supporting affidavit from Mr. S. Leet, Chief Executive Officer of Horizon Maritime Services Ltd.

[31]  Upon receipt of Heiltsuk Horizon’s comments, PWGSC and ATL sought leave to file further reply submissions to what they considered to be new issues and evidence. In the case of PWGSC, the request to file further reply submissions was made in the alternative to its request that the Tribunal decline to accept Heiltsuk Horizon’s comments. In its view, Heiltsuk Horizon’s comments on the GIR contained new evidence and new allegations regarding the supposed deficiency of the bollard pull certificates that ATL submitted in response to MR 12. For PWGSC, such evidence and allegations should have been put forward in a new complaint. Heiltsuk Horizon opposed both requests.

[32]  On November 20, 2018, the Tribunal allowed a further round of submissions, as follows: [17]

Having considered the above requests and related correspondence, the Tribunal has decided to allow a further round of submissions, limited to the issue of whether PWGSC erred in concluding that ATL’s bid was compliant with mandatory technical requirement MR 12 of the solicitation. In the Tribunal’s view, to the extent that the complainant’s comments on the GIR provided arguments and evidence relating to the bollard pull certificates that were submitted in ATL’s bid in response to mandatory requirement MR 12, and PWGSC’s evaluation thereof, those arguments and evidence fall within the scope of this inquiry. Furthermore, the contents of ATL’s bid and the relevant notes of the evaluators had only been disclosed by PWGSC to the complainant in these proceedings on October 17, 2018 and, as such, could not have been reasonably addressed in the complaint.

[33]  On November 26, 2018, PWGSC filed a further submission including a supporting affidavit from Mr. H. Legros, Project Manager with the CCG. ATL also filed a further submission with supporting affidavits from Mr. S. Wight, Vessel Superintendent at ATL, and Mr. D. Vyselaar, Director of Technology & Development at ATL.

[34]  In its final reply submission of November 27, 2018, Heiltsuk Horizon included supporting affidavits from Mr. J. Trainor, a certified Chief Engineer; Mr. A. Myers, a certified Master Mariner; and Mr. D. Boyd, a certified First Class Chief Engineer.

[35]  The Tribunal did not consider an oral hearing necessary and therefore made its determination based on the written record.

PRELIMINARY MATTER

The intervener request from Canship Ugland Ltd.

[36]  As noted above, Canship sought intervener status in these proceedings in order to address “what it deem[ed] actions on behalf of the evaluation team which [were] contrary to an open solicitation process regarding [the RFP].” [18] Canship alleged that the evaluation team made four errors when assessing its bid against MR 13, MR 16, MR 24, MR 26. In its view, the bid evaluation process of those requirements was flawed and not carried out in a fair manner.

[37]  Heiltsuk Horizon consented to Canship’s request, while PWGSC and ATL were opposed.

[38]  On October 4, 2018, the Tribunal denied Canship’s request on the basis of subsection 30.14(1) and section 30.17 of the CITT Act. [19] The issues raised in Canship’s request were different from the grounds of the complaint and, as such, cannot be considered by the Tribunal because they fall outside of the scope of inquiry. Furthermore, Canship did not demonstrate why it would have been in a position to assist the Tribunal in resolving issues involved in Heiltsuk Horizon’s complaint. Finally, granting intervener status on grounds outside the scope of the complaint would be inconsistent with the requirements to which potential suppliers must adhere when filing a complaint with the Tribunal within prescribed time limits and in accordance with the bid complaint process set out in the CITT Act and the Regulations.

Production of the evaluator’s notes

[39]  As noted above, PWGSC argued that the evaluators’ notes would not assist the Tribunal in assessing the issue of whether ATL’s bid was compliant with MR 12. According to PWGSC, the bollard pull certificates submitted with ATL’s bid demonstrated prima facie compliance with MR 12.

[40]  The Tribunal disagreed with PWGSC and directed it to disclose the evaluators’ notes. In so doing, the Tribunal took exception to PWGSC’s submission regarding the utility of the evaluators’ notes. Put plainly, the decision about whether those notes would be useful in the course of the Tribunal’s inquiry was not one for PWGSC to make. Instead, that decision resided solely with the Tribunal. Those notes, which are of the kind routinely provided by PWGSC in proceedings such as this, were necessary in order that the Tribunal could ensure that its inquiry was as fair and transparent as possible for all parties concerned. More importantly (and as will be demonstrated below), those notes were directly relevant to, and indeed determinative in, the Tribunal’s decision that Heiltsuk Horizon’s complaint was valid in part.

[41]  The Tribunal expects a government institution to act with candour in the context of an inquiry. Documents of the kind routinely provided in proceedings such as this should be turned over as a matter of course even if they include information that could be detrimental to the government institution’s case. The public’s confidence in the integrity and efficiency of the procurement process and in the effectiveness of the oversight provided by the Tribunal as the bid challenge authority depends on it.

ANALYSIS

[42]  The Tribunal’s role in an inquiry such as this is to determine whether the subject matter of the complaint is valid on the basis of whether the procedures and other requirements prescribed in respect of the designated contract have been observed in a manner consistent with the applicable trade agreements, which in this case includes the Canadian Free Trade Agreement (CFTA). [20]

[43]  Under Article 509 of the CFTA, a procuring entity is prohibited from adopting or applying any technical specification that creates unnecessary obstacles to trade, and must provide potential suppliers with all information necessary to permit them to prepare and submit responsive bids, including the criteria which will be used for evaluating and awarding the contract. [21] Article 515 requires that upon submission, a bid must comply with the essential requirements set out in the tender documentation to be considered for an award. [22] Article 515 further requires the procuring entity to treat all bids fairly and impartially during the procurement process, [23] and award contracts in accordance with, and solely based upon, the criteria and essential requirements specified in the tender documentation. [24]

[44]  Using these provisions as the framework for its analysis, the Tribunal will determine the validity of the two grounds of complaint by considering whether (1) it was reasonable for PWGSC to conclude that ATL’s bid was compliant with MR 12; and (2) PWGSC demonstrated a bias towards ATL during the solicitation process.

Was it reasonable for PWGSC to conclude that ATL’s bid was compliant with MR 12?

[45]  When considering the manner in which bids are evaluated, the Tribunal applies the standard of reasonableness. As the Supreme Court of Canada has repeatedly underlined, “. . . reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision‑making process.” [25]  As a result, the Tribunal does not generally substitute its judgments for that of the evaluators, unless the evaluators have not applied themselves in evaluating a bidder’s proposal, have ignored vital information provided in a proposal, have based their information on undisclosed criteria or have otherwise not conducted the evaluation in a procedurally fair way. [26]

[46]  In addition, the Tribunal has consistently held that bidders bear the onus of demonstrating that their bids meet the mandatory criteria of a solicitation at the time of bid closing. [27] Moreover, bidders cannot make material corrections, changes or additions to the information submitted in their bids after the bid closing date, in accordance with the rule against bid repair. [28]

[47]  The Tribunal has also made it clear that bidders bear the responsibility of preparing their bids diligently in accordance with the instructions in the solicitation, taking care to ensure that the information provided clearly demonstrates compliance. [29] Put another way, bidders must carefully and explicitly “connect the dots” for evaluators, drawing together details and specifications that may be included in various places throughout a bid when demonstrating why and how it satisfies the solicitation’s mandatory and technical requirements. This is especially true for large and complex bids like those submitted in the solicitation at hand.

MR 12

[48]  MR 12 indicated that “[t]he Bidder’s vessels must exert a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account.”

[49]  The assessment methodology for MR 12 stated as follows in the original RFP:

The Bidder must provide a certificate of compliance (independently verified) or bollard test output data (in accordance with MSC/Circ 884 section 11.1) less than 10 years old.

[50]  As noted above, PWGSC issued Amendment No. 008 to the RFP following a question from an anonymous bidder. The question, and subsequent answer from PWGSC, stated as follows:

Question #127: Amendment No. 008 MR 12 – Bollard Pull capability. The pull capability of a vessel in generally tested and certified at a variety of intervals depending upon the vessel and does not consistently expire at 10 years so this may be unfair to certain Bidders. To this point, many perfectly capable vessels may not have a certification that was performed within the last 10 years and it may not be feasible to have one provided in such short timeframes (by bid closing) causing some perfectly capable vessels to become non-compliant and the Bidder unable to respond to this RFP. Would the Crown consider revising this requirement to within last 15 years, or alternatively to changing the requirement to require that a compliance statement must be made that this criterion would be met by mobilization (similar to MR 5 through MR 9 requirements)?

Answer to question #127: Canada has re-assessed MR-12 and this evaluation criteria will be amended accordingly. Please also refer to modification #34 to this solicitation amendment 008.

[Emphasis added]

[51]  Amendment No. 008 changed the assessment methodology for MR 12, but left the mandatory requirement of MR 12 intact. The revised assessment methodology read as follows: [30]

The Bidder must provide a certificate of compliance (independently verified) or bollard test output data (in accordance with MSC/Circ 884 section 11.1) less than 10 years old that demonstrates a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account.

As per “Noble Denton Marine Services - Certification for Towing Vessel Approvability (DNVGL‑SE0122), edition March, 2017”, in instances where a certificate of continuous bollard pull, less than 10 years old cannot be produced, then for tugs less than 10 years old, bollard pull may be estimated as 1 tonne/100 (certified) BHP of the main engines and for tugs over 10 years old, with a bollard pull certificate greater than 10 years old, Bollard Pull may be accepted as the greater of: — the certified value reduced by 1% per year of age since the BP test, or — 1 tonne/100 (certified) BHP of the main engines reduced by 1% per year of age greater than 10.

[Emphasis added]

[52]  Accordingly, the assessment methodologies for bidders to demonstrate compliance with MR 12 included the following: (a) an independently verified bollard pull certificate of compliance less than 10 years old or (b) test output data less than 10 years old. Amendment No. 008 introduced two additional alternative methodologies in cases where (c) the vessel was less than 10 years old but a bollard pull certificate less than 10 years old could not be produced, or (d) the vessel was greater than 10 years old with a bollard pull certificate greater than 10 years old. Regardless of the assessment methodology used, it was clear on the face of the terms of the RFP and Amendment No. 008 that bidders had to demonstrate that their vessels met the MR 12 requirement for vessels that exert a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account.

[53]  As will be discussed further below, the methodologies (c) and (d) do not apply to ATL’s bid, as it offered two vessels greater than 10 years old with bollard pull certificates less than 10 years old, in accordance with assessment methodology (a).

–  Positions of parties

[54]  Heiltsuk Horizon alleged that ATL’s proposed vessels were incapable of meeting a minimum continuous bollard pull of no less than 120 tonnes when all required engine-driven consumers (shaft generators, etc.) were taken into account. In its initial objections and complaint, Heiltsuk Horizon based this allegation on publicly available information and specifications about ATL’s two vessels; it used said information and specifications to calculate their respective bollard pull at less than 100 tonnes each.

[55]  Following the production of ATL’s confidential bid, Heiltsuk Horizon submitted that even though ATL’s response to MR 12 indicated bollard pulls for each vessel of more than 120 tonnes, those figures were non-compliant as they did not account for “all required engine driven consumers” as per the text of MR 12 and assessment methodology (a). Heiltsuk Horizon argued that neither ATL’s bid nor the GIR included an explanation as to where or how the certificates of compliance demonstrated that the engine‑driven consumers were taken into account. [31] It submitted that the wording on the certificates shows that the tests were not configured to account for engine-driven consumers, as the subject tests were conducted with 100 percent of the engines’ maximum power. Consequently, no deduction was made for consumers such as shaft generators. Using the Atlantic Eagle’s Certificate to make its point, Heiltsuk Horizon stated the following: [32]

69. . . . [t]he “Propulsion Engine Power” used for the test was the same as the engines’ total maximum power, i.e. 10,600 kW. The Propulsion Engine Power, as defined on the face of the certificate, is the power that actually drives the propellers: . . .

70. In other words, the “Propulsion Engine Power” shows the reader [of the certificate] how much power was actually driving the propellers, and conversely how much power was “deducted” on account of engine driven consumers, if any, which in this case is clearly none.

[Underlining in original]

[56]  PWGSC and ATL put forward similar positions in response. [33] Essentially, they argued that Heiltsuk Horizon’s complaint was without merit, and deemed its allegations regarding ATL’s compliance with MR 12 to be bald, speculative and unsupported by evidence. They maintained that ATL demonstrated compliance by including in its bid bollard pull certificates for each proposed vessel: certificates issued by Det Norske Veritas (DNV) in 2013 (i.e. less than 10 years old) that confirmed that both vessels had bollard pull capability well in excess of the 120 tonne requirement. According to PWGSC, the RFP did not require it to “look behind the certificate[s] to test [their] validity or authenticity or to test the validity or accuracy of the minimum bollard pull reflected on the certificate[s]”. [34]

[57]  ATL noted that DNV’s testing procedures for both vessels were undertaken in live sea trials in keeping with widely acceptable industry standards and according to guidelines set by the Maritime Safety Committee: standards and guidelines which indicate that “pumps, generators and other equipment which are driven from the main engine(s) or propeller shaft(s) in normal operation of the vessel shall be connected during the test.” [35] In its sur-reply of November 26, 2018, ATL went much further. It noted that both vessels have “auxiliary generators that power normal operations when the propulsion engine is fully engaged”. [36] In his affidavit, Mr. Vysellaar explained that these auxiliary power sources operate independently of, and are not powered by, the propulsion engine (i.e. they are not “shaft generators”). He highlighted that they are additional power sources that can be simultaneously operated independently from the main propulsion engines for normal operations. [37]

[58]  Mr. Vyselaar also gave his view as to why the certificates listed the same values for “engine power” and “propulsion engine power” in response to Heiltsuk Horizon’s allegations. In his view, there was no need to deduct any amount of power from “engine power” in light of the not insignificant 350-370 kW of power from each vessel’s auxiliary power generators. He maintained that there were no “required engine driven consumers” that needed to be deducted because both of ATL’s vessels had auxiliary generators that power other consumers during normal operations. [38] He noted that Attachment 8 to ATL’s bid referenced these auxiliary power generators. [39] He went on to explain how ATL’s vessels were compliant with other assessment methodologies of MR 12. [40]

–  Tribunal’s analysis

[59]  Evidence before the Tribunal indicates that in response to MR 12, ATL’s bid included a brief (three-sentence) statement to note that each of its proposed vessels exerted a minimum continuous bollard pull of no less than 120 tonnes when all required engine-driven consumers (shaft generators, etc.) were considered, as demonstrated through independently verified DNV certificates. [41] The certificates included with the bid were issued in 2013 and state that both vessels have continuous bollard pulls greater than 120 tonnes: 158.00 tonnes for the Atlantic Eagle and 162.60 tonnes for the Atlantic Raven. [42] Both certificates also state a propulsion engine power of 10,600 kW for the Atlantic Eagle and 10,738 kW for the Atlantic Raven, with a note that “[t]he propulsion engine power is the sum of actual engine power driving propellers” and that “[c]ombustion engines for mechanical propulsion deducted any PTO power, electrical motors on propulsion thruster, electrical motors for PTI, etc.”

[60]  However, neither certificate on their face make deductions for engine-driven consumers, as demonstrated by the fact that the values for “engine power” and “propulsion engine power” are the same. Indeed, ATL did not dispute the fact that no deductions were made for engine-driven consumers in the certificates. As indicated above, it relied instead on Mr. Vyselaar’s statement that there was no need to make such deductions for the vessels in question because they were equipped with auxiliary generators that could power other consumers required for normal operations. [43] As will be discussed below, this information was not expressly stated in ATL’s bid.

[61]  Evidence also indicates that according to the consensus evaluation sheets, the evaluation team concluded that ATL’s bid met the MR 12 requirement on the basis of the five-year-old bollard pull certificates (i.e. according to assessment methodology (a)). Nevertheless, evidence also reveals that the hand-written evaluation notes of each individual member of the team tell a different story. All of the evaluators checked the “yes” column in regard to whether ATL’s bid met MR 12. One evaluator, however, noted their assumption that all engine-driven consumers were considered even though this was not stated on ATL’s certificates. [44] That same evaluator then noted some of their own calculations of bollard pull for both vessels: a point that is not addressed in any of the parties’ submissions.

[62]  In this, the Tribunal finds that the one evaluator chose to concur with the rest of the evaluation team and take it for granted that ATL’s bid was compliant with MR 12 in spite of the fact that there was no explicit demonstration of compliance with the terms of the RFP on the face of either certificate. Furthermore, that evaluator’s own calculations appear to have been in keeping with assessment methodology (c), which was not applicable. [45] As ATL itself acknowledged, it sought to comply with MR 12 on the basis of assessment methodology (a) only; “ATL did not seek to comply with MR 12 based on [the] alternative means of compliance and was not evaluated as such.” [46]

[63]  To be sure, assessment methodology (a) of MR 12 allowed bidders to submit certificates that were dated up to ten years before the RFP was ever tendered. As such, it stands to reason that the certificates would not necessarily have been based on testing procedures for compliance with the stated criteria of MR 12, or that would explicitly use the specific language set out in MR 12, as they would have been provided to bidders under different circumstances and for different needs. For example, in his affidavit of November 23, 2018, Mr. Wight noted that the bollard testing for ATL’s vessels was undertaken and certified in 2013 at the request of Suncor (a customer of ATL) for the provision of offshore towing services. [47]

[64]  In the Tribunal’s view, this seriously undermines PWGSC’s argument that it was for the certifying body to determine what power-driven consumers were required to ensure that a particular vessel could meet the bollard pull requirement under MR 12. [48] Those certifying bodies would not (or could not) have had any reference point to use for the solicitation at hand. While MR 12 did not specify a list of power-driven consumers that had to be considered and deducted from the rated bollard pull, this is beside the point. [49] Compliance with MR 12 required, on the face of the requirement itself, a demonstration of the minimum bollard pull, taking into account all required power-driven consumers for a particular vessel. The parties’ submissions and evidence strongly indicate a common understanding that the use of the term “required” in MR 12 means the power-driven consumers required “for normal operations” of emergency towing vessels. [50]

[65]  Furthermore, the bid preparation instructions in Section 3.2 of the RFP state that “[t]he technical bid must address clearly and in sufficient depth the points that are subject to the evaluation criteria against which the bid will be evaluated,” and that “[s]imply repeating the statement contained in the bid solicitation is not sufficient” [emphasis added]. The instructions also require that “[b]idders must demonstrate their capability in a thorough, concise and clear manner for carrying out the work.”

[66]  Consequently, it was incumbent on ATL to demonstrate in its bid how its vessels and the accompanying certificates met the stated mandatory requirements. In particular, it should have identified how the auxiliary generators factored into the compliance of its vessels with MR 12, i.e. in order to demonstrate that “all required engine driven consumers (shaft generators, etc.) were taken into account.” If no engine-driven consumers were required for these particular vessels, this should have been stated explicitly in its bid and/or the certificates submitted in response to MR 12. [51]

[67]  Assuming that evaluators would “connect the dots” between just three short sentences about MR 12, two certificates of compliance and information regarding auxiliary power generators in 1 of 72 attachments in a 3,298-page bid is simply not enough. [52] This is clear by virtue of the one evaluation team member’s handwritten note: a note the Tribunal cannot overlook when considering whether it was reasonable for the evaluation team to conclude that ATL’s bid was compliant with MR 12. The more detailed, contextual information about the testing and role of the auxiliary power generators in the affidavits of Mr. Vyselaar and Mr. Wight would have been helpful, had it been included in ATL’s bid in response to MR 12, [53] but said information was only provided after the fact and well into the course of this inquiry. [54] Had even some of it been provided in the few sentences in ATL’s bid in response to MR 12, the Tribunal might have reached a different conclusion about the validity of Heiltsuk Horizon’s complaint.

[68]  Likewise, while the Tribunal certainly defers to the expertise of the evaluation team as the standard of reasonableness requires, it finds no evidence that the evaluation team applied itself to consider the issue raised in the one member’s handwritten note, i.e. that ATL’s bid, on its face, did not address the engine‑driven consumer requirement. Assumptions during an evaluation process are not a means by which PWGSC can provide “justification, transparency and intelligibility within a decision-making process”. [55] Indeed, there was not even a mention of the handwritten note in any of PWGSC’s submissions. The Tribunal finds this troubling, to say the least, especially in light of the fact that Heiltsuk Horizon made repeated mention of this note and that PWGSC argued that there would be no utility in providing the evaluation team’s notes to the Tribunal, as noted above.

[69]  In light of the above, the Tribunal finds that it was unreasonable for PWGSC to conclude that ATL’s bid, on its face, satisfied MR 12.

Did PWGSC demonstrate a bias towards ATL during the solicitation process?

Positions of parties

[70]  With respect to the allegation that the solicitation process and award of contract was biased in favour of ATL, Heiltsuk Horizon relied on a post made by an employee of ATL on LinkedIn (a social media site) on or around August 11, 2018. According to the post, “for more than two years a project team at Atlantic Towing has been working on the Emergency Towing tender . . . a complex procurement with many (many) long days.” [56] Heiltsuk Horizon interpreted that post to mean that ATL had been working in consultation with the Government of Canada before the process that led to the RFP began. In other words, Heiltsuk Horizon suggested that ATL had been working with PWGSC for “many months” prior to any industry notification of the solicitation at hand. [57] Heiltsuk Horizon also relied on the fact that the vessel age requirement, MR 18, had been amended from 15 to 20 years between RFIs A and B and the issuance of the RFP as evidence of the manner in which PWGSC allegedly favoured ATL throughout the procurement process. [58]

[71]  For their parts, PWGSC and ATL denied that any favourable treatment had been given to any party.

Tribunal’s analysis

[72]  It is well established that a duty of fairness applies to the tendering process for federal government procurement contracts. [59] As held by the Federal Court of Appeal in Cougar Aviation, [60] this duty of fairness includes a duty of impartiality on the part of the decision-maker. [61] As previously noted by the Tribunal, “the law normally only requires a litigant to establish a reasonable apprehension of bias in order to impugn the validity of administrative action to which a duty of fairness applies, such that a decision may be set aside.” [62] As was stated in Cougar Aviation, “[a]n insistence on this more demanding standard serves to enhance public confidence in, and thus the legitimacy of, public decision-making.” [63]

[73]  In order to determine whether a reasonable apprehension of bias exists, the Tribunal considers the following test, as set out by the Supreme Court of Canada in Bell Canada v. Canadian Telephone Employees Association: [64]

[W]hat would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude. Would he think that it is more likely than not that [the individual], whether consciously or unconsciously, would not decide fairly.

[74]  The Tribunal also notes that what constitutes a reasonable apprehension of bias will vary depending on the unique facts and circumstances of any given case. [65] As with any ground of complaint, there must be some evidentiary basis in support of such allegation. [66] Moreover, the Tribunal generally “presumes the good faith and honesty both of the bidders and of the public servants mandated to evaluate their bid”. [67]

[75]  On this basis, the Tribunal will determine the validity of this ground of Heiltsuk Horizon’s complaint by considering:

1. whether the social media post reasonably indicates that private consultations regarding the requirement occurred between PWGSC and ATL before the commencement of the public consultation phase of RFIs A and B; and
2. whether there is a reasonable indication that PWGSC structured MR 18 of the RFP in a biased manner in consultation with and/or in favour of a particular potential supplier to the exclusion of others.

[76]  In regard to the social media post, the Tribunal notes that there was nothing incriminating in the language used by the employee of ATL. Social media posts are made for public consumption and the language used is very rarely precise. In this case, the Tribunal finds that the post simply refers, in general terms, to the timeframe of approximately two years between the release of RFI A and the contract award. As PWGSC noted in the GIR, any and all consultations with industry members, including Heiltsuk Horizon and ATL, began with the release of RFI A on November 17, 2016. [68] There is simply no evidence on the record to suggest otherwise. Furthermore, the Tribunal does not consider a single social media post to be sufficient evidence, or to have the requisite probative value, to support a finding such as the one requested by Heiltsuk Horizon.

[77]  Turning to the issue of MR 18, when dealing with similar complaints about allegedly biased technical requirements, the Tribunal has found that a government institution is entitled to define its legitimate operational requirements and to reflect them in the technical requirements of the solicitation, as long as these are reasonable, i.e. not impossible to meet. [69] In addition, a complainant bears the onus to present positive evidence that the government institution structured the terms of the RFP, such as technical requirements or specifications, with the purpose or effect of favouring (or excluding) a particular supplier (or suppliers). [70] In this case, Heiltsuk Horizon did not meet its burden.

[78]  Heiltsuk Horizon did not present the Tribunal with evidence that the terms of the RFP were structured in such a way that they reasonably appeared to favour ATL’s bid or exclude other potential suppliers. PWGSC acknowledged that it received recommendations regarding vessel age from ATL and another potential bidder. [71] It used those recommendations and a review of existing literature to broaden the maximum vessel age requirement MR 18 from 15 years in RFI B to 20 years in the RFP, thereby allowing for greater competition as opposed to lessening it. [72] Evidence indicates that three of the nine bids received put forward vessels over 15 years old. [73]

[79]  The Tribunal, thus, finds no reasonable apprehension of bias in favour of ATL in either the structure of the RFP or the manner in which it was applied during the evaluation.

Conclusion

[80]  In light of the foregoing, pursuant to subsection 30.14(2) of the CITT Act, the Tribunal concludes that the complaint is valid in part.

REMEDY

[81]  Having found Heiltsuk Horizon’s complaint to be valid in part, the Tribunal must determine the appropriate remedy, in accordance with subsections 30.15(2) to (4) of the CITT Act.

[82]  Heiltsuk Horizon requested that the contract awarded to ATL be terminated and that it be awarded a new contract. In the alternative, Heiltsuk Horizon sought compensation for its lost profits or lost opportunity.

[83]  PWGSC noted that should the Tribunal find the complaint to be valid, Heiltsuk Horizon’s bid was not only the lowest ranked, but also the most expensive, among the compliant bids. [74]

[84]  To recommend a remedy, the Tribunal must consider all the circumstances relevant to the procurement in question, including the following:

1. the seriousness of the deficiencies found;
2. the degree to which the complainant and all other interested parties were prejudiced;
3. the degree to which the integrity and efficiency of the competitive procurement system was prejudiced;
4. whether the parties acted in good faith; and
5. the extent to which the contract was performed.

[85]  In this case, the trade agreements were breached when PWGSC unreasonably concluded that ATL’s bid was compliant with MR 12. As indicated above, the Tribunal finds that the evaluation team did not apply itself when considering how ATL’s bollard pull certificates demonstrated that “all required engine driven consumers were taken into account”, especially in light of the fact that it was not clear on the face of the certificates or in ATL’s bid, as acknowledged in the notes of one member of the evaluation team. In short, the evaluation team took it for granted, or assumed, that ATL’s certificates demonstrated compliance.

[86]  The Tribunal looked at dictionary definitions of the word “application” to consider whether the evaluation team reasonably “applied themselves” when evaluating ATL’s bid. The Merriam-Webster dictionary defines application as “an act of applying: . . . (c) assiduous attention . . . ”. [75] In turn, it defines “assiduous” as “showing great care, attention and effort: marked by careful unremitting attention . . .”. [76] Put into the context of this case, the evaluation team did none of these things by assuming that “all required engine driven consumers were taken into account.”

[87]  As discussed above, it was clear on the face of the terms of the RFP and Amendment No. 008 that in order to satisfy the requirements of MR 12, bidders had to demonstrate that their vessels exerted a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account. In applying the stated assessment methodologies for MR 12, it was incumbent on the evaluators to ensure that the requirements of MR 12 were satisfied. That did not occur in this case, as the evaluators did not apply the full extent of the stated requirements in MR 12 during the evaluation process.

[88]  That this was done via an assumption is not only a serious breach of the trade agreements, but a serious deficiency as well. While there is no evidence of bad faith on the part of PWGSC in the evaluation process, the fact that it not only objected to the production of the evaluator’s notes, but also argued that the notes would not assist the Tribunal in its inquiry, compounds the seriousness of the deficiency all the more. Transparency, fairness and due diligence on the part of evaluators are at the heart of the scheme established under the CITT Act and the applicable trade agreements.

[89]  However, given that Heiltsuk Horizon’s bid was not only the lowest ranked, but also the most expensive, among the compliant bids, Heiltsuk Horizon may not have been prejudiced by this breach. Nevertheless, the Tribunal cannot conclude this on the basis of the evidence; the evaluation team may have made similar assumptions for other higher-ranked compliant bidders. Therefore, the Tribunal concludes that the breach had a negative impact on the integrity and efficiency of the procurement process as a whole. [77]

[90]  In light of the above, the Tribunal recommends that PWGSC re-evaluate MR 12 of the RFP for all of the bids received prior to bid closing, as soon as practicable and no later than within six months of the issuance of this determination. The Tribunal recommends that the current designated contract remain with ATL until the completion of the re-evaluation. That said, the Tribunal recommends that no further expenditure under the contract be undertaken by PWGSC pending the re-evaluation.

[91]  In the event that PWGSC’s re-evaluation finds that a bidder other than ATL submitted the top‑ranked responsive bid, the Tribunal recommends that PWGSC terminate the current designated contract with ATL and award a new contract to the new top-ranked responsive bidder.

[92]  If the new top-ranked responsive bidder is Heiltsuk Horizon, the Tribunal recommends that PWGSC compensate Heiltsuk Horizon for the profit, if any, that it would have earned had it been awarded the contract, for the period from the award of contract to ATL until a new contract is awarded to Heiltsuk Horizon. If, for operational reasons, PWGSC considers that it is not feasible to terminate the contract with ATL and award a new contract to Heiltsuk Horizon, the Tribunal recommends that PWGSC compensate Heiltsuk Horizon for its lost profit.

COSTS

[93]  Pursuant to section 30.16 of the CITT Act, the Tribunal may award costs of, and incidental to, any procurement complaint proceedings. [78]

[94]  In determining the amount of cost award for this complaint, the Tribunal considered its Procurement Costs Guideline (the Guideline), which contemplates classification of the level of complexity of cases on the basis of three criteria: the complexity of the procurement, the complexity of the complaint and the complexity of the complaint proceedings.

[95]  In this case, the procurement, complaint and proceedings were unusually complex by virtue of the size and scale of the solicitation process. The RFP itself totalled some 300 pages, plus 14 amendments addressing 157 questions from potential bidders. Each bid submitted by Heiltsuk Horizon and ATL, respectively, consisted of thousands of pages of detailed information and technical specifications. The entire record of the proceedings amounted to 9,553 pages. A full two rounds of submissions were required instead of the usual one. Those submissions were augmented by a total of eight sworn affidavits. Moreover, the Tribunal had to deal with requests for additional documents and numerous rounds of correspondence with and between the parties.

[96]  As such, and given that the complaint is valid in part, the Tribunal awards Heiltsuk Horizon its reasonable costs incurred in preparing and proceeding with this complaint. Given the level of complexity of these proceedings and the complaint, the Tribunal finds that this case warrants a departure from the Guideline.

DETERMINATION

[97]  Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is valid in part.

[98]  Pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends that PWGSC re-evaluate MR 12 of the RFP for all of the bids received prior to bid closing, as soon as practicable and no later than within six months of the issuance of this determination. The Tribunal recommends that the current designated contract remain with the winning bidder, ATL, until the completion of the re-evaluation. However, the Tribunal recommends that no further expenditure under the contract be undertaken by PWGSC pending the re-evaluation.

[99]  In the event that PWGSC’s re-evaluation finds that a bidder other than ATL submitted the top‑ranked responsive bid, the Tribunal recommends that PWGSC terminate the current designated contract with ATL and award a new contract to the new top-ranked responsive bidder.

[100]  If the new top-ranked responsive bidder is Heiltsuk Horizon, the Tribunal recommends that:

• PWGSC compensate Heiltsuk Horizon for the profit, if any, that it would have earned had it been awarded the contract, for the period from the award of contract to ATL until a new contract is awarded to Heiltsuk Horizon.
• if, for operational reasons, PWGSC considers that it is not feasible to terminate the contract with ATL and award a new contract to Heiltsuk Horizon, PWGSC compensate Heiltsuk Horizon for its lost profit.
• Heiltsuk Horizon and PWGSC negotiate the amount of compensation to be paid for lost profit, and report the outcome of the negotiations to the Tribunal within 30 days from the date of Heiltsuk Horizon receiving notice of the results of the re-evaluation.
• should the parties be unable to agree on the amount of compensation, Heiltsuk Horizon file with the Tribunal, within 40 days from the date of receiving notice of the results of the re‑evaluation, a submission on the issue of compensation. PWGSC will then have seven working days after the receipt of Heiltsuk Horizon’s submission to file a response. Heiltsuk Horizon will then have five working days after the receipt of PWGSC’s submission to file any additional comments. Counsel are required to serve each other and file with the Tribunal simultaneously. Subsequent to these submissions, the Tribunal will issue an order with a recommendation on the quantum of compensation.

[101]  Pursuant to section 30.16 of the CITT Act, the Tribunal awards Heiltsuk Horizon its reasonable costs incurred in preparing and proceeding with this complaint, which costs are to be paid by PWGSC. The Tribunal finds that this case warrants deviation from the Guideline due to the exceptional level of complexity of these proceedings and the complaint. The Tribunal retains jurisdiction to establish the final amount of the cost award and will inform the parties of the schedule for submissions on costs at a later date.

 

APPENDICES

APPENDIX I: GROUNDS OF HEILTSUK HORIZON’S COMPLAINT [79]

1. The Contracting Authority breached its duty, under statute and at common law, to conduct a fair competition/solicitation by:

1.1 Preparing, designing, amending and otherwise structuring the specifications and terms of the Solicitation to pre-determine and/or unduly favour of the Successful Bidder, namely by engaging in closed consultations with the Successful Bidder prior to August, 2016, as evidenced by a social media announcement published by the Successful Bidder and its employees following the award of the Contract to the Successful Bidder such date of consultations between the Contracting Authority and the Successful Bidder taking place well in advance of:

i. the Solicitation;

ii. any other open consultation with industry, including related Letter of Interest / Request for Information tender processes earliest of which was issued on November 17, 2016; and

iii. Prime Minister Justin Trudeau’s first announcement of the Oceans Protection Plan on November 7, 2016, such announcement providing the first reference to a requirement by the CCG for ETVs.

1.2 Preparing, designing, amending and otherwise structuring the specifications and terms of the Solicitation to pre-determine or unduly favour the Successful Bidder, namely by:

i. preparing, designing, amending and otherwise structuring mandatory requirements related to vessel age; and

ii. choosing not to apply the mandatory assessment methodology in relation to vessel’s continuous bollard pull, so as to ensure such specifications and terms of the Solicitation met the specifications of the Successful Bidder’s vessels and equipment.

2. The Contracting Authority breached its duty, under statute and at common law, to reject non-compliant tenders by:

2.1 Awarding a three-year contract worth $67.013,720.00 (including taxes) to the Successful Bidder for the lease of two ETVs that fail to meet the mandatory requirements under the Solicitation, and specifically the mandatory requirements related to the continuous bollard pull of the vessels; and

2.2 Failing to investigate the Successful Bidder’s non-compliance with the above-mentioned mandatory requirement, even after such non-compliance was reported to the contracting authority by the Complainant.

APPENDIX II: RELEVANT TERMS OF THE RFP [80]

PART 1 – GENERAL INFORMATION

1.2 Summary

a) This bid solicitation is being issued to satisfy the requirement of the Canadian Coast Guard (CCG) (the “Client”) for two Emergency Towing Vessels. It is intended to result in the award of a single contract for 3 years of services commencing on Inspection and Acceptance by the Client of the first available vessel plus 7 one-year irrevocable options allowing Canada to extend the term of the contract.

. . .

c) The requirement is subject to the provisions of the World Trade Organization Agreement on Government Procurement (WTO-AGP), the North American Free Trade Agreement (NAFTA), the Canada-Chile Free Trade Agreement (CCFTA), the Canada-Peru Free Trade Agreement (CPFTA), the Canada-Colombia Free Trade Agreement (CColFTA), the Canada-Panama Free Trade Agreement (CPanFTA) if it is in force, the Canadian Free Trade Agreement (CFTA) and The Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

. . .

PART 3 – BID PREPARATION INSTRUCTIONS

3. Section I: Technical Bid

a) In their technical bid, Bidders should demonstrate their understanding of the requirements contained in the bid solicitation and explain how they will meet these requirements. Bidders must demonstrate their capability in a thorough, concise and clear manner for carrying out the work.

b) The technical bid must address clearly and in sufficient depth the points that are subject to the evaluation criteria against which the bid will be evaluated. Simply repeating the statement contained in the bid solicitation is not sufficient. In order to facilitate the evaluation of the bid, Canada requests that Bidders address and present topics in the order of the evaluation criteria under the same headings. To avoid duplication, Bidders may refer to different sections of their bids by identifying the specific paragraph and page number where the subject topic has already been addressed.

. . .

PART 4 – EVALUATION PROCEDURES AND BASIS OF SELECTION

4.1 Evaluation Procedures

a) Bids will be assessed in accordance with the entire requirement of the bid solicitation including the technical and financial evaluation criteria. There are several steps in the evaluation process, which are described below. Even though the evaluation and selection will be conducted in steps, the fact that Canada has proceeded to a later step does not mean that Canada has conclusively determined that the Bidder has successfully passed all the previous steps. Canada may conduct steps of the evaluation in parallel.

b) An evaluation team composed of representatives of the Client and PWGSC will evaluate the bids on behalf of Canada. Canada may hire any independent consultant, or use any Government resources, to evaluate any bid. Not all members of the evaluation team will necessarily participate in all aspects of the evaluation.

c) PWGSC has engaged Knowles Consultancy Services Inc. as a fairness monitor for this procurement. The fairness monitor will not be part of the evaluation team, but will observe the evaluation of the bids with respect to Canada’s adherence to the evaluation process described in this bid solicitation.

d) In addition to any other time periods established in the bid solicitation:

(i) Requests for Clarifications: If Canada seeks clarification or verification from the Bidder about its bid, the Bidder will have 2 working days (or a longer period if specified in writing by the Contracting Authority) to provide the necessary information to Canada. Failure to meet this deadline will result in the bid being declared non-responsive.

(ii) Requests for Further Information: If Canada requires additional information in order to do any of the following pursuant to the Section entitled “Conduct of Evaluation” in 2003, Standard Instructions - Goods or Services - Competitive Requirements:

A. verify any or all information provided by the Bidder in its bid; or

B. contact any or all references supplied by the Bidder (e.g., references named in the résumés of individual resources) to verify and validate any information submitted by the Bidder,

the Bidder must provide the information requested by Canada within 2 working days of a request by the Contracting Authority.

(iii) Extension of Time: If additional time is required by the Bidder, the Contracting Authority may grant an extension in his or her sole discretion.

4.2 Technical Evaluation

a) Mandatory Technical Criteria:

(i)   Each bid will be reviewed to determine whether it meets the mandatory requirements of the bid solicitation. Any element of the bid solicitation identified with the words “must” or “mandatory” is a mandatory requirement. Bids that do not comply with each and every mandatory requirement will be declared non-responsive and be disqualified.

(ii)   The mandatory technical criteria are described in attachment 4.1 (Technical Evaluation – Evaluation Criteria).

b) Point-Rated Technical Criteria:

Each bid will be rated by assigning a score to the rated requirements, which are identified in the bid solicitation by the word “rated” or by reference to a score. Bidders who fail to submit complete bids with all the information requested by this bid solicitation will be rated accordingly. The point-rated technical criteria are described in attachment 4.1 (Technical Evaluation – Evaluation Criteria).The point-rated technical criteria are described in Attachment 4.1.

. . .

4.4 Ranking of the Bids

(a) The Top-Ranked Responsive bid will be determined based on the bid that has met all of the Mandatory Requirements of the bid solicitation and offers the Highest Responsive Combined Rating of Technical Merit (30%) and Price (70%).

(b) The following formula will be used to determine the Highest Responsive Combined Rating of Technical Merit and Price:

(i) Calculation of Total Technical Score: The Total Technical Score will be computed for each responsive bid by converting the Technical Score obtained for the point-rated technical criteria using the following formula, rounded to two decimal places:

Technical Score   x 30 = Total Technical Score

Maximum Technical Points indicated under Attachment 4.1.

(ii) Calculation of Total Financial Score: The Total Financial Score will be computed for each responsive bid by converting the Financial Score obtained for the financial evaluation using the following formula rounded to two decimal places:

Lowest Financial Evaluated Price  x 70 = Total Financial Score

The Bidder’s Financial Evaluated Price

(iii) Total Technical Score + Total Financial Score = Combined Rating of Technical Merit (30%) and Price (70%).

4.5 Vessels Confirmation Assessment

(a) Canada may, but will have no obligation to, require that the Top-Ranked Responsive bid (identified based on article 4.5 above) demonstrate any features, functionality and capabilities described in this bid solicitation or in its bid, in order to verify compliance with the requirements of this bid solicitation. If required, the Vessels Confirmation Assessment must be conducted, at no cost to Canada, at a location chosen by the Bidder. Canada will provide no fewer than 10 working days of notice before the scheduled date for the Vessels Confirmation Assessment. Once the Vessels Confirmation Assessment has begun, it must be completed within 3 working days. The Vessels Confirmation Assessment must be conducted during normal business hours, to be determined by the Contracting Authority.

(b) Canada will pay its own travel and salary costs associated with any Vessels Confirmation Assessment. Despite the written bid, if Canada determines during a demonstration that the Bidder’s proposed solution does not meet the mandatory requirements of this bid solicitation, the bid will be declared non-responsive. Canada may, as a result of the Vessels Confirmation Assessment, reduce the score of the Bidder on any rated requirement, if the Vessels Confirmation Assessment indicates that the score provided to the Bidder on the basis of its written bid is not validated by the Vessels Confirmation Assessment. The Bidder’s score will not be increased as a result of any demonstration. If the Bidder’s score is reduced as a result of such Vessels Confirmation Assessment, Canada will reassess the ranking of all bidders. If, as per Canada’s reassessment, the Top-Ranked Responsive Bid has changed then a new Vessels Confirmation Assessment will be performed on the next Highest Responsive Combined Rating of Technical Merit and Price bid.

4.6 Basis of Selection

(a) The Bidder who has submitted a responsive bid; has met all mandatory criteria, was successful on the Vessels Confirmation Assessment (if required by Canada) and offers the Highest Responsive Combined Rating of Technical Merit (30%) and Price (70%) will be recommended for contract award.

(b) One contract may be awarded in total as a result of this bid solicitation.

(c) Bidders should note that all contract awards are subject to Canada’s internal approvals process, which includes a requirement to approve funding in the amount of any proposed contract. Despite the fact that the Bidder may have been recommended for contract award, a contract will only be awarded if internal approval is granted according to Canada’s internal policies. If approval is not granted, no contract will be awarded.

. . .

ATTACHMENT 4.1 TO PART 4

TECHNICAL EVALUATION – EVALUATION CRITERIA

. . .

MANDATORY REQUIREMENTS

. . .

				BIDDER’S RESPONSE
CRITERIA #	…	MANDATORY REQUIREMENTS	ASSESSMENT METHODOLOGY	DEMONSTRATED EXPERIENCE (BIDDER TO INSERT DATA)	SUBMITTED REFERENCE WITH PAGE AND PARAGRAPH NUMBER
. . .
MR 12		The Bidder’s vessels must exert a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account.	The Bidder must provide a certificate of compliance (independently verified) or bollard test output data (in accordance with MSC/Circ 884 section 11.1) less than 10 years old.
. . .
MR 18		The Bidder’s vessels must be less than 20 years old at bid closing	The Bidder must provide the certification with construction date that demonstrates that the vessels are less than 20 years old at bid closing.

. . .

RFP AMENDMENT NO. 008 [81]

This Amendment number 008 is raised to (1) make modifications to the Request for Proposal (RFP) and (2) answer questions from the industry as follows:

Modifications to the RFP

…

Modification #34 - MR 12 only of Attachment 4.1 (Mandatory Requirements) is deleted in its entirety and replaced with the following:

				BIDDER’S RESPONSE
CRITERIA #	. . .	MANDATORY REQUIREMENTS	ASSESSMENT METHODOLOGY	DEMONSTRATED EXPERIENCE (BIDDER TO INSERT DATA)	SUBMITTED REFERENCE WITH PAGE AND PARAGRAPH NUMBER
. . .
MR 12		The Bidder’s vessels must exert a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account.	The Bidder must provide a certificate of compliance (independently verified) or bollard test output data (in accordance with MSC/Circ 884 section 11.1) less than 10 years old that demonstrates a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account. As per “Noble Denton Marine Services - Certification for Towing Vessel Approvability (DNVGL-SE0122), edition March, 2017”, in instances where a certificate of continuous bollard pull, less than 10 years old cannot be produced, then for tugs less than 10 years old, bollard pull may be estimated as 1 tonne/100 (certified) BHP of the main engines and for tugs over 10 years old, with a bollard pull certificate greater than 10 years old, Bollard Pull may be accepted as the greater of: — the certified value reduced by 1% per year of age since the BP test, or — 1 tonne/100 (certified) BHP of the main engines reduced by 1% per year of age greater than 10.
. . .