File No. PR-2018-032 SoftSim Technologies Inc. v. Department of National Defence

Determination and reasons issued Wednesday, December 19, 2018

 

TABLE OF CONTENTS

DETERMINATION  i

STATEMENT OF REASONS  1

SUMMARY OF COMPLAINT  1

PROCUREMENT PROCESS  1

RELEVANT PROVISIONS OF THE RFP  2

ANALYSIS  5

Position of the parties  6

Tribunal’s analysis  8

COSTS  11

DETERMINATION OF THE TRIBUNAL  11

 

IN THE MATTER OF a complaint filed by SoftSim Technologies Inc. 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
SOFTSIM TECHNOLOGIES INC.	Complainant
AND
THE DEPARTMENT OF NATIONAL DEFENCE	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 not valid.

Pursuant to section 30.16 of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards the Department of National Defence its reasonable costs incurred in responding to the complaint, which costs are to be paid by SoftSim Technologies Inc. In accordance with the Procurement Costs Guideline, the Canadian International Trade Tribunal’s preliminary indication of the level of complexity for this complaint case is Level 1, and its preliminary indication of the amount of the cost award is $1,150. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Canadian International Trade Tribunal, as contemplated in Article 4.2 of the Procurement Costs Guideline. The Canadian International Trade Tribunal reserves jurisdiction to establish the final amount of the cost award.

 

Tribunal Panel:	Jean Bédard, Presiding Member
Support Staff:	Sarah Perlman, Counsel
Complainant:	SoftSim Technologies Inc.
Government Institution:	Department of National Defence
Counsel for the Government Institution:	Susan Clarke
	Ian McLeon
	Roy Chamoun
	Kathryn Hamill

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]  On September 20, 26 and 27, 2018, SoftSim Technologies Inc. (SoftSim) filed a complaint with the Canadian International Trade Tribunal (the Tribunal) under subsection 30.11(1) of the Canadian International Trade Tribunal Act [1] regarding a Request for Proposals (RFP) (Solicitation No. W8474-19-CA21) issued by the Department of National Defence (DND) for the provision of four Level 2 network support specialists to assist the Carling Campus Project organization by participating in IT network equipment installation, IT support, receiving IT equipment, accounting for IT equipment, documentation and processes.

[2]  This complaint is the third complaint filed by SoftSim with regard to this RFP. Both Files No. PR‑2018-025 and PR-2018-026, which preceded this complaint, were deemed premature and were not accepted for inquiry by the Tribunal. In both cases, SoftSim had not yet been denied relief by DND within the meaning of subsection 6(2) of the Canadian International Trade Tribunal Procurement Inquiry Regulations. [2]

[3]  On September 28, 2018, the Tribunal decided to conduct an inquiry into the complaint, having determined that it met the requirements of subsection 30.13(1) of the CITT Act and the conditions set out in subsection 7(1) of the Regulations.

[4]  The Tribunal inquired into the complaint, as required under sections 30.13 to 30.15 of the CITT Act.

[5]  For the following reasons, the Tribunal finds that the complaint is not valid.

SUMMARY OF COMPLAINT

[6]  SoftSim alleged that the winning bidder, Maverin Inc. (Maverin), did not have access to the resources proposed in its bid and falsely certified their availability, and that it attempted to poach one of SoftSim’s employees. In addition, SoftSim submitted that one of the resources purportedly proposed by Maverin did not meet the mandatory criteria.

[7]  As a remedy, SoftSim requested that Maverin provide proof that its proposed resources were aware that their candidacy had been submitted in Maverin’s bid, that they had been contacted by Maverin, and that they were available to perform the work required in the solicitation. SoftSim also requested that Maverin’s contract be terminated for default.

PROCUREMENT PROCESS

[8]  The RFP was issued by DND on July 9, 2018, under a Task-Based Informatics Professional Services (TBIPS) Supply Arrangement (SA). The solicitation was open to prequalified suppliers that hold a TBIPS SA for Tier 1 in the National Capital Region, which included SoftSim. As per section 1.2(h) of the RFP, other bidders could request to be included in the solicitation, which Maverin did.

[9]  The solicitation closed on July 27, 2018. [3] Ten proposals were received, including those of SoftSim and Maverin All proposals received were deemed compliant.

[10]  On August 15, 2018, DND informed SoftSim that its bid was not the lowest compliant bid and that the contract had been awarded to Maverin.

[11]  On August 17, 2018, Maverin advised DND that the four named resources were no longer available and proposed replacements for the first two resources in accordance with the provisions of the contract.

[12]  On August 20, 2018, DND accepted these replacement resources. Maverin then proposed the second two replacement resources, which were accepted by DND on August 21, 2018, in accordance with the provisions of the contract.

[13]  Also on August 20, 2018, SoftSim sent an e-mail to DND noting that it had won the contract for the “junior category” and that two of its resources were working on this contract for DND. SoftSim stated that, since losing the “intermediate category” (the subject RFP), Maverin had approached SoftSim’s team working on the “junior category” to offer employment. SoftSim submitted to DND that this demonstrated that Maverin did not have access to the candidates it proposed in its winning bid. SoftSim stated that this practice by Maverin was disrupting SoftSim’s service under the “junior category” contract, and that it expected DND to require Maverin to use the team it proposed to win the “intermediate category” contract.

[14]  On August 29 and September 6, 2018, SoftSim filed complaints No. PR-2018-025 and PR‑2018‑026, both of which were found to be premature.

[15]  On September 20, 2018, DND advised SoftSim that it had reviewed its objections and found that SoftSim’s resource had not been submitted by Maverin. DND also stated that “in any event there are no provisions prohibiting a bidder from including another vendor’s resources in its providing alternate resources”, and that “[p]oaching of employees or resources is an internal matter between bidders.” [4]

[16]  The same day, SoftSim replied to DND, copying the Tribunal, stating that its complaint was in relation to section 5.3 of the RFP, concerning the certification of availability of resources.

RELEVANT PROVISIONS OF THE RFP

[17]  Part 5 of the RFP (Certifications) provided as follows, in relevant parts:

PART 5 - CERTIFICATIONS

Bidders must provide the required certifications to be awarded a contract. Canada will declare a bid non-responsive if the required certifications are not completed and submitted in accordance with the articles below.

The certifications provided by Bidders to Canada are subject to verification by Canada at all times. Canada will declare a bid non-responsive, or will declare a contractor in default if any certification made by the Bidder is found to be untrue, whether made knowingly or unknowingly, during the bid evaluation period or during the contract period.

The Contracting Authority will have the right to ask for additional information to verify Bidders’ certifications. . . . 

5.3  ADDITIONAL CERTIFICATIONS PRECEDENT TO CONTRACT AWARD

a.  Professional Services Resources

By submitting a bid, the Bidder certifies that, if it is awarded a contract as a result of the bid solicitation, every individual proposed in its bid will be available to perform the Work as required by Canada’s representatives and at the time specified in the bid solicitation or agreed to with Canada’s representatives.

. . . 

ii.  If the Bidder is unable to provide the services of an individual named in its bid due to the death, sickness, extended leave (including parental leave or disability leave), retirement, resignation or dismissal for cause of that individual, within five business days of Canada’s knowledge of the unavailability of the individual the Bidder may propose a substitute to the Contracting Authority, providing:

A. the reason for the substitution with substantiating documentation acceptable to the Contracting Authority;

B. the name, qualifications and experience of a proposed replacement immediately available for work; and

C. proof that the proposed replacement has the required security clearance granted by Canada, if applicable.

No more than one substitute will be considered for any given individual proposed in the bid. In response to the Bidder’s proposed substitution, the Contracting Authority may elect in its sole discretion either to:

A. set aside the bid and give it no further consideration; or

B. evaluate the replacement in accordance with the requirements of the bid solicitation in the place of the original resource as if that replacement had originally been proposed in the bid, with any necessary adjustments being made to the evaluation results, including the rank of the bid vis-à-vis other bids.

If no substitute is proposed the Contracting Authority will set aside the bid and give it no further consideration.

iii.  If the Bidder has proposed any individual who is not an employee of the Bidder, by submitting a bid, the Bidder certifies that it has the permission from that individual to propose his/her services in relation to the Work to be performed and to submit his/her résumé to Canada. The Bidder must, upon request from the Contracting Authority, provide a written confirmation, signed by the individual, of the permission given to the Bidder and of his/her availability. Failure to comply with the request may result in the bid being declared non-responsive.

[18]  The RFP also included, by reference, the document “2003 (2016-04-04) Standard Instructions – Goods or Services – Competitive Requirements”, [5] which provided as follows, in relevant parts:

(2008-05-12) Conduct of evaluation

1. In conducting its evaluation of the bids, Canada may, but will have no obligation to, do the following:

a. seek clarification or verification from bidders regarding any or all information provided by them with respect to the bid solicitation;

. . . 

f. verify any information provided by bidders through independent research, use of any government resources or by contacting third parties;

g. interview, at the sole costs of bidders, any bidder and/or any or all of the resources proposed by bidders to fulfill the requirement of the bid solicitation.

[19]  Regarding the resulting contract clauses, section 7.9 of the RFP (Certifications) provided as follows:

a.  Compliance with the certifications provided by the Contractor in its bid or any TA quotation is a condition of the Contract and subject to verification by Canada during the entire Contract Period. If the Contractor does not comply with any certification or it is determined that any certification made by the Contractor is untrue, whether made knowingly or unknowingly, Canada has the right, under the default provision of the Contract, to terminate the Contract for default.

[20]  Furthermore, section 7.18(c) of the RFP, also part of the resulting contract clauses, provided as follows:

In General Conditions 2035, the section titled “Replacement of Specific Individuals” is deleted and the following applies instead:

Replacement of Specific Individuals

1. If the Contractor is unable to provide the services of any specific individual identified in the Contract to perform the services, the Contractor must within five working days of the individual’s departure or failure to commence Work . . .  provide to the Contracting Authority:

a. the name, qualifications and experience of a proposed replacement immediately available for Work; . . . 

The replacement must have qualifications and experience that meet or exceed those obtained for the original resource.

2. Subject to an Excusable delay, where Canada becomes aware that a specific individual identified under the Contract to provide services has not been provided or is not performing, the Contracting Authority may elect to:

a. exercise Canada’s rights or remedies under the Contract or at law, including terminating the Contract for default under Section titled “Default of the Contractor”, or

b. assess the information provided under(c)(1) above or, if it has not yet been provided, require the Contractor propose a replacement to be rated by the Technical Authority. The replacement must have qualifications and experience that meet or exceed those obtained for the original resource and be acceptable to Canada. Upon assessment of the replacement, Canada may accept the replacement, exercise the rights in (2)(a) above, or require another replacement in accordance with this sub article (c).

ANALYSIS

[21]  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.

[22]  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 case, are the Agreement on Government Procurement, [6] the North American Free Trade Agreement [7] and the Canadian Free Trade Agreement, [8] among others. [9]

[23]  The AGP, NAFTA and the CFTA each require that, to be considered for award, a tender must, at the time of opening, comply with the essential requirements set out in the tender documentation, and that procuring entities award contracts in accordance with the evaluation criteria specified in the tender documentation. [10]

Position of the parties

SoftSim

[24]  SoftSim submitted that Maverin’s certification regarding the availability and permission of its resources did not meet the certification requirements at section 5.3 of the RFP because they were falsely made. SoftSim submitted that Maverin often uses a strategy of “win first and then find the real candidates”, and that it uses a database of resumes to find compliant resources, regardless of their availability to perform the contract. [11] SoftSim submitted that this practice is neither fair nor acceptable, as SoftSim ensures it has candidates that are qualified and available to fulfill the requirements of the contract at the RFP stage. [12]

[25]  According to SoftSim, during a phone conversation, Maverin confirmed that it did not have access to the team it proposed and offered SoftSim mandates at the Department of Foreign Affairs and International Trade (now Global Affairs Canada) in order for SoftSim to abandon its complaint. [13]

[26]  SoftSim submitted that Maverin advertised all four network support specialist positions on job hunting websites and that, once challenged by SoftSim, Maverin attempted to provide half of the team members proposed in its bid. [14] SoftSim provided a copy of the LinkedIn profile of Maverin’s Chief Operating Officer, stating that Maverin had won a contract and was looking for four IT support specialists. [15] SoftSim also provided a copy of a job posting by Maverin from jobsaviator.com, dated August 16, 2018, titled “IT Support - Won Contract”, with the following job description:

3.4) Review and comment on the design, test and implementation documents produced for each system in order to ensure consistency with the overall systems and network design, configuration, and installation specifications; This includes reviewing their activities to assess impact on the DND and SSC networks and systems, and providing an impact analyses to the technical authority detailing any. . . .

[27]  In addition, SoftSim submitted that Maverin contacted one of its resources and attempted to induce the said resource to work for Maverin. [16]

[28]  SoftSim submitted that, in over 30 years of bidding, the government had always verified whether the resources submitted in proposals were available before awarding a contract. In this case, SoftSim submitted that no such verification happened. [17]

[29]  Finally, SoftSim submitted that one of the resources purportedly hired by Maverin for the solicitation at issue is not compliant due to having only two years’ experience, whereas the RFP required more than five years’ experience. [18]

DND

[30]  DND submitted that it was reasonable for the evaluators to rely on the bid submission certification of the winning bidder, Maverin, regarding the availability of resources. DND submitted that there was no basis to question the truthfulness of Maverin’s certification of availability, which was made as of July 27, 2018, the date of bid submission. According to DND, this certification captured the state of knowledge of Maverin at that point in time. DND noted that there was no evidence that this certification was untrue at the time it was made. DND also stated that the RFP does not permit it to revisit the certification based on the later unavailability of resources. [19]

[31]  According to DND, “the RFP did not require, as a mandatory requirement, the demonstration of either the availability of resources, or the demonstration of their explicit permissions.” [20] DND submitted that it “appropriately chose to exercise its discretion regarding the degree of demonstration that would be required from a winning bidder with respect to the certifications, and was within its rights under the RFP to do so.” [21]

[32]  With regard to the certification that a bidder has a resource’s permission to propose its services, DND submitted that there was no reason for it to consider that Maverin’s certification was not properly given and truthful. DND submitted that it was up to it, according to the terms of the RFP, to request a confirmation signed by the resources in question, which it chose not to do. DND submitted that this RFP was one of many for basic IT services and that it was designed as a low barrier for entry with a focus on best value. In this context, DND argued that it was reasonable to decide not to verify the information provided by bidders. [22]

[33]  DND also submitted that replacement of resources is a matter of contract administration and that this was permitted under the resulting contract. DND submitted that it is well known that professional service suppliers have fluctuating staff in the IT services sector. Accordingly, DND submitted that the RFP is drafted so as to allow for the replacement of resources after contract award, as long as these resources meet or exceed the requirements of the RFP. DND submitted that it properly followed the replacement process set out in article 16 of the resulting contract. [23]

[34]  Finally, DND submitted that Maverin did not contact SoftSim’s resource to induce it to leave SoftSim. [24] DND noted that Maverin’s bid and replacement proposals did not propose any of the resources proposed by SoftSim under this or any other IT services solicitation or contract let for the Carling Campus Project by the contracting authority. [25] In any event, DND submitted that poaching of resources is an internal matter between bidders and is not evidence of a breach of the trade agreements. [26]

Tribunal’s analysis

DND could rely on the certifications submitted with the bid

[35]  The Tribunal typically accords a large measure of deference to evaluators in their evaluation of proposals. In general, the Tribunal will only interfere with an evaluation that is unreasonable [27] and will substitute its judgment for that of the evaluators only when the evaluators have not applied themselves in evaluating a bidder’s proposal, have ignored vital information provided in a bid, have wrongly interpreted the scope of a requirement, have based their evaluation on undisclosed criteria or have otherwise not conducted the evaluation in a procedurally fair way. [28]

[36]  It is also well established that, where a solicitation requires bidders to certify certain information in their proposal for accuracy and completeness, the procuring entity is entitled to rely on those certifications at the time of bid evaluation. [29]

[37]  The Tribunal stated as follows in Atlantic Catch:

. . . the Tribunal is satisfied that it was not unreasonable for PWGSC to accept AECOM’s bid as meeting the certification requirement regarding the availability of resources, as per section 5.2.3.1 of the RFP, at the time of bid closing. Although changes were subsequently made to AECOM’s working team personnel, the Tribunal finds that those changes occurred after the award of contract to AECOM. As such, there is no indication that PWGSC acted unreasonably in accepting AECOM’s bid certification with respect to the availability of its proposed resources at bid closing. [30]

[38]  In the current case, as per section 5.3(a) of the RFP, certifications were created through the act of bid submission and were thus made as of that time.

[39]  There is no evidence that DND knew, prior to contract award, that the resources named by Maverin were unavailable or otherwise did not give their permission to submit their candidacy. It is clear from the evidence adduced by the parties that the contract was awarded on August 15, 2018, [31] and that Maverin only advised DND that it could no longer provide the named resources on August 17, 2018. [32] SoftSim’s purported discussions with Maverin, as well as Maverin’s online job postings, were also all subsequent to the date of contract award. [33]

[40]  Although the close proximity between the date of contract award and the date on which Maverin advised DND of the unavailability of its resources raises questions, there is no reason to believe, in the absence of evidence to the contrary, that DND colluded with Maverin. DND was well within its rights to rely on Maverin’s certification at the time of bid closing and to award the contract accordingly. [34]

[41]  Any issues arising with the availability of Maverin’s resources after contract award are ones of contract administration. Such matters fall outside the scope of the Tribunal’s jurisdiction. In Access Corporate Technologies Inc., the Tribunal stated as follows:

Subsection 30.11(1) of the CITT Act and subsection 7(1) of the Regulations allow a potential supplier to file a complaint with the Tribunal about any aspect of a procurement process for a designated contract. Contract administration is a separate phase that takes place after the procurement process is completed. It deals with issues that arise as a contract is performed and managed. The Tribunal has been clear that matters of contract administration are beyond the scope of its jurisdiction. [35]

[42]  The Tribunal also notes that the resulting contract clauses include a section entitled “Replacement of Specific Individuals” which provides a process to replace any specific individual identified in the contract. This shows that the current situation had been contemplated by DND and that it was intended to be addressed as a matter of contract administration.

DND was not obligated to verify the information and certifications submitted

[43]  Although SoftSim mentions that the government generally verifies the availability of resources, the terms of the RFP are clear that DND has the possibility, but not the obligation, to verify the information and the certifications provided by the bidders. [36] By analogy, the Supreme Court of Canada, in Double N Earthmovers Ltd., stated as follows:

The City did not breach any duties owed to Double N by failing to investigate Sureway’s bid. Since each bidder is legally obliged to comply if its bid is accepted, there is no reason why bidders would expect an owner to investigate whether a bidder will comply. There was also neither an express nor an implied obligation in the tender documents to investigate the equipment bid prior to the acceptance. To imply such a duty would overwhelm and ultimately frustrate the tender process by creating unwelcome uncertainties. All bids must receive equal treatment to protect the bidding process and, to that end, an owner must weigh bids on the basis of what is actually in the bid and not on the basis of subsequently discovered information. Allegations raised by rival bidders do not compel owners to investigate the bids made by others. [37]

[44]  In addition, each solicitation must be treated independently, [38] and the government can administer each one according to its preferences. To the extent that DND had the discretion under the RFP to decide whether or not to verify the information provided by bidders prior to contract award, the fact that it decided not to do so in this case does not breach the terms of the RFP or the trade agreements.

Maverin did not propose a non-compliant resource

[45]  With regard to SoftSim’s assertion that one of Maverin’s purported resources did not meet the requirements of the solicitation, the evidence on file shows that the resource referred to by SoftSim was not proposed by Maverin. [39] As such, the Tribunal does not need to consider this argument.

Poaching of employees is not prohibited

[46]  The Tribunal has previously ruled that the poaching of another supplier’s resources is not evidence of a breach of the trade agreements. [40] In Paul Pollack Personnel Ltd., the Tribunal stated that there is no express prohibition against bidding the resources of another vendor and that the poaching of employees is an internal matter between bidders. [41] Accordingly, even if SoftSim’s assertions in this regard were true, it would have no recourse before the Tribunal.

Conclusion

[47]  For the reasons provided above, the Tribunal finds that the complaint is not valid.

COSTS

[48]  Pursuant to section 30.16 of the CITT Act, the Tribunal awards DND its reasonable costs incurred in responding to the complaint, which costs are to be paid by SoftSim. In accordance with the Procurement Costs Guideline (the Guideline), the Tribunal’s preliminary indication of the level of complexity for this complaint is Level 1, as the procurement involved personal services by one party and the issues were simple. In addition, the proceedings were straightforward and did not involve complicated procedural issues. As such, the Tribunal’s preliminary indication of the amount of the cost award is $1,150.

DETERMINATION OF THE TRIBUNAL

[49]  Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is not valid.

[50]  Pursuant to section 30.16 of the CITT Act, the Tribunal awards DND its reasonable costs incurred in responding to the complaint, which costs are to be paid by SoftSim. In accordance with the Guideline, the Tribunal’s preliminary indication of the level of complexity for this complaint case is Level 1, and its preliminary indication of the amount of the cost award is $1,150. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Tribunal, as contemplated in Article 4.2 of the Guideline. The Tribunal reserves jurisdiction to establish the final amount of the cost award.