File No. PR-2020-092 Gary Parker Excavating Limited

Decision made Thursday, March 11, 2021 Decision and reasons issued Wednesday, March 24, 2021

 

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

BY

GARY PARKER EXCAVATING LIMITED

AGAINST

DEFENCE CONSTRUCTION CANADA

DECISION

Pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal has decided not to conduct an inquiry into the complaint at this time. One aspect of the complaint was not filed in a timely manner, the other is premature because Defence Construction Canada has not yet replied to an objection made by the complainant.

 

STATEMENT OF REASONS

[1] Subsection 30.11(1) of the Canadian International Trade Tribunal Act [1] provides that, subject to the Canadian International Trade Tribunal Procurement Inquiry Regulations, [2] a potential supplier may file a complaint with the Canadian International Trade Tribunal concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint. Subsection 30.13(1) of the CITT Act provides that, subject to the Regulations, after the Tribunal determines that a complaint complies with subsection 30.11(2) of the CITT Act, it shall decide whether to conduct an inquiry into the complaint.

SUMMARY OF THE COMPAINT

[2] This complaint relates to a Notice of Proposed Procurement issued by Defense Construction Canada (DCC) on behalf of the Department of National Defense (Project No. GW300138/the first solicitation) for the provision of tree removal services, which was ultimately cancelled and retendered (Project No. GW300138_74624/the second solicitation).

[3] Gary Parker Excavating Limited (GPE) claims that DCC improperly cancelled the first solicitation and retendered it with a view to awarding the contract to a particular supplier. As a remedy, GPE requests that it be awarded the contract under the first solicitation or, in the alternative, that it be compensated for lost profits by an amount specified by the Tribunal. GPE also requests reimbursement of its bid preparation costs and/or its costs related to the preparation its complaint.

[4] For the reasons that follow, the Tribunal finds that the complaint is not timely. One aspect of the complaint was not filed in a timely manner; the other is premature because Defence Construction Canada has not yet replied to an objection made by the complainant. As such, the Tribunal has decided not to conduct an inquiry into the complaint at this time.

BACKGROUND

[5] On October 14, 2020, the first solicitation was posted on MERX, Canada’s electronic tendering system. [3]

[6] On December 18, 2020, DCC acknowledged receipt of GPE’s proposal and informed it that the first solicitation had been cancelled due to a change in the scope of work. [4] Unofficial bid results posted to MERX indicate GPE’s proposal was the highest-ranked bid under the first solicitation. [5]

[7] On January 29, 2021, the project was retendered under the second solicitation, with a closing date of February 16, 2021. [6]

[8] On February 3, 2021, GPE emailed DCC to ask why the first solicitation had been cancelled, noting that requirements of the second solicitation appeared substantially similar to those of the first. [7]

[9] GPE’s final email to DCC of February 3, 2021, summarizes its understanding of the reasons DCC gave via telephone for retendering, specifically that the first solicitation was cancelled due to concerns over environmental liability regarding permits and the potential for tree removals to extend beyond what was set out in the first solicitation. In its email summarizing the call, GPE requests DCC to confirm or clarify GPE’s summary. [8]

[10] On February 9, 2021, DCC sent GPE a letter stating that further risk analysis of the first solicitation identified environmental concerns requiring such significant changes to the original tender package as to necessitate cancellation and retendering. [9]

[11] The unofficial results of the second solicitation were published on MERX sometime after bid closing on February 16, 2021. [10]

[12] On March 1, 2021, GPE sent DCC a letter seeking clarification with regard to the procurement process, including the cancellation of the first solicitation and the evaluation of the lowest bidder under the second solicitation, and alleging non-compliance on the part of that lowest bidder. [11]

[13] On March 3, 2021, GPE filed its complaint with the Tribunal. On March 4, 2021, the Tribunal requested additional information be provided before the complaint could be considered complete, pursuant to subsection 30.11(2) of the CITT Act. On March 5, 2021, GPE provided the Tribunal with additional information that substantially addressed the deficiencies in the complaint. Accordingly, pursuant to paragraph 96(1)(b) of the Canadian International Trade Tribunal Rules, the complaint was considered to have been filed on March 5, 2021.

[14] On March 11, 2021, the Tribunal decided not to conduct an inquiry into the complaint.

ANALYSIS

[15] Pursuant to sections 6 and 7 of the Regulations, after receiving a complaint that complies with subsection 30.11(2) of the CITT Act, the Tribunal must determine whether the following four conditions are met before it launches an inquiry:

(i) the complaint has been filed within the time limits prescribed by section 6 of the Regulations; [12]

(ii) the complainant is a potential supplier; [13]

(iii) the complaint is in respect of a designated contract; [14] and

(iv) the information provided discloses a reasonable indication that the procurement has not been conducted in accordance with the relevant trade agreements. [15]

[16] For the following reasons, the Tribunal finds that the complaint was not filed within the time limits prescribed by section 6 of the Regulations.

Timeliness

[17] Pursuant to section 6 of the Regulations, a potential supplier must either raise an objection with the procuring government institution or file a complaint with the Tribunal no later than 10 working days after the day on which the basis of the complaint became known or reasonably should have become known to the supplier. [16] Further, a potential supplier who has made a timely objection to the procuring government institution and is denied relief may file a complaint with the Tribunal within 10 working days after the day on which the potential supplier has actual or constructive knowledge of the denial of relief. [17]

[18] GPE’s complaint states that it made two objections to DCC regarding the cancellation of the first solicitation. The first objection was made on February 3, 2021, after GPE saw the second solicitation posted on MERX. The second objection was made on March 1, 2021, after GPE saw the unofficial bid results posted to MERX, which included the name and evaluated price of the winning bidder under the second solicitation. In the Tribunal’s view, these objections pertained to two different grounds of complaint.

[19] The first ground of complaint, underpinning GPE’s objection of February 3, 2021, appears to be that DCC improperly prepared the first solicitation, which had to be cancelled and retendered under the second solicitation when DCC realized the first solicitation did not adequately reflect the scope of work needed to fulfill its requirements. GPE alleges that DCC already had in its possession all the information it used to establish this scope of work when it prepared the first solicitation and argues that this reflects a lack of due diligence by DCC in doing so. [18]

[20] GPE characterizes the ground of complaint underpinning its objection of March 1 as “bid shopping”, which the Tribunal here interprets to mean improperly cancelling a tender for the purpose of receiving a more advantageous bid upon retendering. According to GPE, it became suspicious that this was the real purpose of retendering when it saw the evaluated price of the winning bid in the second solicitation, sometime after the close of bidding. [19]

[21] Both grounds of complaint are based on similar arguments and evidence, specifically that the requirements of both solicitations are so similar as to indicate some other explanation for the retendering than revisions to the scope of work. [20] However, in the Tribunal’s view, the alleged improprieties in the specific grounds of complaint are distinct, as a lack of due diligence in preparing the first solicitation would reflect an unintentional error, while cancelling that solicitation in order to engage in bid shopping would require intent on the part of DCC.

[22] For the reasons outlined below, the Tribunal finds that the first ground of complaint, which formed the subject of GPE’s objection to DCC of February 3, 2021, is late. The Tribunal also finds that the second ground of complaint, which formed the subject of GPE’s objection to DCC of March 1, 2021, is premature. The Tribunal therefore will not conduct an inquiry at this time.

The first ground of complaint is late

[23] As outlined above, on December 18, 2020, DCC acknowledged receipt of GPE’s proposal and informed it that the first solicitation had been cancelled due to a change in the scope of work. On January 29, 2021, the project was retendered under the second solicitation.

[24] GPE submits that, upon reading the tender documents for the second solicitation, it was apparent that further information was included in these documents that had been available to DCC when it tendered the first solicitation. GPE argues that DCC was therefore in possession of all the information necessary to prepare the first solicitation according to what were ultimately determined to be its requirements as reflected in the second solicitation, which according to GPE shows “a lack of due diligence on behalf of DCC in the issuance of this tender.” [21] In the Tribunal’s view, January 29, 2021, is therefore the earliest date on which this ground of complaint became known or reasonably should have become known to GPE.

[25] On February 3, 2021, GPE emailed DCC requesting to know why the first solicitation had been cancelled, noting that the requirements of the second solicitation appeared to be substantially similar to those of the first. In subsequent email and telephone communications that same day, GPE repeatedly requested a written explanation of DCC’s reasons for cancelling the first solicitation. GPE’s final email to DCC of February 3, sent at 3:57 p.m., summarizes its understanding of the reasons DCC gave via telephone for retendering, namely that:

· The first solicitation was cancelled due to concerns over environmental liability regarding permitting and the potential for tree removals to extend beyond what was set out in the original solicitation;

· The second solicitation, and associated new environmental permit, were based on a new work methodology which alleviated liability for both DCC and the winning bidder by clearly defining the removal requirements rather than assessing each of the roughly 1,450 trees on an individual basis as was planned under the first solicitation;

· Under the second solicitation the contract awardee was to remove trees above a specified elevation in each designated removal area “at the discretion of DCC’s acting consultants (biologist, arborist)” rather than assessing each tree themselves; and

· Work in certain areas had been cancelled due to identified environmental concerns, while the requirement for use of heavy equipment in some areas was replaced by work to be done by hand due to environmental concerns. [22]

[26] On February 9, 2021, DCC sent GPE a letter stating that, while “it is not DCC’s practice to cancel tenders,” further risk analysis of the first solicitation identified environmental concerns requiring such significant changes to the original tender package as to necessitate cancellation and retendering. DCC’s letter concludes by stating “I trust this satisfies your concerns with the requirement for the cancellation of GW300138_73754.” [23]

[27] The Tribunal finds that GPE made a timely objection to DCC on February 3, 2021, within 10 working days after the earliest date it could have become aware of this ground of complaint, i.e. on January 29, 2021, and therefore within the deadline imposed by subsection 6(2) of the Regulations. However, the Tribunal also finds that DCC’s reply on February 9, 2021 (which included reasons for the cancellation of the first solicitation and indicated that DCC did not intend to reconsider its position or provide further explanation) constitutes a denial of the relief sought by GPE in its objection of February 3, 2021. Pursuant to subsection 6(2), GPE therefore had 10 working days from February 9, 2021, to file its complaint on that ground with the Tribunal. GPE filed its complaint with the Tribunal on March 5, 2021, 18 working days after February 9, 2021. The Tribunal therefore concludes that GPE’s ground of complaint alleging lack of due diligence on the part of DCC in preparing the first solicitation was filed outside the time limits prescribed by the Regulations. The Tribunal notes that this conclusion would be the same had GPE’s initial complaint, received by the Tribunal on March 3, 2021, been considered as complete and filed as of that date.

The second ground of complaint is premature

[28] The second solicitation closed on February 16, 2021. GPE submits that it became suspicious when it saw the unofficial bid results, including the amount of the winning bid, posted on MERX. GPE stated in its complaint that unsuccessful bidders do not receive notice that they are not the successful bidder, but must search for the bid results which are posted to the MERX website shortly after tender closing. [24] Although GPE did not provide the date it accessed the bid results on MERX, it is reasonable to infer this would have occurred, at the very earliest, shortly after bids closed on February 16, 2021.

[29] On March 1, 2021, GPE sent DCC a letter seeking clarification with regard to the procurement process, including the cancellation of the first solicitation and the evaluation of the lowest bidder under the second solicitation, and alleging non-compliance on the part of that lowest bidder. The Tribunal finds that this objection, made nine working days after the earliest date GPE could have learned of the basis of this ground of complaint on February 16, 2021, occurred within the time limits set out in subsection 6(2) of the Regulations. However, the Tribunal also finds that the submission of GPE’s complaint on this ground to the Tribunal, prior to receiving a response from DCC, was premature.

[30] A potential supplier who has made a timely objection to the procuring government institution and is denied relief may file a complaint with the Tribunal within 10 working days after the day on which the potential supplier has actual or constructive knowledge of the denial of relief. [25] In the Tribunal’s view, DCC has not yet denied relief to GPE. There is no indication that DDC has provided a response to GPE’s objection of March 1. Accordingly, GPE does not yet know whether DCC will provide the response and/or deny the relief it seeks.

[31] The Tribunal generally considers it reasonable for a complainant to construe a denial of relief where, after the passage of a reasonable period of time, the complainant’s position has yet to be addressed by the government institution. ^[26] Recent Tribunal practice has been that 30 days, starting from the issuance of reasons for the decision rejecting the complaint, constitute a reasonable amount of time in this regard. ^[27]

[32] The Tribunal therefore considers the ground of complaint contained in GPE’s objection of March 1, 2021, to be premature and will therefore not conduct an inquiry at this time.

Timeframe for any future complaint

[33] Once GPE has received the requested explanation, it may file another complaint with the Tribunal within 10 working days of this response, if it still considers itself to have been aggrieved.

[34] Alternatively, if DCC does not provide the requested explanation within a reasonable time frame, GPE may also file a new complaint with the Tribunal. In these circumstances, the Tribunal would consider a reasonable delay to be 30 days from the issuance of these reasons, after which time GPE may construe a lack of response to be a denial of relief. GPE would therefore have 10 working days from the 30^th day following the date of issuance of these reasons to file a new complaint with the Tribunal.

[35] In either case, if GPE decides to file a new complaint, it may request that documents already filed with this complaint be joined to the new complaint.

DECISION

[36] Pursuant to subsection 30.13(1) of the CITT Act, the Tribunal has decided not to conduct an inquiry into the complaint.