File PR-2020-068 Heiltsuk Horizon Maritime Services Ltd./Horizon Maritime Services Ltd. v. Department of Public Works and Government Services

Determination and reasons issued Wednesday, May 22, 2024

 

TABLE OF CONTENTS

DETERMINATION i

STATEMENT OF REASONS 1

OVERVIEW 1

BACKGROUND 1

POSITIONS OF THE PARTIES 3

Heiltsuk Horizon 3

PWGSC 3

ATL 4

ANALYSIS 4

Remedies requested by Heiltsuk Horizon 10

COSTS 14

Complaint costs 14

Bid preparation costs 14

DETERMINATION 14

 

IN THE MATTER OF a complaint filed by Heiltsuk Horizon Maritime Services Ltd./Horizon Maritime Services Ltd. pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act;

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;

AND FURTHER TO a determination pursuant to subsection 30.14(2) of the Canadian International Trade Tribunal Act that the complaint was not valid and that each party would bear its own costs;

AND FURTHER TO a decision by the Federal Court of Appeal allowing the application for judicial review, setting aside the Canadian International Trade Tribunal’s determination and declaring the complaint valid.

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

DETERMINATION

Pursuant to subsection 30.15(2) of the Canadian International Trade Tribunal Act (CITT Act), the Canadian International Trade Tribunal recommends that the Department of Public Works and Government Services (PWGSC) pay a lump sum amount of $5,000 to Heiltsuk Horizon Maritime Services Ltd./Horizon Maritime Services Ltd.

The Tribunal further recommends that PWGSC verify and document that the ship masters to be employed or proposed at the time of the next potential extension of the current contract have the qualification and the experience that either meet or exceed the score obtained by the ship masters originally submitted by Atlantic Towing Ltd.

Pursuant to section 30.16 of the CITT Act, the Tribunal awards Heiltsuk Horizon Maritime Services Ltd./Horizon Maritime Services Ltd. its reasonable costs incurred in preparing and proceeding with this complaint, which costs are to be paid by the PWGSC. In accordance with the Procurement Costs Guidelines (Guidelines), the Tribunal’s preliminary indication of the level of complexity is Level 3 and the preliminary indication of the cost award is $4,700. If any party disagrees with the preliminary level of complexity or indication of the amount of the cost award, it may make submissions to the Tribunal, as contemplated in article 4.2 of the Guidelines. The Tribunal reserves jurisdiction to establish the final amount of the cost award.

 

Tribunal Panel:	Frédéric Seppey, Presiding Member
Tribunal Secretariat Staff:	Charlotte Saintonge, Counsel Emilie Audy, Counsel Geneviève Bruneau, Registry Officer Kim Gagnon-Lalonde, Registry Officer
Complainant:	Heiltsuk Horizon Maritime Services Ltd./Horizon Maritime Services Ltd.
Heiltsuk Horizon Maritime Services Ltd./Horizon Maritime Services Ltd.
Counsel for the Complainant:	Frank Metcalf, Q.C. Seamus Ryder Marc McLaren-Caux Gerry Stobo
Government Institution:	Department of Public Works and Government Services
Department of Public Works and Government Services
Counsel for the Government Institution:	Brendan F. Morrison Peter J. Osborne Zachary Rosen
Intervener:	Atlantic Towing Limited
Atlantic Towing Limited
Counsel for the Intervener:	Robert A. Glasgow Julie K. Parla Ljiljana Stanic R. Paul Steep

Please address all communications to:

The Deputy Registrar
Telephone: 613-993-3595
Email: citt-tcce@tribunal.gc.ca

 

STATEMENT OF REASONS

OVERVIEW

[1] The Federal Court of Appeal (FCA)[1] set aside the determination of the Canadian International Trade Tribunal made on May 3, 2021, with respect to a procurement complaint filed by Heiltsuk Horizon Maritime Services Ltd./Horizon Maritime Services Ltd. (Heiltsuk Horizon).[2] The complaint was in connection with a request for proposal (RFP) relating to the services of two emergency towing vessels to patrol Canada’s west coast. The FCA declared the complaint valid. Further to this decision, the Tribunal must determine the residual issue of the appropriate remedy.

[2] For reasons that follow, the Tribunal recommends that the Department of Public Works and Government Services (PWGSC) pay a lump sum amount of $5,000 to Heiltsuk Horizon, in recognition of the breach by PWGSC of the terms of the RFP with respect to the substitution of ship masters, which undermined to a certain extent the integrity of the procurement process. The Tribunal further recommends that PWGSC verify and document that the ship masters employed or proposed at the time of the next potential extension of the current contract have the necessary qualification and experience to comply with section 7.46 of the RFP’s framework for post-award resource substitutions and, accordingly, that they meet or exceed the score obtained by the ship masters originally submitted by Atlantic Towing Ltd. (ATL).

BACKGROUND

[3] Heiltsuk Horizon filed five complaints with the Tribunal related to solicitation F7017‑160056/C.[3] PWGSC conducted the procurement, on behalf of the Department of Fisheries and Oceans, for the services of two emergency towing vessels provided on a time charter basis to patrol the British Columbia coastline. PWGSC awarded the contract to ATL on August 9, 2018.

[4] On May 3, 2021, the Tribunal found that Heiltsuk Horizon’s fifth complaint (PR‑2020‑068) with respect to the procurement at issue was not valid.[4] Heiltsuk Horizon applied for judicial review of the Tribunal’s determination on May 31, 2021, pursuant to sections 18.1 and 28 of the Federal Courts Act.[5]

[5] The FCA issued its decision on May 2, 2023, and found that the Tribunal’s determination was unreasonable, as “there was no bridge between the evidence and the Tribunal’s conclusion”.[6] The FCA further set aside the Tribunal’s decision and declared the complaint valid.[7] The FCA was silent with respect to the remedies to be granted to Heiltsuk Horizon.

[6] On May 11, 2023, Heiltsuk Horizon filed with the FCA a motion for reconsideration of the judgment pursuant to Rule 397 of the Federal Courts Rules,[8] requesting that the FCA address the issue of remedies.

[7] On May 17, 2023, the Attorney General of Canada and ATL each filed a motion to quash Heiltsuk Horizon’s motion for reconsideration.

[8] On June 2, 2023, the FCA issued an order in which it rejected the parties’ motions and advised as follows:

[9] … In light of its finding that the complaint was not valid, the Tribunal did not address the remedy; the issue of remedy therefore remains live before it. …

…

[13] There is no reason in law or in the procedural history of the matter to conclude that, because the preliminary question of the complaint’s validity was not returned to the Tribunal for reconsideration, the Tribunal has no jurisdiction to fulfill the second half of its mandate and consider what remedy is appropriate in the circumstances. …[9]

[9] On June 30, 2023, Heiltsuk Horizon asked the Tribunal to grant the remedies it had requested in its initial complaint, without allowing further submissions from the parties.[10]

[10] On July 4, 2023, ATL filed comments on Heiltsuk Horizon’s request for remedies.[11] ATL further submitted that not allowing ATL and PWGSC to make submissions on the remedy would be a breach of procedural fairness.

[11] On July 7, 2023, PWGSC filed comments on Heiltsuk Horizon’s request for remedies.[12] PWGSC also argued that there was no reasonable basis for Heiltsuk Horizon’s claim that it was entitled to unilaterally deliver submissions and that PWGSC and ATL were not.

[12] On July 11, 2023, the Tribunal acknowledged receipt of the parties’ submissions and accepted them on the record. It also granted the opportunity for Heiltsuk Horizon to file comments on PWGSC and ATL’s submissions.

[13] On July 19, 2023, Heiltsuk Horizon filed its comments on PWGSC and ATL’s submissions.[13]

POSITIONS OF THE PARTIES

Heiltsuk Horizon

[14] Heiltsuk Horizon submitted that it is clear from the FCA’s decision and order that the Tribunal continues to have jurisdiction to fulfill the second half of its mandate and consider what remedy is appropriate in the circumstances. It argued that the unlawful substitutions made by PWGSC were serious and cut to the core of the solicitation; PWGSC directly undermined the fairness of the procurement process and breached its obligations under the Canadian Free Trade Agreement. According to Heiltsuk Horizon, ATL has unreasonably received benefit from PWGSC’s failure to enforce key terms of the solicitation and its resulting contract. Heiltsuk Horizon also claimed that it had effectively been denied the opportunity to profit from the contract, including the seven option years available. Heiltsuk Horizon argued that, by failing to enforce key terms of the solicitation, PWGSC essentially conducted a modified solicitation on which only ATL had the opportunity to bid.

[15] As such, Heiltsuk Horizon submitted that, to restore a measure of confidence in the integrity of the procurement system, the Tribunal should recommend the same remedies Heiltsuk Horizon initially requested as part of its complaint, namely, the following:

(a) The cancellation of the contract awarded to ATL;

(b) Compensation to be paid by PWGSC to Heiltsuk Horizon for its lost opportunity;

(c) Compensation to be paid by PWGSC to Heiltsuk Horizon to denounce PWGSC’s failure to promote and preserve the integrity of the procurement process;

(d) The referral of the quantum of the compensation to the Tribunal for determination.[14]

[16] During the complaint proceedings, Heiltsuk Horizon requested to be awarded its complaint costs.[15] In the submissions made subsequently to the FCA decision, none of the parties has addressed the issue of costs (neither complaint costs nor bid preparation costs), although Heiltsuk Horizon submitted that it requests the same remedies it requested during the complaint proceedings.[16]

PWGSC

[17] PWGSC submitted that none of the remedies that Heiltsuk Horizon requested are warranted by the circumstances of this case for the reasons that follow:

· Heiltsuk Horizon’s bid was ranked last out of a number of compliant bids received for this solicitation, and Heiltsuk Horizon made no allegation that any of the higher‑ranked bids were non-compliant. Similarly, the FCA’s findings do not impact the compliance or ranking of those other bids.

· The fact that the contract was properly awarded to ATL was not challenged in this complaint. The FCA’s only finding was that the evidence was insufficient to support a conclusion that a substitution of the ship masters was conducted in a manner consistent with PWGSC’s obligations under the applicable trade agreements.

· ATL has been successfully performing the contract since 2018, providing essential emergency towing services that the public requires.

· Heiltsuk Horizon is not capable of performing the contract anymore, because both of its bid vessels were decommissioned and dismantled in 2019.

· PWGSC acted in good faith in carrying out the procurement and its administration of the contract, including the personnel substitution process.

· The results of the bid evaluation confirm that this complaint would not have changed the outcome of the solicitation. Even if ATL had not been awarded any points with respect to the relevant rated requirement, it still would have been the highest‑ranked bidder and certainly would have been ranked higher than Heiltsuk Horizon.[17]

ATL

[18] ATL requested that the Tribunal not recommend the cancellation of the contract awarded to ATL. It submitted that cancellation is an extraordinary remedy that is not appropriate in this case for the following reasons:

· There was no serious deficiency in the procurement process, as ATL’s bid remained compliant despite the substitution of ship masters.

· There was no prejudice to Heiltsuk Horizon, as a cancellation of ATL’s contract would have resulted in the contract being awarded to the next highest bidder, not Heiltsuk Horizon.

· PWGSC acted in good faith.

· There was no prejudice to the competitive procurement system, as the substitution of the ship masters was proposed for reasons related to community outreach, and it could have easily swapped back the replacement ship masters for the original ship masters at the time.

· The contract has been substantially performed. [18]

ANALYSIS

[19] The Tribunal must determine the appropriate remedy to recommend to PWGSC with regard to the FCA’s finding that Heiltsuk Horizon’s complaint is valid.

[20] It is worth recalling what makes the complaint valid.

[21] The FCA found that there was no bridge between the evidence and the Tribunal’s conclusion that the substitution of the ship masters was made in accordance with the terms of the RFP.[19] The Court was not convinced that a conclusion could be reached, on the face of the resumes submitted, that all the substitute ship masters met the mandatory requirements. The FCA noted the lack of evidence to support the conclusion that the substitute ship masters complied with the requirements.[20] The FCA concluded that, in its determination, the Tribunal did the assessment that PWGSC should have done, in circumstances that required the Tribunal to make assumptions about the experience described in the resumes and conformity to the requirements of section 7.46 of the RFP.[21] PWGSC did not properly document the evaluation of the substitute ship masters proposed by ATL, making it impossible to ensure that the terms of the RFP with respect to the substitution of ship masters were respected.[22]

[22] Pursuant to subsection 30.15(2) of the Canadian International Trade Tribunal Act[23] (CITT Act), the Tribunal may recommend such remedy as it considers appropriate, including the following:

(a) that a new solicitation for the designated contract be issued;

(b) that the bids be re-evaluated;

(c) that the designated contract be terminated;

(d) that the designated contract be awarded to the complainant; or

(e) that the complainant be compensated by an amount specified by the Tribunal.

[23] In recommending an appropriate remedy, the Tribunal is required, under subsection 30.15(3) of the CITT Act, to consider all the circumstances relevant to the procurement of the goods or services to which the designated contract relates, including the following:

(i) the seriousness of any deficiency in the procurement process found by the Tribunal;

(ii) the degree to which the complainant and all other interested parties were prejudiced;

(iii) the degree to which the integrity and efficiency of the competitive procurement system was prejudiced;

(iv) whether the parties acted in good faith; and

(v) the extent to which the contract was performed.

[24] In making a recommendation, the Tribunal should pay particular attention to the unique circumstances of the case. However, the Tribunal’s recommendations are not limited to the relief sought by a complainant.[24]

[25] It is worth noting the principles put forward by the FCA in Canada (Attorney General) v. Almon Equipment Limited to establish the purposes of the regulatory regime of subsections 30.15(2) and (3) of the CITT Act:

(1) Fairness to competitors in the procurement system. A fair procurement system that applies one set of transparent rules to all bidders increases confidence in the system, and encourages increased participation in competitions. This maximizes the probability that the government will get good quality goods and services that meet its needs, at minimum expense to the taxpayer. In short, fairness gives taxpayers value for the taxes they pay.

(2) Ensuring competition among bidders. When bidders are placed on a level playing field and compete, it is more likely that government will get good quality goods and services that meet its needs, at minimum expense to the taxpayer. Competition also gives taxpayers value for the taxes they pay.

(3) Efficiency. This speaks directly to the government getting good quality goods and services at minimum expense. This also speaks to the need for a procurement system to run in a timely, practical manner without causing unnecessary expense.

(4) Integrity. A procurement process with integrity increases participants’ confidence in the procurement system and enhance their participation in it. This increases the probability that government will get good quality goods and services that meet its needs, at minimum expense to the taxpayer. A procurement process with integrity also gives taxpayers value for the taxes they pay.[25]

[26] When determining what remedy is appropriate, the FCA has recognized that the termination of a contract is not an automatic remedy where a contract is improperly awarded. The FCA noted that the Tribunal must reconcile the injured bidder’s interest in being adequately compensated for the prejudice suffered with the public interest in having the contract performed as soon as possible and, where possible, without interruption, unless warranted by, inter alia, the other factors listed at subsection 30.15(3) of the CITT Act.[26]

[27] Keeping the above-noted principles in mind, the Tribunal will now review each of the factors listed in subsection 30.15(3) of the CITT Act and apply them to the specific circumstances of the case.

(a) Seriousness of any deficiency in the procurement process

[28] Heiltsuk Horizon submitted that the unlawful substitutions made by PWGSC were serious and cut to the core of the solicitation and, therefore, the Tribunal should factor the seriousness of PWGSC’s breach into its consideration of remedy.[27] Heiltsuk Horizon claimed that all other bidders were directly prejudiced and that these circumstances gravely undermine the public’s confidence in the integrity of the procurement system. More specifically, Heiltsuk Horizon argued that, by failing to enforce key terms of the solicitation, PWGSC essentially conducted a modified solicitation on which only ATL had the opportunity to bid.

[29] ATL claimed that, at the time of the first substitution, all four ship masters proposed in ATL’s bid were still available and could have performed the duties if PWGSC had deemed the substitution unacceptable.[28]

[30] The Tribunal notes that the breach related to the evaluation of ATL’s proposed substitution, not to the evaluation of the bids submitted by all bidders (including Heiltsuk Horizon, ATL and others) in response to the RFP. The Tribunal does not see this deficiency as having had a discernible direct impact on the ability of other bidders (including Heiltsuk Horizon) to compete fairly in this procurement process. Moreover, because the terms of section 7.46 of the RFP accounted for the possibility of the ship masters initially offered being substituted, the Tribunal is not convinced by Heiltsuk Horizon’s claim that PWGSC conducted a modified solicitation by accepting the substitution.

[31] In its decision, the FCA found that the information provided by ATL was insufficient for PWGSC to conclude that the substitute ship masters proposed by ATL had qualifications and experience that met or exceeded those of the ship masters submitted in its initial bid.[29] This is the crux of what makes the complaint filed by Heiltsuk Horizon valid in part.

[32] This lack of rigour on the part of PWGSC in validating the experience of proposed substitute ship masters clearly constitutes a deficiency in the procurement process. By not properly verifying the experience of the ship masters, PWGSC failed to apply transparent rules, which, to some extent, may contribute to decreasing bidders’ confidence in the procurement process.

[33] The degree of seriousness of this breach is also a function of the extent to which the competitiveness of the procurement process was affected. In other words, the Tribunal will also consider whether the outcome of the solicitation would have been different but for PWGSC’s breach. This matter relates to the degree of prejudice caused by the breach to other interested parties, which is discussed below.

(b) To what degree have the complainant and all other interested parties been prejudiced?

[34] The Tribunal fails to see how the complainant has been prejudiced by PWGSC’s breach. It is clear from the evidence on record that Heiltsuk Horizon’s bid was ranked last out of the several compliant bids received for this solicitation.[30] If the contract had not been awarded to ATL, for whatever reason, Heiltsuk Horizon’s chances to have its bid selected were very limited.

[35] To what degree other compliant bidders have been prejudiced by the breach is, in the Tribunal’s view, a matter of speculation. Had PWGSC rejected the proposed substitute ship masters, ATL would have likely reverted to its initially proposed, fully evaluated ship masters, as, according to ATL, these remained available up to the start of the contract.[31] This evidence presented by ATL was not contested by other parties. In the event ATL would not have been in a position to provide its initially submitted, fully evaluated ship masters, the next highest‑ranked bidder could have been awarded the contract, if its own proposed, fully evaluated ship masters would have still been available. The evidence on the record does not allow the Tribunal to determine the likelihood of such an outcome materializing or which bidder would have benefited.

[36] The Tribunal therefore finds that, based on the information on the record, it cannot conclude that the complainant or any other interested parties have been materially prejudiced by the breach.

(c) To what degree has the integrity and efficiency of the competitive procurement system been prejudiced?

[37] In recommending a remedy, the Tribunal must have regard not only to the complainant’s prejudice but also to systemic concerns.[32] As noted in Almon Equipment Limited, a procurement process with integrity increases participants’ confidence in the procurement system and enhances their participation in it.[33] The Tribunal must therefore be mindful of the importance of potential bidders having confidence in the integrity of the procurement system. The FCA also explained this principle in Canada (Attorney General) v. Envoy Relocation Services as follows:

[22] Although performing essentially adjudicative functions when it inquires into complaints by disappointed bidders on government contracts that they were unfairly treated, the CITT must exercise its powers with a view to, among other things, maintaining potential bidders’ confidence in the integrity of the procurement system. An erosion of confidence would have a detrimental impact on the competitiveness of bidding. Hence, it should not be assumed that the CITT’s power to recommend compensation is exercisable exclusively on the basis of common law principles.[34]

[38] In this case, the integrity of the system was undermined to some degree because PWGSC failed to apply itself in accepting ATL’s proposed substitution, in light of the insufficient information showing that the substitution was equivalent to the original bid. The evaluation of the substitute candidates did not follow the requirements of section 7.46 of the RFP. As a consequence, the confidence bidders have in PWGSC’s ability to fully respect the rules of this RFP is potentially affected.

[39] The Tribunal considered, similarly to its analysis in Aqua Valley Water,[35] whether there is evidence that the cause of the deficiency is due to some endemic or major flaw within the procurement framework of this RFP. It does not seem to be the case. Evidence on the record indicates that decision-making officials at both PWGSC and the Canadian Coast Guard (CCG) were conscious, when considering the proposed substitution, of section 7.46 of the RFP provisions with respect to the evaluation of the proposed substitute ship masters and the conditions to be met to be able to authorize the substitution.[36] The breach resulted from an absence of evidence that the proposed substitutes had “qualifications and experience that meet or exceed the score obtained for the original resource”.[37] More specifically, at the time of the assessment of proposed substitutes, evaluators at the CCG simply attested that the individuals met mandatory requirement 20 (minimum of 5 years of experience in ocean and emergency towing), and the evaluators do not seem to have compared the scores of the proposed substitutes with those of the original ship masters with respect to rated requirement 24 (number of years of experience of the ship masters).[38] In the Tribunal’s view, this does not demonstrate an endemic or major flaw within the procurement framework of this RFP, but rather an obvious defect in the application of the terms of section 7.46 of the RFP.

(d) Did the parties act in good faith?

[40] Heiltsuk Horizon submitted that the actions of PWGSC in this case and the overall history of this nearly five-year litigation could not possibly support a conclusion of PWGSC acting in good faith. It further claimed that PWGSC knew full well that it should not have permitted a core change to the requirements immediately after contract award. According to Heiltsuk Horizon, PWGSC’s cavalier approach to the integrity of the procurement system in this case has been magnified and compounded by the deliberate obfuscation of its positions and representations throughout the complaint inquiry concerning the evidence it was required to disclose.

[41] The Tribunal generally presumes that parties act in good faith in the context of the procurement process.[39] The Tribunal should determine if there is evidence on the record to rebut this presumption.

[42] In each of its past complaints, Heiltsuk Horizon argued that PWGSC had displayed bias in favour of ATL and the Tribunal dismissed these bias allegations each time.[40] In a previous application for judicial review, the FCA upheld the Tribunal’s findings on bias.[41] In this complaint (the fifth complaint), Heiltsuk also alleged that PWGSC’s conduct displayed bias in favour of ATL, but the Tribunal dismissed this ground of complaint.[42]

[43] Heiltsuk Horizon has not provided submissions nor submitted evidence to rebut the presumption of good faith and honesty of the public servants involved in the procurement process. Both PWGSC and ATL submitted that PWGSC acted in good faith in carrying out the procurement and its administration of the contract.[43] Email exchanges among officials involved in the evaluation of the substitute ship masters do not contradict these assertions.[44] The Tribunal therefore sees no reason to question the good faith of officials.

(e) To what extent was the contract performed?

[44] The contract was awarded to ATL on August 9, 2018, with an initial expiry date of August 31, 2021.[45] The RFP provided for an initial contract of 36 months with an option to extend the contract up to 7 additional 1‑year periods under the same terms and conditions.[46] In its most recent submission, PWGSC indicated that ATL has performed the contract since 2018.[47]

Remedies requested by Heiltsuk Horizon

[45] Having examined the factors listed in subsection 30.15(3) of the CITT Act, the Tribunal will now consider the remedies sought by Heiltsuk Horizon.

Cancellation of the contract awarded to ATL

[46] Heiltsuk Horizon requested the cancellation of the contract awarded to ATL. Both PWGSC and ATL submit that ATL has been successfully performing the contract since 2018 and that it has, in all respects, dutifully and compliantly carried out its obligations under the contract and has successfully performed the services. They further submit that a termination of the contract would create gaps in these essential services and disrupt the critical work ATL is performing under the contract. PWGSC argued that cutting these services off would have an immediate impact on Canada’s ability to provide emergency towing services and, therefore, to comply with its international and maritime law obligations. It is uncertain whether any of the other bidders would be in a position to provide these services, or whether there is any other company capable of doing so on short notice. According to PWGSC, cancelling the contract would not serve the public interest.

[47] In recommending the appropriate remedy, the Tribunal should consider the operational impact of contract cancellation.[48] The Tribunal typically does not consider it appropriate to recommend the cancellation of the contract when the execution of the contract is well underway or has already been substantially performed and it is therefore no longer realistic to consider terminating the contract.[49] Similarly, the Tribunal has previously declined to recommend the cancellation of the contract for operational reasons.[50] Moreover, in Bureau d’études stratégiques et techniques en économique v. Canadian International Development Agency, the Tribunal found that it could not recommend the cancellation of the contract because the complainant was not the next highest‑ranked bidder.[51]

[48] The Tribunal considers it unjustified to cancel the contract awarded to and performed by ATL, especially given the advanced stage of the execution of the contract and the concerns associated with any interruption in the provision of this essential service. As noted before, even if PWGSC had applied the terms of the RFP correctly and if the results of this verification had shown that the ship masters proposed as substitutions did not meet the requirements of section 7.46 of the RFP, ATL would have likely reverted to its originally proposed ship masters and would have retained the contract. In addition, Heiltsuk Horizon’s bid was not the next highest-ranked bid, and a contract would have most likely not been awarded to Heiltsuk Horizon.

[49] That said, and given the impact, although to a limited extent, the breach may have had on the integrity of this procurement process, the Tribunal recommends that PWGSC verify and document that the competencies of the ship masters fully meet the requirements of the RFP prior to any further extension of the current contract. More specifically, the Tribunal invites PWGSC to verify that the ship masters employed or proposed at the time of the next potential extension of the current contract have the necessary qualifications and experience to comply with section 7.46 of the RFP[52] and, accordingly, that they meet or exceed the score obtained by the ship masters originally submitted by ATL.

Compensation for lost opportunity

[50] When recommending compensation, the Tribunal should attempt to place the complainant in the position in which it would have been but for the government’s breach. Compensation for lost opportunity may be awarded in situations where it is not clear who would have won the contract but for the government’s breach. Where the Tribunal is unable to conclude that the complainant would have been awarded the designated contract but concludes that the complainant lost the opportunity to participate actively or meaningfully in the procurement process as a result of the government’s breach or breaches, the Tribunal may recommend that the complainant be compensated for the lost opportunity.[53]

[51] These conditions are not met in the current case. As stated above, the evidence is clear that, even if ATL’s contract had to be cancelled and awarded to the next highest‑ranked bidder, Heiltsuk Horizon’s bid was ranked last of several compliant bids received for this solicitation. Accordingly, its chances to have its bid selected but for PWGSC’s breach were likely to be very small, given that the breach had no impact on the ranking of the bids. Thus, the Tribunal does not consider that Heiltsuk Horizon is entitled to compensation for lost opportunity. This decision disposes of Heiltsuk Horizon’s request for a determination of the quantum of such compensation.

Compensation to be paid by PWGSC to Heiltsuk Horizon to denounce PWGSC’s failure to promote and preserve the integrity of the procurement process

[52] Pursuant to the FCA’s decision in Envoy Relocation, mentioned above, the Tribunal must exercise its powers with a view to, among other things, maintaining potential bidders’ confidence in the integrity of the procurement system.[54]

[53] Compensation for damages to the integrity of the procurement system may be recommended by the Tribunal in exceptional cases, generally if there have been serious prejudice to the procurement system and a lack of good faith in conducting the procurement.[55]

[54] Heiltsuk Horizon requested that the Tribunal award an amount for compensation to reprimand PWGSC for the damage and loss of integrity suffered by the federal procurement system.[56]

[55] PWGSC claimed that there is no basis for the Tribunal to award such compensation and that the Tribunal has previously declined to award any remedy in similar circumstances, where the interests of fairness and efficiency, or the general public’s interest in the integrity and efficiency of the competitive system, are not upset.[57] However, should the Tribunal find that any monetary award is justified, PWGSC submits that the evidentiary record and the findings of the Tribunal and the FCA reflect that only a nominal sum could be supported.

[56] The Tribunal has previously recognized that such compensation to denounce the government institution’s failures should only be granted “in very exceptional circumstances”.[58] For example, the Tribunal previously recommended compensation in Dr. John C. Luik,[59] where the Tribunal found that PWGSC and the Department of Health misled potential suppliers by pretending that a procurement opportunity was still open. However, it was virtually impossible for potential suppliers to participate, as the project was, in fact, almost complete. In that case, the Tribunal considered that the situation “clearly demonstrate[d] a lack of good faith. In the Tribunal’s opinion, it is particularly regrettable that [PWGSC] was involved in these deceptions, given its responsibility to safeguard the efficiency and integrity of the procurement process” (emphasis added).[60]

[57] In Aqua Valley Water, the Tribunal found that there was a lack of openness and transparency in that procurement process, which involved the renewal of a contract for the supply of bottled water to a military base during the COVID-19 pandemic. The Tribunal recommended “a lump sum monetary award payable to Aqua Valley [as it] would signal the importance of ensuring scrupulous fairness to prospective bidders throughout the procurement process”.[61]

[58] A determination of appropriate compensation for damages to the integrity of the procurement system must take into account circumstances specific to a case. As noted above, the breach did not result in a prejudice to Heiltsuk Horizon, and PWGSC’s good faith is not put in question. In this case, the Tribunal finds that the circumstances differ from the ones in Dr. John C. Luik. Although not insignificant, the seriousness of PWGSC’s breach, that is, the improper documentation and justification of the substitution, does not rise to the level described in Dr. John C. Luik, where PWGSC misinformed and deceived potential suppliers.

[59] However, as mentioned above, the Tribunal must consider the importance of maintaining potential bidders’ confidence in the integrity of the procurement system. The lack of application of PWGSC and the CCG’s officials in following the requirements of section 7.46 of the RFP undermined to a certain extent the integrity of this procurement process and undermined potential bidders’ confidence in the integrity of the process. Although the circumstances here differ from those described in Aqua Valley Water, the Tribunal considers it appropriate to recommend that PWGSC pay Heiltsuk Horizon a nominal lump sum amount in recognition of the importance for procuring entities to adhere scrupulously to the terms and conditions they themselves define in RFPs.

[60] In light of the Tribunal’s conclusion that PWGSC’s breach did not change the outcome of the solicitation and did not have a discernible direct impact on the ability of other bidders to compete fairly, but recognizing the obvious error in the application of subparagraph 7.46(a)(ii) of the RFP, the Tribunal considers it appropriate to set this amount at $5,000.

COSTS

Complaint costs

[61] As a general principle, costs usually follow the event.[62] In its previous determination of the complaint, the Tribunal had concluded that each party would bear its own complaint costs, because it found that PWGSC, the winning party, had withheld relevant information and unduly complicated the proceedings.[63] As the FCA has since found the complaint to be valid,[64] the Tribunal has to re‑examine the matter. The Tribunal awards Heiltsuk Horizon its costs for this proceeding as a whole, including the Tribunal’s initial determination and its subsequent recommendation on remedies.

[62] This complaint was complex in nature, being the fifth of a series of successive complaints related to the same solicitation, involving an intervener, numerous procedural communications, withholding of relevant information[65] and further consideration of the remedy issue following the decision of the FCA. In light of these considerations, the Tribunal’s preliminary determination is that the costs of this inquiry fall within Level 3 of the Tribunal’s Procurement Costs Guidelines.

Bid preparation costs

[63] Regarding bid preparation costs sought by Heiltsuk Horizon, the Tribunal may award them pursuant to subsection 30.15(4) of the CITT Act when it considers it reasonable.[66] The Tribunal considers that the circumstances of the case do not warrant granting this remedy. The Tribunal notes that Heiltsuk Horizon sought this remedy in the further alternative to obtaining “compensation to reprimand PWGSC for the damage done to the integrity of the procurement process generally”.[67] As noted previously, Heiltsuk Horizon has not been prejudiced by the breach. Hence, there would seem to be little rationale to award Heiltsuk Horizon its bid preparation costs.

DETERMINATION

[64] Pursuant to the decision of the FCA finding the complaint to be valid, and pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends, as a remedy, that Heiltsuk Horizon be compensated by the lump sum amount of $5,000, which amount is to be paid by PWGSC.

[65] The Tribunal further recommends that PWGSC verify and document that the ship masters to be employed or proposed at the time of the next potential extension of the current contract have the qualifications and the experience that either meet or exceed the score obtained by the ship masters originally submitted by ATL.

[66] Pursuant to section 30.16 of the CITT Act, the Tribunal awards Heiltsuk Horizon its reasonable costs incurred in preparing and proceeding with its complaint, which costs are to be paid by PWGSC.

[67] In accordance with the Procurement Costs Guidelines, the Tribunal’s preliminary indication of the level of complexity for this complaint is Level 3, and its preliminary indication of the amount of the cost award is $4,700. Any party that disagrees with the preliminary level of complexity or the preliminary indication of the cost award is invited to make submissions to the Tribunal, in accordance with article 4.2 of the Procurement Costs Guidelines. The Tribunal reserves jurisdiction to establish the final amount of the cost award.