File PR-2022-059 1568796 Ontario Inc., O/A Renokrew

Decision made Tuesday, January 17, 2023   Decision and reasons issued Tuesday, January 31, 2023

 

IN THE MATTER OF a complaint filed pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act.

BY

1568796 ONTARIO INC., O/A RENOKREW

AGAINST

DEFENCE CONSTRUCTION (1951) LIMITED

 

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.

STATEMENT OF REASONS

[1] Subsection 30.11(1) of the Canadian International Trade Tribunal Act[1] (CITT Act) provides that, subject to the Canadian International Trade Tribunal Procurement Inquiry Regulations[2] (Regulations), 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 must decide whether to conduct an inquiry into the complaint.

SUMMARY OF THE COMPLAINT

[2] The present complaint arises from a request for proposal (RFP) (solicitation PA061752) issued by Defence Construction (1951) Limited, which is also known as Defence Construction Canada (DCC),[3] for the construction of a building in Petawawa, Ontario.

[3] The complainant, 1568796 Ontario Inc., O/A Renokrew (Renokrew), submitted a bid before the solicitation closing date. Renokrew’s bid was disqualified because DCC claimed that Renokrew’s bid bond did not identify the project for which the bond was issued.

[4] Renokrew mainly contends, in its complaint, that DCC improperly evaluated its bid, which ultimately led to it being rejected. In support of its position, Renokrew first argues that DCC evaluated its bid based on a hidden and unnecessary criterion. In that regard, Renokrew takes issue with the fact that DCC’s reasons to reject its bid, that is, the lack of information in the bond, was based on a requirement that was unspecified and superfluous. Renokrew further claims that DCC failed to exercise its discretion under the terms of the RFP to allow it to correct the minor irregularity contained in its bond. On this basis, Renokrew argues that DCC’s decision to disqualify Renokrew’s bid was a direct violation of the trade agreements.[4]

[5] Moreover, Renokrew stresses that its complaint concerns an aspect of the procurement process of a systemic nature and that it should be granted the extended delay provided under subsections 6(3) and (4) of the Regulations for the filing of its complaint with the Tribunal.

[6] As a remedy, Renokrew requests that the designated contract be terminated and that it be awarded the contract. In the alternative, Renokrew seeks compensation for lost profits, as well as complaint costs.

[7] The Tribunal has decided not to conduct an inquiry into this complaint given that the complaint is time-barred.

BACKGROUND

[8] On November 8, 2022, the solicitation in question was issued with a bid closing date of December 13, 2022.[5]

[9] Renokrew submitted its bid on or before the bid closing date.[6]

[10] On December 20, 2022, Renokrew received a regret letter from DCC advising that its bid was deemed non-compliant because “[t]he bond submitted ... [did] not identify the project for which the bond was issued, limiting the enforceability of the bond”.[7]

[11] The same day, Renokrew submitted to DCC, by way of email, correspondence from its bond company confirming the validity and enforceability of the original bond, as well as an amended bond with the supplemental information requested by DCC.[8]

[12] On December 22, 2022, DCC sent an email to Renokrew stating that it had maintained its determination that the bid was non-compliant. Accompanying the email was a letter in which DCC indicated that it could not consider the supplemental information or the revisions that were provided outside the electronic bidding system, as doing so would be prejudicial to other tenderers.[9]

[13] Renokrew responded to DCC the same day and expressed concerns regarding DCC’s response, raised several questions as to the decision process and requested that a conference call be scheduled to discuss the matter.[10]

[14] On December 23, 2022, DCC advised Renokrew that its determination was finalized, that it considered the matter closed and that it would not be participating in further discussions.[11]

[15] On January 13, 2023, Renokrew filed a complaint with the Tribunal.[12]

ANALYSIS

[16] 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;

 

• (ii)the complainant is a potential supplier;

 

• (iii)the complainant is in respect of a designated contract; and

 

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

[17] For the reasons that follow, the Tribunal finds that the complaint is time-barred, as it was not filed within the time limits prescribed by section 6 of the Regulations. Renokrew did not demonstrate, to the satisfaction of the Tribunal, that it should be granted the 30-day time limit provided under subsections 6(3) and (4) of the Regulations for the filing of its complaint with the Tribunal.

[18] On this basis, while the Tribunal is of the view that the other conditions to initiate an inquiry are met, it finds that the first condition is not. Accordingly, the Tribunal cannot accept the complaint for inquiry.

The complaint is time-barred

[19] It is well established that, in procurement matters, time is of the essence and potential suppliers must be vigilant and react as soon as they become aware or reasonably should have become aware of a flaw in the process. The functional importance of the limitation periods inherent in the procurement regime has been underlined by the Federal Court of Appeal, in IBM Canada Ltd. v. Hewlett Packard (Canada) Ltd.[13] as follows:

[18] In procurement matters, time is of the essence. The time limits for the filing of a complaint are governed by section 6 of the Regulations. Subsection 6(1) requires potential suppliers to file complaints “not later than ten working days after the day on which the basis of the complaint became known or reasonably should have become known” to them (my emphasis). Subsection 6(2) provides for the delivery of formal objections to the contracting authority within ten working days of the potential suppliers knowing or having objective knowledge of the basis for an objection. If an objection is made, then the ten-day time limit in subsection 6(1) to complain is extended to a further ten working days from the time that a written answer is given to the objection.

...

[20] Complaints, on the other hand, may be filed “concerning any aspect of the procurement process that relates to a designated contract” (ss. 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C. 1985 (4th Supp.), c. 47). Therefore, potential suppliers are required not to wait for the attribution of a contract before filing any complaint they might have with respect to the process. They are expected to keep a constant vigil and to react as soon as they become aware or reasonably should have become aware of a flaw in the process. The whole procurement process, as is illustrated by the Question and Answer method which ensures that potential suppliers equally know at all times what conditions have to be met, is meant to be as open as it is meant to be expeditious. It is focussed on achieving finality of contracts in the best possible time.

[21] The Tribunal has made it clear, in the past, that complaints grounded on the interpretation of the terms of an RFP should be made within ten days from the moment the alleged ambiguity or lack of clarity became or normally ought to have become apparent.

[Underlining in original]

[20] As outlined in the passage above, subsections 6(1) and (2) of the Regulations provide the general rule that 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.[14] In the case where a timely objection was raised to the relevant government institution, the complaint must be filed 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”.[15]

[21] In the matter at hand, the Tribunal considers that Renokrew became aware of its grounds of complaint when it received the regret letter from DCC on December 20, 2022. Given that Renokrew raised an objection with DCC on December 20 and 22, 2022,[16] it was required to file a complaint with the Tribunal within 10 working days of receipt of a denial of relief from DCC.

[22] The Tribunal finds that Renokrew was denied relief on December 23, 2022. While DCC did not fully address the grievances outlined in Renokrew’s objection, DCC did send an email to Renokrew indicating that it considered the matter closed,[17] which, in the view of the Tribunal, constitutes a denial of relief for the purposes of subsection 6(2) of the Regulations.

[23] Accordingly, Renokrew would have been required to file its complaint with the Tribunal by January 11, 2023,[18] at the latest, to comply with the 10-working-day time limit provided under subsection 6(2) of the Regulations. On that basis alone, the Tribunal finds that Renokrew’s complaint, having been filed on January 13, 2023, was filed outside the time limits found in subsection 6(2) of the Regulations.

The complaint does not raise an issue of a systemic nature

[24] This brings us to the question of whether Renokrew can benefit from the extended deadline provided under subsections 6(3) and (4) of the Regulations, in which case, Renokrew’s complaint would be considered filed in a timely manner.

[25] Subsections 6(3) and (4) of the Regulations extend the deadline for the filing of a complaint to 30 days where the failure to file was either “attributable to a cause beyond the control of the potential supplier”[19] or where “the complaint concerns any aspect of the procurement process, of a systemic nature, relating to a designated contract, and compliance with one or more” [our emphasis] of the trade agreements.[20] It bears noting that the Tribunal’s authority to extend the ten-working-day time limit to a 30-day time limit is of exceptional nature, given that time is of the essence in procurement matters.[21]

[26] Renokrew did not advance any arguments, in its complaint, claiming that the delay in filing a late complaint was attributable to a cause beyond its control. Rather, Renokrew argues that its complaint concerns an aspect of the procurement process of a systemic nature. Put differently, Renokrew stresses that “DCC’s [b]reaches are a [s]ystemic [i]ssue”.[22]

[27] Renokrew raised various arguments in support of its position. It claims, among other things, that the RFP requirements at issue all derive from the Standard Construction Contract Documents for Electronic Bidding[23] (SCCDEB), which comprises standard forms used repeatedly by DCC in numerous solicitations and contains a set of requirements of general application. Renokrew further claims that the bid bond template provided is one of general application and that, as a result, a misunderstanding or misapplication of the requirements of the template can have far-reaching impacts across numerous solicitations. Additionally, it claims that DCC’s interpretation of its power to waive or correct irregularities could have a systemic impact on all bids where corrections are required. Finally, it claims that DCC’s failure to properly apply its discretion in seeking corrections or clarifications or permitting them to be submitted outside of the electronic bidding system is an error of jurisdiction and represents a broader systemic issue.[24]

[28] Having considered the matter, the Tribunal finds that Renokrew did not demonstrate, to the satisfaction of the Tribunal, that the issues outlined in the complaint are of a systemic nature. The Tribunal has previously held that issues arising from a complaint were not systemic where the evidence did not demonstrate that “the procurement action is the result of a general policy or a regular and continuous practice that pertains to the broader procurement system.”[25]

[29] In the view of the Tribunal, DCC’s decision to reject Renokrew’s proposal is the result of DCC’s assessment of the content of Renokrew’s proposal (against the RFP requirements) and the shortcomings of that proposal, rather than reflecting a general policy or a regular or continuous practice that is widely applicable to the broader procurement system. There is simply no evidence in the record that would lead the Tribunal to believe otherwise, nor is there any evidence that the problems encountered by Renokrew were encountered by other bidders. The mere existence of standardized documents or terms does not, in and of itself, demonstrate issues of a systemic nature.

[30] Furthermore, aside from Renokrew’s general allegations that DCC’s breaches are a systemic issue, Renokrew has not pointed to a regular or continuous practice of concern rising to the level of a systemic issue. In addition, the Tribunal was not able to find, in past procurement matters adjudicated before it, a common occurrence of issues or a continuous practice where bid bonds were deemed unresponsive or rejected by a procuring entity under similar circumstances (i.e. lack of information or description in a bid bond). Each matter was case-specific and turned on its own specific facts.[26] This, again, does not assist Renokrew’s claim that its complaint concerns an aspect of the procurement process of a systemic nature. The Tribunal simply fails to see how the issues raised in Renokew’s complaint are of a systemic nature, given notably that they are unique and highly fact-specific to the circumstances encountered by Renokrew.

[31] Finally, with regard to Renokrew’s arguments relating to DCC’s interpretation of its power to waive or correct irregularities or its failure to exercise its discretion, the Tribunal notes that section 8.5 of the Instructions to Tenderers for Electronic Bidding – DCL193E in the SCCDEB[27] provides that DCC may waive or cause to be corrected minor irregularities “at its sole discretion”, where it is satisfied that the variation between the tender and the exact requirements set out in the tender documents could be corrected or waived without being prejudicial to other bidders. It bears noting that the Tribunal has generally refused to impose an obligation on government institutions to seek clarification or verification from bidders during the conduct of an evaluation.[28] In light of these findings and well-established principles, the Tribunal fails to see how these claims are of a systemic nature.

[32] For these reasons, the Tribunal finds that Renokrew’s complaint was not filed within the time limit set out in section 6 of the Regulations. For reasons only known to itself, Renokrew filed a late complaint. Unfortunately, the complaint is time-barred and, therefore, cannot be further considered.

DECISION

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