So far this blog has been largely focussed on a contractual analysis of the procurement process - the Contract A/Contract B analysis and the degree to which terms can be implied into Contract A.
Metercor Case
The 2011 BC case of Metercor Inc. v. Kamloops shows a different way for a disgruntled bidder to challenge a procurement decision that has gone against them. In this case, the City of Kamloops issued a request for proposals for the installation of water meters. The unsuccessful proponent (CMI) brought an action for judicial review of the City's decision to enter into negotiations with the successful proponent (Neptune).
The RFP set out a two-stage evaluation process. Proposals were first scored for their technical merits and only those proposals that scored at least 75% on this basis (56.25 marks) went on to be assessed on the basis of price. Neptune was the only proponent who scored over 75% and was therefore the only proponent whose price was considered and became the preferred proponent by default. The fact that proposals would be evaluated on this basis was set out in the RFP and the court held that the City fully complied with the RFP in this respect and had treated all bidders fairly and equally in the evaluation. However, the court held that the decision to use this form of two-stage evaluation process was in itself unreasonable.
The City's procurement policy stated that "price and quality are major considerations." The court concluded that imposing a cut-off below which price was not considered resulted in eliminating price entirely from the decision-making process. They gave an example of a proponent who scored 55 marks for quality, but who gained 25 marks on price, as against a proponent who scored 57 marks on quality, but 10 marks on price. In the court's view, eliminating the proponent with a total score of 80 marks in favour of a proponent with a total score of 67 marks was unreasonable. It was therefore unreasonable for the City to create a procurement process that had the potential to give rise to this result. The court remitted the matter back to the evaluation committee, requiring them to consider the prices submitted by all proponents. Interestingly, it is unlikely that CMI would be any better off with this result – their technical score was 38.53, against 67.68 for Neptune and 47.18 for the third proponent. Even if CMI scored 25 points on price and Neptune zero points, Neptune would still score higher than CMI.
The Challenge
This decision raises a different challenge for public sector procuring bodies. On the Contract A/Contract B analysis, the main challenge is to ensure that you comply with the provisions in the RFP, treat all proponents fairly and equally and without bias. However, with a judicial review challenge, a proponent could submit a proposal and, if it is unsuccessful, challenge the whole basis of the RFP. Establishing evaluation criteria is often a challenging process – how to weigh quality against price, which aspects of quality should have more or less weight and so on.
Practice Point
This case therefore underlines the need to run a "sense-check" of the evaluation criteria before sending out the RFP. What will happen if bids are submitted on widely differing bases? Do the criteria have the potential to produce an undesirable or unreasonable result? Carrying out this check in advance would assist in rebutting any subsequent challenge from the inevitably disgruntled losing proponents.
The next in this series of blogs will look at an alternative method of challenging federal procurement decisions - using the Canadian International Trade Tribunal.
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