Canada: Canadian International Trade Tribunal Decisions Are Relevant To All Procurements

Last Updated: July 22 2013
Article by Elizabeth Mayer

The last blog entry introduced the Canadian International Trade Tribunal (CITT). This installment looks in more detail at the approach that the CITT takes to its decisions, focussing on its decisions on the Agreement on Internal Trade.

Compliance with the RFP

Under the Canadian International Trade Tribunal Procurement Inquiry Regulations (SOR/93-602), if the Tribunal decides to conduct an inquiry into a complaint, "it shall determine whether the procurement was conducted in accordance with the requirements set out in [the relevant trade agreement]" (regulation 11). Article 506.6 of the AIT states that "The tender documents shall clearly identify the requirements of the procurement, the criteria that will be used in the evaluation of bids and the method of weighting and evaluating the criteria."  

The CITT interprets its role as ensuring not only that the tender documents contain these provisions, but that the government entity complies with the provisions in the tender documents (in this context, "tender" is not limited to a low price bidding process, but is a generic term for all types of procurement). This role was set out in one of the early decisions on the AIT, AmeriData Canada Limited (File No. PR-95-011) where the Tribunal stated:  

There are two elements to the issue of whether or not the tender documents clearly identified the requirements of the procurement, the criteria that would be used in the evaluation of bids and the method of weighting and evaluating the criteria. First, were the evaluation criteria and their method of application and weighting clearly identified in the tender documents? Second, were the criteria, their method of application and weighting used in the evaluation those that were specified in the tender documentation?

In other words, the question to ask is whether the actual criteria used in the evaluation were different from those set out in the tender documents - which is shown if the government body does not evaluate strictly in accordance with the terms set out in the tender documents. For the bidder, the important thing is to be able to "reasonably predict, in relative terms, what will be rated higher when proposals are evaluated".

Deference to decisions of government bodies

In deciding whether or not the government body has complied with the tender documents, the Tribunal gives deference to the good faith judgment of the evaluation team and does not substitute its judgment on the ranking or scoring of bids, unless "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 conduced the evaluation in a procedurally fair way." (Quoted from Valcom Consulting Group Inc., PR-2013-001.)  

The onus is on the complaining bidder to substantiate its allegations. It is not sufficient simply to set out an alternative score or ranking and claim that because the government ranking is not the same, the government evaluation must have been incorrect (see, for example, Valcom).  

A successful CITT challenge 

An example of a successful challenge can be found in ACMG Management Inc. (File no. PR-2001-056). ACMG challenged the award of a contract to a competitor on the grounds that one of the individuals proposed did not have the relevant qualifications. ACMG knew this because they had recently interviewed the individual in question for another role and therefore had a copy of his résumé. The Tribunal agreed that in one respect the individual did not hold the appropriate qualification - the government had argued that the RFP did not require an actual qualification, but only experience equivalent to the qualification, but the Tribunal disagreed. The Tribunal ordered the contract that had been awarded to ACMG's competitor to be terminated and, if ACMG met all the mandatory requirements, that the contract be awarded to ACMG. If ACMG did not meet the mandatory requirements, the government would have to issue a new RFP.

Strict approach

In carrying out its work, the Tribunal takes a strict approach to the interpretation of RFPs. For example, in a decision from February of this year, Professional Language School (File no. PR-2012-041), the bidder had submitted four copies of the body of its technical proposal, but only one copy of the résumés of the key individuals involved. The CITT held that it was quite clear that the résumés formed part of the technical proposal and that therefore four copies of them were required. The proposal was rejected on the basis of a failure to meet the mandatory conditions, because there were not four copies of the résumés. The CITT upheld this decision.  

Other challenges to procurement decisions

In addition to ruling on whether or not the government has complied with the terms of its procurement documents, the CITT also hears cases dealing with other aspects of the AIT. For example, Article 504.3(b) prohibits "the biasing of technical specifications in favour of, or against, particular goods or services, including those goods or services included in construction contracts, or in favour of, or against, the suppliers of such goods or services for the purpose of avoiding the obligations of this Chapter".  

In 723186 Alberta Ltd. (File No. PR-2011-028) a challenge was brought to an RFP for translation services. The challenger claimed that requiring proponents to offer translation both from English to French and French to English created a bias in favour of larger organizations that maintain a number of staff or sub-contract their services to others. The challenger was a smaller company, specializing in French to English translations.  

The CITT stated that the government is entitled to "define and satisfy its legitimate operational requirements", provided it does so "reasonably". Further, the government does not need to accommodate any particular supplier and the fact that certain bidders have competitive advantages over others does not necessarily mean that the procurement is biased. This is simply part of doing business. The Tribunal noted that "as long as a procurement is not deliberately constructed to preclude certain suppliers or to direct the procurement to a favoured supplier, a government institution may choose to procure a combination of services by way of a single solicitation, even though this may have the effect of excluding some suppliers". As a result, the challenge in this case failed.  

Lessons for procurement professionals from the CITT

Although the decisions of the CITT are taken within a particular statutory framework, the basic concept of compliance with the RFP is relevant to any procurement exercise. The specific examples of cases decided by the CITT can be useful as precedents in a dispute and as guidance in drafting RFPs.  

This blog will provide an update on decisions from the CITT as a regular feature.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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