Bid Challenge in Canada and the Impact on Public Procurement

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HEGGART 1254In <strong>the</strong> Polaris case, a manufacturer of small watercraft (Rigid HullInflatable Boats) compla<strong>in</strong>ed that despite be<strong>in</strong>g issued one of <strong>the</strong>st<strong>and</strong><strong>in</strong>g offers, <strong>the</strong>y had not received a s<strong>in</strong>gle order even though manysuch craft had been purchased from <strong>the</strong>ir competitor. While <strong>the</strong>yrecognized that <strong>the</strong>re was no guarantee of work through <strong>the</strong> st<strong>and</strong><strong>in</strong>goffer, <strong>the</strong>y suspected that hidden criteria were be<strong>in</strong>g applied to choose<strong>the</strong> company that would get to supply <strong>the</strong> goods. After its <strong>in</strong>quiry, <strong>the</strong>Tribunal found that, <strong>in</strong>deed, unannounced criteria were be<strong>in</strong>g used.While <strong>the</strong> product chosen may well have reflected <strong>the</strong> government’slegitimate needs, <strong>the</strong> Tribunal determ<strong>in</strong>ed that <strong>the</strong> st<strong>and</strong><strong>in</strong>g offer did notproperly set out <strong>the</strong> criteria govern<strong>in</strong>g <strong>the</strong> selection of <strong>the</strong> suppliers <strong>and</strong>,consequently, <strong>the</strong> award of <strong>the</strong> result<strong>in</strong>g contracts. Pursuant to thisdecision, <strong>the</strong> selection of suppliers from st<strong>and</strong><strong>in</strong>g offers has becomeconsiderably more transparent. This is achieved by <strong>in</strong>clud<strong>in</strong>g <strong>the</strong>parameters for select<strong>in</strong>g a supplier from a st<strong>and</strong><strong>in</strong>g offer. One methodcurrently employed <strong>in</strong>volves rank<strong>in</strong>g <strong>the</strong> suppliers <strong>and</strong> requir<strong>in</strong>g thatdepartments follow <strong>the</strong> order of <strong>the</strong> rank<strong>in</strong>g when mak<strong>in</strong>g purchasesus<strong>in</strong>g <strong>the</strong> st<strong>and</strong><strong>in</strong>g offer.DEFINING CLARIFICATIONS AND MODIFICATIONSPerhaps one of <strong>the</strong> most <strong>in</strong>terest<strong>in</strong>g evolutions or ‘<strong>in</strong>-progress’changes <strong>in</strong> Canadian government procurement s<strong>in</strong>ce bid challenge began,has been <strong>the</strong> def<strong>in</strong>ition of what constitutes a ‘clarification’ versus a‘modification’ while a procurement action is <strong>in</strong> progress.In 1995, <strong>the</strong> Tribunal received a compla<strong>in</strong>t from a company <strong>in</strong>volved<strong>in</strong> a very complicated procurement to buy un<strong>in</strong>terruptible power suppliesfor <strong>in</strong>-flight air traffic control centers, a very important need for <strong>the</strong>safety of air travelers. The case, Mecron Energy Ltd. (PR-1995-001),revolved around just how far procur<strong>in</strong>g officials could go whenattempt<strong>in</strong>g to underst<strong>and</strong> or clarify what <strong>the</strong>y perceived to be <strong>the</strong> w<strong>in</strong>n<strong>in</strong>gbid. 9 In this case, <strong>the</strong> Tribunal found that by seek<strong>in</strong>g <strong>in</strong>formation from asupplier that ultimately was used to modify or supplement <strong>the</strong> supplier’sproposal; <strong>the</strong> procur<strong>in</strong>g department overlooked, varied or put aside <strong>the</strong>evaluation rules. Thus, <strong>the</strong> procur<strong>in</strong>g entity improperly declaredcompliant a proposal which, at <strong>the</strong> time of bid open<strong>in</strong>g, failed to meet <strong>the</strong>m<strong>in</strong>imum requirement.
BID CHALLENGE IN CANADA AND THE IMPACT ON PUBLIC PROCUREMENT 1255The Tribunal agreed that a procur<strong>in</strong>g department could, after bidopen<strong>in</strong>g, seek, receive <strong>and</strong> take <strong>in</strong>to consideration clarifications frombidders <strong>in</strong> f<strong>in</strong>aliz<strong>in</strong>g its evaluation of <strong>the</strong> proposals. However, <strong>the</strong>Tribunal emphasized that it is important to have a clear underst<strong>and</strong><strong>in</strong>g asto what constitutes a clarification. The Tribunal def<strong>in</strong>ed a clarification as“an explanation of some exist<strong>in</strong>g aspect of a proposal that does notamount to a substantive revision or modification of <strong>the</strong> proposal.” 10After <strong>the</strong> above decision, <strong>the</strong> government conducted a significantreview of its policies <strong>and</strong> procedures. It also ensured its procur<strong>in</strong>gofficials were fully tra<strong>in</strong>ed <strong>and</strong> understood <strong>the</strong> implication of thisdecision. Evidence can be found <strong>in</strong> a case that came before <strong>the</strong> Tribunal<strong>in</strong> 2004, Bell Mobility PR-2004-004. In <strong>the</strong> Bell Mobility case, <strong>the</strong>procur<strong>in</strong>g department declared a bid non-compliant to <strong>the</strong> requirementsafter it had sought clarification of <strong>the</strong> supplier’s proposal. Thedepartment determ<strong>in</strong>ed that <strong>the</strong> <strong>in</strong>formation it received <strong>in</strong> response to itsquestions of clarification would have substantially modified <strong>the</strong>supplier’s proposal. The Tribunal agreed with <strong>the</strong> government <strong>and</strong> foundthat <strong>the</strong> supplier had attempted to make a revision to its proposal <strong>in</strong>response to <strong>the</strong> request for clarification. The case was determ<strong>in</strong>ed <strong>in</strong>favour of <strong>the</strong> government.TECHNICAL SPECIFICATIONSThe way a technical specification is written can be vital to <strong>the</strong>openness <strong>and</strong> fairness of a public procurement. In 1990 a compla<strong>in</strong>t filedwith <strong>the</strong> Procurement Review Board (H.J. Reis International, Ltd.D90PRF6601-021-0001) began an evolution of improvement to <strong>the</strong>specification writ<strong>in</strong>g process <strong>in</strong> <strong>Canada</strong>. A supplier of farm tractors wasattempt<strong>in</strong>g to compete for <strong>the</strong> right to lease a tractor to Agriculture<strong>Canada</strong> for three years. The technical specification named a specificbr<strong>and</strong> of tractor <strong>and</strong> <strong>in</strong>cluded <strong>the</strong> words “no substitute.” The supplier thatcompla<strong>in</strong>ed sold tractors but of a different br<strong>and</strong>. A br<strong>and</strong> it argued wasequivalent to <strong>the</strong> br<strong>and</strong> specified. While <strong>the</strong> Board did not pronounce on<strong>the</strong> equivalency of <strong>the</strong> tractors (a determ<strong>in</strong>ation better left <strong>in</strong> <strong>the</strong> h<strong>and</strong>s of<strong>the</strong> technical experts), <strong>the</strong> Board did decide that <strong>the</strong> specifications werenot <strong>in</strong> conformity with <strong>the</strong> rules of <strong>the</strong> applicable trade agreementsbecause a particular trade name was <strong>in</strong>dicated <strong>and</strong> <strong>the</strong> words “orequivalent” were not <strong>in</strong>cluded.
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Bid Challenge in Canada and the Impact on Public Procurement

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