Procurement

Determinations

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TABLE OF CONTENTS

• DETERMINATION OF THE TRIBUNAL
• STATEMENT OF REASONS
• • COMPLAINT
  • PROCUREMENT PROCESS
  • • Background
    • Procurement
  • POSITION OF PARTIES
  • • PWGSC's Position
    • COGNOS's Position
  • TRIBUNAL'S DECISION
  • DETERMINATION OF THE TRIBUNAL

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Ottawa, Wednesday, February 20, 2002

File No. PR-2001-036

IN THE MATTER OF a complaint filed by COGNOS Incorporated under subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C. 1985 (4th Supp.), c. 47;

AND further to a decision to conduct an inquiry into the complaint under subsection 30.13(1) of the Canadian International Trade Tribunal Act.

DETERMINATION OF THE TRIBUNAL

Pursuant to subsection 30.14(2) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal determines that the complaint is valid in part.

Pursuant to subsections 30.15(2) and (3) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal recommends, as a remedy, that the Department of Public Works and Government Services cancel Solicitation No. 19200-000572/B and issue a new solicitation in accordance with this determination and the provisions of the applicable trade agreements.

Pursuant to subsection 30.16(1) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards COGNOS Incorporated its reasonable costs incurred in preparing and proceeding with the complaint.

Michel P. Granger
Michel P. Granger
Secretary
 
 

Date of Determination and Reasons:	February 20, 2002
Tribunal Member:	James A. Ogilvy, Presiding Member
Investigation Officer:	Paule Couët
Counsel for the Tribunal:	Reagan Walker
Complainant:	COGNOS Incorporated
Counsel for the complainant:	Ronald D. Lunau
Government Institution:	Department of Public Works and Government Services
Counsel for the Government Institution:	David M. Attwater

 
 

STATEMENT OF REASONS

COMPLAINT

On October 26, 2001, the Canadian International Trade Tribunal (the Tribunal) received a complaint from COGNOS Incorporated (COGNOS) concerning the procurement (Solicitation No. 19200-000572/B) by the Department of Public Works and Government Services (PWGSC), on behalf of the Department of Justice, of an executive information system (EIS) comprising a Balanced Scorecard ¹ management information system adapted to the specific needs of the Department of Justice and an industry-accepted on-line analytic processing (OLAP) platform for accessing and analyzing existing corporate data.

COGNOS alleged that, contrary to the Agreement on Internal Trade, ² the North American Free Trade Agreement ³ and the Agreement on Government Procurement, ⁴ PWGSC included requirements in the Request for Proposal (RFP) that favoured the product of a particular supplier, Hyperion Solutions Corporation (Hyperion), and, consequently, discriminated against other suppliers' products, including those of COGNOS. More specifically, COGNOS alleged that the RFP included discriminatory and biased requirements and that the actions and statements made by officials of the Department of Justice gave rise to a reasonable apprehension that this procurement process was biased towards the selection of the supplier favoured by the Department of Justice. COGNOS concluded that the outcome of the solicitation was predetermined.

COGNOS requested, as a remedy, that the RFP be cancelled and that a new solicitation be issued in accordance with the trade agreements. In addition, COGNOS requested that it be compensated in accordance with section 30.15 of the Canadian International Trade Tribunal Act ⁵ and that it be awarded its costs incurred in preparing and proceeding with this complaint.

On October 31, 2001, the Tribunal informed the parties that the complaint had been accepted for inquiry, as it met the requirements of subsection 30.11(2) of the CITT Act and the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations. ⁶ That same day, the Tribunal issued an order postponing the award of any contract in relation to the solicitation until the Tribunal determined the validity of the complaint. On November 26, 2001, PWGSC filed a Government Institution Report (GIR) with the Tribunal in accordance with rule 103 of the Canadian International Trade Tribunal Rules. ⁷ On December 10, 2001, COGNOS filed comments on the GIR with the Tribunal. On December 12, 2001, PWGSC requested permission to file a reply to COGNOS's comments on the GIR. On December 19, 2001, PWGSC filed additional comments and, on December 27, 2001, COGNOS filed final comments.

Given that there was sufficient information on the record to determine the validity of the complaint, the Tribunal decided that a hearing was not required and disposed of the complaint on the basis of the information on the record.

PROCUREMENT PROCESS

Background

In early 2000, officials of the Department of Justice met with officials of several other government departments to investigate performance measurement systems. The Department of Justice determined that the Canada Customs and Revenue Agency (CCRA) was the most advanced in implementing the concepts of a performance measurement system within a government organization and that it had developed a viable prototype using Hyperion software, which uses Balanced Scorecard. The original selection by the Department of Justice of the Hyperion software for its proof-of-concept testing or pilot project was made in the spring of 2000 based on the experience of the CCRA with the Balanced Scorecard methodology. The goals of the pilot project were to determine whether a Balanced Scorecard methodology, supported by commercially available off-the-shelf software, could meet the business needs of the Department of Justice and to forecast resource requirements for full implementation.

On June 27, 2000, the Department of Justice and Hyperion entered into a professional services contract, valued at less than $25,000, by which Hyperion delivered professional services and provided a temporary licence for the software.

According to the GIR, subsequent to the pilot project, PWGSC issued Solicitation No. 19200-000572/A (the original solicitation) on March 12, 2001. On April 2 and 4, 2001, COGNOS raised an issue with PWGSC concerning certain mandatory requirements of the original solicitation. Specifically, COGNOS objected to the mandatory requirement for certification by Balanced Scorecard Collaborative, Inc. ⁸ (BSCol) and the requirement that the OLAP solution allow Link Reporting Objects (LROs).

On April 10, 2001, PWGSC and the Department of Justice met with COGNOS. At that time, PWGSC asked COGNOS to submit its concerns in writing so that they could be addressed by means of a solicitation amendment. Subsequent to the meeting, COGNOS wrote to PWGSC and identified several areas of concern with the original statement of work (SOW). In addition to the two issues mentioned above, COGNOS requested further details with respect to sections 2.1.2.1, 2.1.2.3 and 2.1.4 of the original SOW.

By amendment No. 002, dated May 2, 2001, PWGSC amended the original solicitation by removing the BSCol certification as a mandatory requirement and, instead, made mandatory the provision of evidence that a proposed performance measurement system supported the Balanced Scorecard Functional Standards^TM. In addition, the requirement for LROs was removed. As well, answers 24, 25 and 26 in amendment No. 002 addressed COGNOS's queries in relation to the above-mentioned sections of the original SOW. According to the GIR, COGNOS raised no further concerns, nor did it make any new objection to the original SOW before bid closing on May 29, 2001. However, COGNOS continued to ask questions, which were answered by means of seven solicitation amendments.

On May 15 and 16, 2001, the Performance Planning Exchange Results Based Management Conference (the Conference) was held in Ottawa, Ontario. On May 15, 2001, the Department of Justice presented the results of its pilot project with the Balanced Scorecard performance management system. On June 8, 2001, COGNOS alleged, by e-mail to the Assistant Deputy Minister, Supply Operations, PWGSC, that the original solicitation was "targeted for a specific vendor". Specifically, COGNOS alleged that the amended mandatory requirements of the original solicitation requested so many details with respect to specific functionality that they almost became mandatory questions. In addition, COGNOS directed certain allegations against the May 15, 2001, presentation by the Department of Justice.

Four bids were received in response to the original solicitation, including one from COGNOS. By e-mail dated July 12, 2001, clarification questions were asked of COGNOS, specifically, where, in the bid, the technical evaluation team could locate a clear demonstration of how COGNOS addressed certain mandatory requirements. On August 21, 2001, PWGSC advised COGNOS that its bid was non-compliant with sections 2.1.1 and 2.1.2 of the original SOW due to the inadequacy of information in the bid to demonstrate compliance with these mandatory requirements. All bids were eventually declared non-compliant.

At a debriefing held on September 4, 2001, COGNOS indicated that, if PWGSC continued the review of its proposal with the on-site demonstration permitted by the original solicitation, any remaining questions about COGNOS's proposal would be answered. However, in accordance with section D2.0 of the original solicitation, PWGSC declined to conduct the on-site demonstration.

Procurement

On October 2, 2001, PWGSC posted Solicitation No. 19200-000572/B on MERX. ⁹ On the same day, COGNOS downloaded the RFP from MERX. The RFP closed on October 29, 2001. No bidder requested an extension of the bid closing date.

On October 17, 2001, COGNOS objected to the RFP on the basis that there was a predetermined outcome, that the RFP was basically the same as in the original solicitation, that the combination of testing software in a "black box" environment and the users' skills in only one vendor solution would result in only one possible conclusion and that the Department of Justice should issue a separate solicitation to satisfy its requirement for extraction, transformation, and load (ETL) software. On October 19, 2001, PWGSC dismissed the objection, stating that significant steps to broaden the requirements had been taken and that improvements had been made in the RFP that took into account COGNOS's concerns.

The following provisions of the RFP and related SOW are relevant to this case.

Section D2.0 reads, in part:
Evaluation Criteria
Upon receipt of all vendor proposals, a preliminary evaluation will first be conducted to determine whether the vendors have responded to the mandatory items as stated in the Request for Proposal Document. The vendors that have not responded to one or more of the mandatory items shall be eliminated automatically. Following this compliance check, the proposal evaluation will be considered for further evaluation as per the criteria stated below.
Section D2.0 1) reads, in part:
The first step in this process shall be to determine the compliance of each bid, on a pass or fail basis, with all of the mandatory requirements stated in the Request for Proposal. All mandatory requirements must be fully met before a proposal will be considered further. Bids received that do not clearly provide evidence of compliance to the mandatory requirements as specified in Section 2.1.1.1 in the SOW will be deemed non-compliant.
Section 2.1 of the SOW reads, in part:
The selected EIS/Portal System will be an integral component of the DOJ [Department of Justice] management information environment. Technically, it must be consistent with the corresponding DOJ information management environment. This environment requires that the selected system be web enabled, intranet-based using the DOJ WAN (i.e.: TCP/IP-based Wide Area Network) and the EIS/Portal server.
Section 2.1.1.1 of the SOW reads:
In order to support the evaluation of bids vendors must provide a reference to the page/paragraph number in their bid that provides evidence of how they have met each of the requirements described in section 2.1 of this SOW. As a minimum, evidence of compliance for each requirement must include:

· identification of the commercial software packages used;
· description of how these commercial software packages are to be configured and linked together to operate as a single solution;
· copies of the commercial software screens and reports associated with the requirement; and,
· provision of references to page numbers and sections in the commercial software manuals showing clearly that a requirement has been met (product manuals must be provided with the vendor bid).

Section 2.1.2.1 of the SOW reads:
Vendors must either provide evidence that their performance management scorecard is certified by the [BSCol] or provide evidence as specified in section 2.1.1.1 of this SOW that their scorecard satisfies the functional requirements specified by the [BSCol]. Vendors who are [BSCol] certified are deemed to have met this mandatory requirement. DOJ evaluators will confirm Vendor provided evidence of [BSCol] certification.
Vendors who are not certified by the [BSCol] must clearly demonstrate functional equivalency to [BSCol] certification, which is found at www.bscol.com/bscoldata/Standardsv10a.pdf.

Sections 2.1.2.1.1 to 2.1.2.1.4 of the SOW set out requirements (in respect of sections 5.1 to 5.4 inclusively) of the previously referenced BSCol Balanced Scorecard Functional Standards^TM that must be met by vendors not certified by BSCol.

COGNOS filed its complaint with the Tribunal on October 26, 2001.

POSITION OF PARTIES

PWGSC's Position

PWGSC submitted that, because COGNOS did not object to the bidding period of the RFP, subsection 6(1) of the Regulations determined the time limit within which COGNOS could complain to the Tribunal about the length of the bidding period. Therefore, COGNOS had 10 working days after becoming aware of the bidding period to complain to the Tribunal on this ground. Since COGNOS became aware of the bidding period on October 2, 2001, when it received the RFP, and since it complained to the Tribunal 17 working days after receiving the RFP, PWGSC submitted that COGNOS was out of time to complain about the bidding period.

In the alternative, PWGSC submitted that the 27-day bidding period was consistent with the trade agreements. Specifically, PWGSC argued that, in the circumstances, the bidding period was reasonable, as required by Article 506(5) of the AIT. Furthermore, PWGSC submitted that, pursuant to Article 1016(2)(a) of NAFTA, it had the right to derogate from the time limits imposed in Article 1012 of NAFTA and that the fact that it allowed for competition in the RFP did not impair its right to use limited tendering procedures and a 27-day bidding period.

PWGSC submitted that the Department of Justice had the right to purchase a Balanced Scorecard management system that supports specific functional standards. In this context, it asserted that "Balanced Scorecard" is a generic term that describes a generic management approach. No software developer or vendor has a monopoly on the Balanced Scorecard methodology or the functional standards that the Balanced Scorecard may support.

Citing various Tribunal determinations ¹⁰ in support of its position, PWGSC submitted that requiring the Balanced Scorecard that supports the same functional standards required by BSCol for certification in no way favours Hyperion or any other vendor. Certification is not a mandatory requirement of the RFP, and the Department of Justice is not requesting a particular solution by brand name. Furthermore, PWGSC submitted that the mandatory requirements were not written around any particular product. Rather, they were the same as the basic functional standards adopted by BSCol for certification of software applications. In addition, PWGSC submitted that requiring the Balanced Scorecard that supports basic functional standards does not limit competition contrary to the trade agreements.

PWGSC argued that, in order to establish that a proposal delivers the minimum mandatory functional requirements, the RFP provides bidders with the option of adducing evidence of BSCol certification or evidence that the software satisfies particular functional requirements. Therefore, the RFP does not require certification, directly or by proxy, as a mandatory requirement. PWGSC added that allowing certification as one means of establishing compliance does not favour one bidder over another.

With respect to the data extraction tool (DET), described by COGNOS as "ETL software", PWGSC submitted that the trade agreements do not require the Crown to compromise its legitimate operational requirements to accommodate a particular bidder's circumstances. PWGSC submitted that the Department of Justice is entitled to source in, as a single procurement, commercial software that provides a DET and commercial software that meets the Balanced Scorecard and OLAP requirements, all necessary components of its required EIS/Portal System. Citing Tribunal decisions, ¹¹ PWGSC submitted that the solicitation was not structured to avoid competition or the requirements of the trade agreements.

With respect to COGNOS's allegation of favouritism towards the Hyperion product, PWGSC submitted that, whether considered separately or collectively, the various bases upon which COGNOS alleged a "predetermined outcome" to the RFP do not support its claim. Specifically, PWGSC argued that most of the allegations pertain to matters that predate the RFP, that it is under no obligation to ask clarification questions and that, in any event, sufficient clarification questions were asked to determine that COGNOS's proposal was not compliant with the mandatory requirements of the original solicitation and that the software testing provisions in the RFP do not support COGNOS's allegation of a "black box testing" environment. PWGSC also indicated that, contrary to COGNOS's allegation, it had no knowledge of potential bidders that "have decided that they cannot participate in this process due to the restrictive nature of the RFP" or of a bidder, other than COGNOS, that "has submitted a protest to PWGSC".

PWGSC requested costs in the matter.

In its comments of December 19, 2001, PWGSC submitted that the RFP sets out the requirements of the Department of Justice in terms of performance, not design. In addition, PWGSC submitted that section 2.1.2.1 of the SOW clearly allows for equivalents. PWGSC further submitted that the Tribunal, in a decision, ¹² recognized that a contracting authority is acting consistently with the trade agreements where equivalents to company-specific certifications are allowed. PWGSC also submitted that reference to BSCol is merely one means of evidencing compliance with a mandatory requirement of the RFP. It added that, while the name "Balanced Scorecard Functional Standards^TM" may be trademarked, the actual functional standards are not subject to intellectual property rights and that software developers are free to adopt the functional standards without the need for certification. In any event, PWGSC submitted that compliance with the functional standards specified by BSCol does not limit solutions or preselect a product. In fact, PWGSC asserted that there are at least 14 different certified vendors of software that use the Balanced Scorecard methodology, including COGNOS.

With respect to COGNOS's allegation that the functional requirements of the RFP are "very high level and broad" and that the RFP provides "no direction to bidders as to how compliance is demonstrated", PWGSC submitted that the RFP, in section 2.1.1.1 of the SOW, expressly advises bidders how to demonstrate compliance. Furthermore, the functional standards required by the RFP represent a "minimum functionality" and "basic elements of a proper Balanced Scorecard". ¹³

Finally, PWGSC explained why it was unaware of another supplier's alleged protest and submitted that, when viewed in context, this protest was unfounded.

COGNOS's Position

COGNOS submitted that the RFP has to be assessed in light of its history. Viewed in context, certain requirements of the RFP are clearly discriminatory. Specifically, COGNOS submitted that the GIR demonstrates that, early in the "pilot project", the Department of Justice developed a preference for the Hyperion product. In fact, the whole "pilot project" was built around the Hyperion product and, in reality, the Department of Justice simply bought the Hyperion software, used it and decided that it liked it.

COGNOS submitted that, instead of beginning the acquisition process by defining a set of operational requirements and determining what products were available to satisfy its requirements, the Department of Justice simply met with three other departments to find out what they were using, identified a preferred product, Hyperion, and bought it for its pilot project. The Department of Justice made no attempt to determine what other products the market might have to offer in terms of competing methodologies or software. This restrictive approach explains why, for example, the Department of Justice was unaware that COGNOS also offers this type of software. COGNOS submitted that, in using this approach, the Department of Justice deviated from normal procurement procedures by first buying a particular manufacturer's product and then using it to confirm that the product satisfied its perceived needs.

COGNOS submitted that the requirement in the original solicitation to allow LROs, a specific function pointing only to Hyperion, clearly indicates that the outcome of the solicitation was predetermined.

Furthermore, COGNOS submitted that PWGSC offered no evidence, although easily accessible, to support its view and the view of the Department of Justice of the meeting of April 10, 2001, in which the Department of Justice representative allegedly expressed satisfaction that commercially available off-the-shelf software existed to meet the business needs of the Department of Justice and that the Department of Justice wanted to purchase the best available product. COGNOS's view of what transpired at that meeting, which is contained in an affidavit, is that the Department of Justice representative said words to the effect that he liked what he had seen in the Hyperion product and that, basically, it was up to the other suppliers to prove him wrong. Under the circumstances, COGNOS submitted that the Tribunal must accept the uncontradicted sworn evidence that it offered.

With respect to the Conference, COGNOS submitted that PWGSC did not, at the time that it was first raised, refute or challenge the assertion that, in its presentation, the Department of Justice used slides that were also used by Hyperion and Landmark Decisions Inc. Furthermore, the fact that PWGSC indicated that it was unaware of the situation does not mean that the situation was not witnessed by COGNOS or did not exist.

With respect to the original solicitation and the declaration that COGNOS's proposal was non-compliant, COGNOS indicated that it most definitely did not agree with this determination, but decided not to formally challenge PWGSC's decision. Acknowledging that the circumstances relating to its disqualification were not currently before the Tribunal, COGNOS nonetheless submitted that the reason invoked by PWGSC to justify this decision, i.e. lack of information in the bid to demonstrate compliance with certain mandatory requirements, did not hold because the said requirements had been converted into desirable items as a result of amendment No. 002.

COGNOS further submitted that the Balanced Scorecard methodology used by Hyperion is not a "requirement", as the GIR attempts to characterize it. Rather, it is a methodology for meeting an entity's performance measurement requirements. There are many other industry-accepted products and methodologies available. COGNOS indicated that it recognizes the right of the Department of Justice to define its own requirements; however, such requirements must be defined as far as possible in generic and operational terms. The flaw with the RFP is that it did not define a requirement; rather, it defined a very specific solution based upon a particular methodology certified by or meeting the standards of BSCol, a private, for-profit firm.

Moreover, COGNOS submitted that the Balanced Scorecard methodology is but one approach to business performance measurement. By specifying the Balanced Scorecard methodology, the RFP wedded itself to one particular performance measurement solution and to a particular set of standards. COGNOS suggested that, rather than defining its system requirements in operational terms, ¹⁴ the Department of Justice simply preselected a product and a performance measurement solution and designed the requirements of the RFP to procure that product or, as a second choice, something that is identical to it.

COGNOS asserted that BSCol is not a government organization, not an international agency charged with developing scorecard standards and not an industry organization. It has no official status whatsoever in terms of developing and recognizing such standards. Furthermore, the Balanced Scorecard concept is neither a governmental nor an industry-recognized standard. COGNOS also warned that the "Balanced Scorecard Institute", mentioned for the first time in the GIR, is not to be confused with BSCol mentioned in the RFP.

COGNOS argued that the trade agreements clearly preclude reliance on trademarks or names, design or type, specific origin, or producer or supplier when preparing technical specifications. But, COGNOS submitted, this is exactly what section 2.1.2.1 of the SOW does. In this case, COGNOS submitted that the Balanced Scorecard Functional Standards^TM are trademarked by BSCol, as is the BSCol Certified mark.

COGNOS added that, in the absence of BSCol certification, which results in deemed compliance, other bidders will experience problems demonstrating equivalency, particularly if the Department of Justice refuses to allow a demonstration of how the software works. COGNOS further submitted that the requirements in section 2.1.1.1 of the SOW are very high level and broad, and provide no direction to bidders as to how compliance is to be demonstrated.

COGNOS asserted that it is not prohibited from referring, in its complaint, to the unequal impact on bidders of the foreshortened bidding period as evidence of an ingrained bias in the RFP.

Citing a decision ¹⁵ of the Procurement Review Board of Canada, the Tribunal's predecessor as the bid challenge authority for Canada, COGNOS submitted that the Tribunal has seen the pattern of this case before:

This case discloses ample proof that what actually went on in this procurement was a pre-competition, held by Agriculture Canada in private, in the course of assessing what the market had to offer that might meet their needs. ... Knowing their needs intimately, they assessed the market with a critical eye and went straight to the conclusion that they had found the product that best met those needs. ...
When faced with the incidental requirements of the law to conduct an open competition, they went along with that. But they didn't intend to risk "losing" in that competition, so they prepared a specification with 13 mandatory requirements for the pump, 5 more for the autosampler and 2 for the overall system, which are set up mainly in terms of particular product features -- but which, as the above analysis shows, were open to a series of criticisms that go straight to the issue of fairness to those potential suppliers who would be invited to bid. ¹⁶

In its final comments of December 27, 2001, COGNOS submitted that PWGSC's additional comments are not a genuine reply to new matters; rather, they supplement, for the most part, the arguments found in the GIR.

COGNOS submitted that the RFP does not permit "functional equivalency". Rather, it requires that suppliers bid on either the BSCol solution or something identical to it. Furthermore, it reiterated that bidders offering equivalent solutions will have difficulty demonstrating equivalency, as was the case for COGNOS during the original solicitation.

COGNOS disagreed with PWGSC that the trade agreements generally allow "equivalents to ... company-specific certification." To the contrary, COGNOS submitted that the general rule is that requirements are not to be defined by reference to specific trademarks or names, design or type, except where there is no precise or intelligible way of describing the procurement requirements. COGNOS submitted that PWGSC has not invoked or documented such circumstances in its submissions to the Tribunal.

COGNOS re-asserted that the functional standards are trademarked by BSCol. ¹⁷ Finally, referring to the other protest issue, COGNOS submitted that this protest documents a case where imposing the same requirement on all bidders, irrespective of the particular circumstances of a case, results in unequal treatment.

TRIBUNAL'S DECISION

Subsection 30.14(1) of the CITT Act requires that, in conducting an inquiry, the Tribunal limit its considerations to the subject matter of the complaint. Furthermore, at the conclusion of the inquiry, the Tribunal must determine whether the complaint is valid on the basis of whether the procedures and other requirements prescribed in respect of the designated contract have been observed. Section 11 of the Regulations further provides that the Tribunal is required to determine whether the procurement was conducted in accordance with the trade agreements, which, in this instance, are NAFTA, the AGP and the AIT.

COGNOS alleged that:

Addressing first the second allegation above, the Tribunal determines that this ground of complaint is late. Consequently, the Tribunal will not address it on its merits. The Tribunal is of the view that, in the absence of any objection from COGNOS to PWGSC concerning the length of the bidding period, pursuant to subsection 6(1) of the Regulations, COGNOS had 10 working days from when it knew or reasonably should have known this ground to file a complaint with the Tribunal. The RFP, which clearly identifies the bidding period, was issued on September 28, 2001. COGNOS downloaded the RFP from MERX on October 2, 2001; however, COGNOS's complaint was received by the Tribunal on October 26, 2001, i.e. 20 working days later.

With respect to COGNOS's first allegation that section 2.1.2.1 of the SOW is restrictive in that it does not allow for equivalents, the Tribunal finds that this ground is valid.

The Tribunal notes that the fact that entities are responsible for determining their requirements does not relieve them from the obligation to ensure that the technical specifications that they prepare, adopt or apply do not have as a purpose or effect the creation of unnecessary obstacles to trade. Article 1007(2) of NAFTA is clear in this respect and stipulates that the technical specifications prescribed by entities must be specified in terms of performance criteria rather than design or descriptive characteristics and be based on international or recognized national standards, regulations and codes.

Article 1007(3) of NAFTA further provides that: "Each Party shall ensure that the technical specifications prescribed by its entities do not require or refer to a particular trademark or name, patent, design or type, specific origin or producer or supplier unless there is no sufficiently precise or intelligible way of otherwise describing the procurement requirements and provided that, in such cases, words such as "or equivalent" are included in the tender documentation."

In the Tribunal's opinion, it is accurate to state that section 2.1.2.1 of the SOW allows for an alternative to BSCol certification. However, any software application proposed by a bidder has to satisfy "the functional requirements specified by [BSCol]" or "demonstrate functional equivalency to [BSCol] certification" (i.e. meet the requirements of sections 5.1 to 5.4 inclusive of the Balanced Scorecard Functional Standards^TM, Release 1.0a, May 5, 2000). In the Tribunal's opinion, the requirements set out in sections 5.1 to 5.4 of the Balanced Scorecard Functional Standards^TM do not define generic concepts. Rather, using generic concepts, they describe a particular approach, methodology, design or solution to manage and implement strategies or to meet performance requirements in organizations. In the Tribunal's opinion, the Balanced Scorecard Functional Standards^TM constitute a particular trademark or design, which the trade agreements ordinarily prohibit in technical specifications for a procurement solicitation.

The fact that there exist a number of established alternatives to the Balanced Scorecard Functional Standards^TM design is well known and is not in dispute. In the Tribunal's opinion, the issue before it is a statement of requirements that has been expressed in the RFP by specifying a particular design (Balanced Scorecard and Balanced Scorecard Functional Standards^TM) for developing software applications to meet, in part, the requirement of the Department of Justice for an EIS. That the particular design specified in the RFP lends itself to a number of different software applications developed by different vendors, including Hyperion, is not disputed. However, there was no provision in the RFP for equivalency to that design rather than to the certification. In the Tribunal's view, in the absence of such a provision, a number of software applications based on designs other than the Balanced Scorecard Functional Standards^TM, which could meet the requirements of the Department of Justice, generically expressed, e.g. the product proposed by COGNOS in its original proposal, cannot qualify for this solicitation. This is due to the restrictive and mandatory nature of the requirement set out in section 2.1.2.1 of the SOW. The RFP is an invitation that is only open to software applications based on BSCol's Balanced Scorecard Functional Standards^TM, with no substitutes allowed. This is contrary to the provisions of the trade agreements.

Furthermore, the Tribunal notes that the trade agreements, specifically NAFTA and the AGP, permit the use of a particular trademark or name, patent, design or type in preparing technical specifications only when there is no sufficiently precise or intelligible way of otherwise describing the procurement requirements. The Tribunal is not persuaded that, in this instance, there is no sufficiently precise and intelligible way of otherwise describing the requirements of the Department of Justice.

With respect to COGNOS's third allegation of discrimination and bias in favour of the Hyperion product, the Tribunal determines that this ground of complaint is without merit.

Specifically, the Tribunal finds that COGNOS's allegations relating to: (1) the length of the bidding period as a basis for supporting an assertion of uneven treatment of bidders; (2) the participation and actions of the Department of Justice at the Conference; (3) the nature of certain provisions in the RFP governing the demonstration of equivalency to the Balanced Scorecard Functional Standards^TM (COGNOS's so-called "black box testing" environment issue); (4) the defective provisions in the RFP to demonstrate evidence of equivalency; (5) the improper evaluation of COGNOS's original proposal and the biased nature of certain comments made by the Department of Justice at the debriefing following the original solicitation; and (6) the inclusion in the RFP of a requirement for a DET, when considered in the context of the original solicitation or the RFP, by themselves or taken together, are not sufficient evidence to establish the serious charge of predetermining the outcome to a single vendor's software. From the evidence on the record, the Tribunal is aware that software applications from 13 vendors other than Hyperion, all based on the Balanced Scorecard Functional Standards^TM, currently exist, and any of them might have been proposed to satisfy the requirements of the Department of Justice in this instance.

COGNOS requested that it be compensated in accordance with section 30.15 of the CITT Act. The Tribunal is of the view that the background history of this procurement described a case where a particular product had been selected by the Department of Justice at the outset to conduct a pilot project and subsequently influenced the drafting of the solicitation documents. If that is all that there was to this matter, the Tribunal might have a critical view of the situation. However, as indicated above, the Tribunal is satisfied that, following representations made by COGNOS, the situation was largely corrected by PWGSC and the Department of Justice. That PWGSC and the Department of Justice were not completely successful in aligning the RFP with all the provisions of the trade agreements is abundantly clear from this determination. Nonetheless, the Tribunal is not persuaded that PWGSC and the Department of Justice acted in bad faith in this matter or that they caused irreparable damage to COGNOS or prejudiced the integrity of the procurement system. Therefore, in the circumstances, the Tribunal will not recommend compensation. Instead, in view of the fact that a contract has not yet been awarded, the Tribunal will recommend that PWGSC and the Department of Justice revisit the statement of requirements in the RFP to align it with this determination and the trade agreements and, on this basis, reissue the solicitation in accordance with the open tendering procedures of the trade agreements.

DETERMINATION OF THE TRIBUNAL

In light of the foregoing, the Tribunal determines that the procurement was not conducted in accordance with the requirements of NAFTA, the AIT and the AGP and that, therefore, the complaint is valid in part.

Pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends, as a remedy, that PWGSC cancel Solicitation No. 19200-000572/B and issue a new solicitation in accordance with this determination and the provisions of the applicable trade agreements.

Pursuant to subsection 30.16(1) of the CITT Act, the Tribunal awards COGNOS its reasonable costs incurred in preparing and proceeding with the complaint.

1 . The Balanced Scorecard is a strategic management system that defines an organization's vision and strategy in terms of specific, measurable goals and objectives. It also describes how to map these strategic objectives into a small set of key performance measures that are tracked by decision makers at all levels of the organization, as they identify, measure and manage the elements that have been identified as critical to the success of the organization's vision. With the Balanced Scorecard methodology, all measurement and management is done in the context of the objectives. These strategic objectives are grouped and measured from four perspectives: finance, customer satisfaction, internal processes, and innovation and improvement (Source: Government Institution Report, Tab 6).

2 . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.intrasec.mb.ca/eng/it.htm> [hereinafter AIT].

3 . 32 I.L.M. 289 (entered into force 1 January 1994) [hereinafter NAFTA].

4 . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm> [hereinafter AGP].

5 . R.S.C. 1985 (4th Supp.), c. 47 [hereinafter CITT Act].

6 . S.O.R./93-602 [hereinafter Regulations].

7 . S.O.R./91-499.

8 . Balanced Scorecard Collaborative, Inc. is a consulting, education, training, research and development firm that facilitates the worldwide awareness, use, enhancement and integrity of the Balanced Scorecard as a value-added management process. Its services include, inter alia, the Balanced Scorecard Functional Standards^TM and BSCol Certified^TM Program (Source: COGNOS's complaint, Exhibit P).

9 . Canada's Electronic Tendering Service.

10 . Re Complaints Filed by Corel Corporation (26 October 1998), PR-98-012 and PR-98-014 (CITT); Re Complaint Filed by Computer Talk Technology (26 February 2001), PR-2000-037 (CITT); Re Complaint Filed by Eurodata Support Services (30 July 2001), PR-2000-078 (CITT) [hereinafter Eurodata Support Services].

11 . Re Complaint Filed by Foundry Networks (30 August 2001), PR-2001-008 (CITT); Eurodata Support Services.

12 . Re Complaint Filed by IT/NET Consultants (20 July 1999), PR-99-007 (CITT).

13 . Source: Complaint, Exhibit Q, section 5.0.

14 . See Re Complaint Filed by Sweeprite Mfg. (6 May 1992), G92PRF66K-021-0005 and G92PRF66K-021-0006 (PRB); Re Complaint Filed by Storage Tek Canada (29 May 2000), PR-99-050 (CITT).

15 . Re Complaint Filed by Waters Chromatography (16 October 1991), E91PRF6601-021-0022 (PRB).

16 . Ibid.

17 . Source: Sections 2.1.2.1 and 2.1.2.1.1 of the SOW and Tabs L and Q of the complaint.

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Initial publication: February 20, 2002