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Procurement
Determinations
PARADISE COMPANY
v.
DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES
File No. PR-2006-034
Determination and reasons issued
Tuesday, March 6, 2007
TABLE OF CONTENTS
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IN THE MATTER OF a complaint filed by Paradise Company 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.
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BETWEEN |
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PARADISE COMPANY |
Complainant |
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THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES |
Government Institution |
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.
Pursuant to subsections 30.15(2) and (3) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal recommends that the Department of Public Works and Government Services accept the proposal and samples submitted by Paradise Company as if they had been submitted on time; that the Department of Public Works and Government Services include Paradise Company’s proposal and samples in the evaluation process with respect to the Request for a Standing Offer; that the Department of Public Works and Government Services confirm with all bidders that their prices are still valid and exclude from the evaluation process any bidder which does not maintain its prices; and that the standing offer be issued to the bidder with the lowest-priced compliant proposal.
Meriel V. M. Bradford
Meriel V. M. Bradford
Presiding Member
Susanne Grimes
Susanne Grimes
Acting Secretary
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Tribunal Member: |
Meriel V. M. Bradford, Presiding Member |
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Director: |
Marie-France Dagenais |
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Senior Investigators: |
Michael W. Morden |
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Cathy Turner |
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Counsel for the Tribunal: |
Reagan Walker |
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Complainant: |
Paradise Company |
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Intervener: |
Able Canada Inc. |
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Government Institution: |
Department of Public Works and Government Services |
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Counsel for the Government Institution: |
Susan D. Clarke |
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Christianne M. Laizner |
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Ian McLeod |
Please address all communications to:
The Secretary
Canadian International Trade Tribunal
Standard Life Centre
333 Laurier Avenue West
15th Floor
Ottawa, Ontario
K1A 0G7
Telephone: 613-993-3595
Fax: 613-990-2439
E-mail: secretary@citt-tcce.gc.ca
STATEMENT OF REASONS
COMPLAINT
1. On December 7, 2006, Paradise Company (Paradise) filed a complaint with the Canadian International Trade Tribunal (the Tribunal) under subsection 30.11(1) of the Canadian International Trade Tribunal Act. 1 The complaint concerned a procurement (Solicitation No. W3380-07A017/A) by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of National Defence (DND) for the provision of women’s and men’s swimsuits.
2. Paradise alleged that PWGSC issued an amendment to the men’s swimsuit specifications too near to the bid receipt date to allow Paradise to accommodate the specification changes in the men’s swimsuit sample and, as such, prevented bidders from submitting bids on time. Paradise also alleged that the timing of the amendment improperly favoured bidders with local manufacturers and discriminated against bidders with overseas subcontractors. As a remedy, Paradise requested that the Tribunal issue a postponement of award order and that the solicitation be re-tendered.
3. On December 12, 2006, 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. 2 Also on December 12, 2006, pursuant to subsection 30.13(3) of the CITT Act, the Tribunal ordered PWGSC to postpone the award of a contract until the Tribunal determined the validity of the complaint. On December 21, 2006, Able Canada Inc. (Able) requested leave to intervene in the proceedings. On December 22, 2006, the Tribunal granted Able’s request. On January 8, 2007, PWGSC submitted the Government Institution Report (GIR). On January 18, 2007, Paradise submitted its comments on the GIR.
4. 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 written information on the record.
PROCUREMENT PROCESS
5. The Request for a Standing Offer (RFSO) that is the subject of the complaint was made available through MERX 3 on October 2, 2006, with a due date for the receipt of bids of November 14, 2006. It was issued to obtain women’s and men’s swimsuits of various sizes. The RFSO anticipated the issuance of a single standing offer, to be in force from December 1, 2006, to November 30, 2007, with an option to renew for two additional one-year periods.
6. Regarding the complaint, the RFSO contained the following provisions:
Standard Instructions and Conditions - Standing Offers
. . .
9403-6 (10/06/05), Standard Instructions and Conditions - Standing Offers, are incorporated by reference into and form part of this document.
. . .
TIME EXTENSION TO CLOSING DATE
To be considered, a request to extend the closing date must be addressed in writing and received by the Minister’s Representative at least 7 calendar days before closing date.
. . .
Evaluation Criteria: MANDATORY
All the following mandatory criteria will be [taken] into consideration to evaluate all proposals.
a) Technical conformity (Appendix “A”, “B” and pictures);
b) Supply one women and men swimsuit sample, with your proposal
c) FOB destination;
d) Firm unit price per year
e) Completion of the solicitation.
Title Basis of Selection - Mandatory Requirements Only
To be considered responsive, a bid must meet all of the mandatory requirements of the bid solicitation. Bids not meeting all of the mandatory requirements will be given no further consideration. The lowest-priced responsive bid will be recommended for issuance of a standing offer.
. . .
7. Regarding the specifications that were changed, Appendix “A” to the original RFSO reads as follows:
STATEMENT OF GOODS
. . .
MEN SWIMSUIT:
- style short (see picture)
- 100% nylon
- colour navy blue
- without inside and outside pocket
- 100% polyester lining, net
- elastic waist band + cords (tie)
- double stitches, overlocked edges
- size varying from small (30-32), medium (34-36), large (38-40), Xlarge (42-44), XXlarge (46-48), XXXlarge (50-52) and more
- special size possibility
. . .
SAMPLES MUST BE SUPPLIED FOR APPROVAL WITH YOUR PROPOSAL
8. Amendment No. 001, issued on November 6, 2006, and sent through MERX to Paradise on November 7, 2006, contained the following additional information:
. . .
MEN’S SWIMSUIT SIZES SPECIFICATIONS:
Small: 15” outside of the leg / 4” inside of the leg
Medium: 16” outside of the leg / 5” inside of the leg
Large: 16 1/2” outside of the leg / 5 1/2” inside of the leg
X large: 17” outside of the leg / 6” inside of the leg
SWIMSUIT FABRICATION:
MEN: Swimsuit special elastic, water and chlorine resistant
Waist elastic 1”
Thigh elastic, lining 1/4”
WOMEN: Thigh elastic 1/4”
9. Following its receipt of amendment No. 001, Paradise contacted PWGSC on November 10, 2006, and requested that the due date for the receipt of bids be extended to allow Paradise to take into account the changes to the specifications. PWGSC denied Paradise’s request and did not extend the bid closing date.
10. At 2:00 p.m. on November 14, 2006, the bidding period closed. That same day, at 2:36 p.m., Paradise’s samples were delivered to PWGSC and, at 3:18 p.m., its proposal was delivered to PWGSC. According to PWGSC, four bids were received by bid closing time, three of which included the required samples. According to PWGSC, Paradise’s bid was deemed non-compliant, as it failed to submit the required samples by the bid closing time.
11. On November 20, 2006, Paradise wrote to PWGSC objecting to its decision not to extend the bid closing date. Paradise requested either that PWGSC accept its samples or that the RFSO be re-tendered.
12. On November 24, 2006, PWGSC responded to Paradise by stating that PWGSC had the right to amend the solicitation up to 24 hours before the bid closing period expired. PWGSC stated that the amendment did not change the main requirement, that all documentation concerning the specifications showed the information given in the amendment and that there was therefore no need to change the bid closing date. PWGSC also informed Paradise that PWGSC did not receive Paradise’s samples and proposal until after the bidding period had closed and that, in accordance with clause 8 of the Standard Instructions and Conditions 9403-6 that were incorporated into the solicitation document, “. . . [i]t is PWGSC’s policy to return, unopened, offers delivered after the stipulated RFSO closing date and time . . . .”
13. On December 7, 2006, Paradise filed its complaint with the Tribunal.
TRIBUNAL’S ANALYSIS
14. 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 applicable trade agreements, which, in this instance, is the Agreement on Internal Trade. 4
15. The Tribunal notes that the North American Free Trade Agreement 5 and the Agreement on Government Procurement 6 do not apply to this procurement due to the fact that these goods are being procured for DND. 7
Allegation 1: Amendment Was Too Near the Due Date for the Receipt of Bids
16. Paradise alleged that it was unable to produce a compliant sample in time to submit with its proposal, as required by the RFSO, due to PWGSC’s late release of the specification amendment. Paradise submitted that, regardless of where a bidder or subcontractor is located, there could be other confirmed jobs ahead of a request for a modification to a sample product which could prevent a sample from being provided within a short period of time.
17. PWGSC submitted that the RFSO, as originally issued, included a number of detailed photographs of the required swimsuits. PWGSC submitted that these photographs were taken from a close angle, both front and back, and were provided to suppliers in large-scale electronic format through MERX. PWGSC further submitted that the lengths of the leg and inseam of the men’s swimsuit, as well as the waistband, were readily visible in the photographs.
18. PWGSC submitted that three suppliers were able to produce and submit the required samples with their proposals by bid closing, which, it contended, indicates that the time period provided was reasonable.
Allegation 2: Amendment Discriminated Against Suppliers With Overseas Subcontractors
19. Paradise submitted that the timing of amendment No. 001 improperly favoured bidders with local manufacturers and discriminated against bidders with overseas subcontractors.
20. PWGSC submitted that a reasonable period of time to respond to the requirements of the RFSO, including amendment No. 001, was provided to suppliers. PWGSC noted that amendment No. 001 was issued on November 6, 2006, and that, accordingly, suppliers had more than a week to prepare and arrange for the delivery of the required samples by bid closing. PWGSC further submitted that, even though Paradise’s subcontractor was located in China, the availability of telecommunications and international delivery services meant that Paradise had a reasonable period of time to have the subcontractor prepare and deliver the required samples to PWGSC.
Analysis
21. Article 501 of the AIT reads as follows:
. . . the purpose of this Chapter is to establish a framework that will ensure equal access to procurement for all Canadian suppliers in order to contribute to a reduction in purchasing costs and the development of a strong economy in a context of transparency and efficiency.
22. Article 504 of the AIT provides as follows:
. . .
2. With respect to the Federal Government . . . it shall not discriminate:
a. between the goods or services of a particular Province or region, including those goods and services included in construction contracts, and those of any other Province or region; or
b. between the suppliers of such goods or services of a particular Province or region and those of any other Province or region.
3. Except as otherwise provided in this Chapter, measures that are inconsistent with paragraphs 1 and 2 include, but are not limited to, the following:
. . .
c. the timing of events in the tender process so as to prevent suppliers from submitting bids.
. . .
23. In response to requests for information on October 5 and 11, 2006, 8 regarding the required specifications of the swimsuits, with particular reference to the lengths of the leg and inseam of the men’s swimsuits, as well as the required type of elastic around the waist, PWGSC published amendment No. 001 on November 6, 2006. The RFSO closed eight calendar days later, on November 14, 2006.
24. The Tribunal notes that the requirement was to establish a standing offer for swimsuits and was not a requirement for a firm, fixed quantity of swimsuits to be delivered in a short period of time, as would be expected in a contract situation. The Tribunal finds that PWGSC amended the requirements of the RFSO in response to questions from a supplier. In the Tribunal’s view, to the extent that new samples were required and possibly a new bid needed to be prepared, PWGSC did not provide sufficient time for potential suppliers to submit a compliant bid. The Tribunal is of the opinion that this was especially true for bidders with offshore suppliers, as in the case of Paradise. Despite requesting an extension, Paradise was denied this request and, accordingly, the restrictive timing requirements in the RFSO, following an amendment issued late in the bidding process, prevented Paradise from submitting a bid. Therefore, the Tribunal finds that PWGSC breached Article 504 of the AIT.
25. In light of the foregoing, the Tribunal determines that Paradise’s complaint is valid.
REMEDY
26. In recommending a remedy, the Tribunal is required, under subsection 30.15(3) of the CITT Act, to consider all the circumstances relevant to the procurement of the goods or services to which the designated contract relates, including the following:
. . .
(a) the seriousness of any deficiency in the procurement process found by the Tribunal;
(b) the degree to which the complainant and all other interested parties were prejudiced;
(c) the degree to which the integrity and efficiency of the competitive procurement system was prejudiced;
(d) whether the parties acted in good faith; and
(e) the extent to which the contract was performed.
27. In determining the remedy to recommend in this case, the Tribunal considered the circumstances relevant to the procurement, including the above-mentioned considerations. The major factor applicable to this case is that Paradise requested and was denied additional time to prepare its bid. In addition, since the Tribunal issued a postponement of award order on December 12, 2006, no contract has been awarded and, therefore, no commitment has been made to any bidder.
28. As a remedy, in its complaint to the Tribunal, Paradise requested that the requirement be re-tendered. In its objection to PWGSC, Paradise requested that PWGSC either accept its samples as submitted or re-tender the requirement. In the GIR, PWGSC submitted that the Tribunal make the following recommendations, in the event that it finds that Paradise was not provided with a reasonable amount of time to produce and submit the required samples: that PWGSC accept the samples submitted by Paradise as if they had been submitted on time; that PWGSC include Paradise’s proposal and samples in the evaluation process with respect to the RFSO; that PWGSC confirm with all bidders that their prices are still valid and exclude from the evaluation process any bidder which does not maintain its prices; and that the standing offer be issued to the bidder with the lowest-priced compliant proposal.
29. In general, the Tribunal finds that the recommendations proposed by PWGSC are an appropriate remedy in this case and therefore the Tribunal recommends: that PWGSC accept the samples and proposal submitted by Paradise as if they had been submitted on time; that PWGSC include Paradise’s proposal and samples in the evaluation process with respect to the RFSO; that PWGSC confirm with all bidders that their prices are still valid and exclude from the evaluation process any bidder which does not maintain its prices; and that the standing offer be issued to the lowest-priced compliant proposal.
Costs
30. In this case, as neither party requested its costs associated with the complaint, the Tribunal has decided not to award costs to either party.
DETERMINATION OF THE TRIBUNAL
31. Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is valid.
32. Pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends that PWGSC accept the proposal and samples submitted by Paradise as if they had been submitted on time; that PWGSC include Paradise’s proposal and samples in the evaluation process with respect to the RFSO; that PWGSC confirm with all bidders that their prices are still valid and exclude from the evaluation process any bidder which does not maintain its prices; and that the standing offer be issued to the bidder with the lowest-priced compliant proposal.
1 . R.S.C. 1985 (4th Supp.), c. 47 [CITT Act].
2 . S.O.R./93-602 [Regulations].
3 . Canada’s electronic tendering service.
4 . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/index_en/ait.htm> [AIT].
5 . North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America, 17 December 1992, 1994 Can. T.S. No. 2 (entered into force 1 January 1994) [NAFTA].
6 . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm> [AGP].
7 . The goods in question fall under Federal Supply Classification (FSC) code 84 and, as such, are not included for coverage for DND in accordance with Section B of Annex 1001.1b-1 of NAFTA. The goods are also not included for coverage for DND in accordance with Annex 1 of the AGP.
8 . GIR, para. 10.
