A fair process

From the February 2024 print edition

In the public sector tendering process, the evaluation of bids is typically delegated to an internal team who scores competing offers against pre-established criteria and makes a contract award recommendation to a higher-level oversight body for a formal award. Since these procedures are subject to strict due process standards, public institutions should establish award protocols that protect against improper interference, guard against conflict of interest, and properly balance the competing duties of transparency and confidentiality.

Paul Emanuelli is the general counsel of The Procurement Office and can be reached at [email protected].

Providing the ultimate contract award approvers insufficient or misleading information can prevent them from making an informed contract award decision, which can prove fatal to the legal validity
of the resulting contract. For example, in Rapiscan Systems Inc. v. Canada (Attorney General) the court struck down a contract award after determining that a public institution ran a non-transparent, unfair, and arbitrary process and then misled its board into believing that they were awarding a contract based on an open and fair competition. This case underscores the importance of establishing proper reporting procedures.

However, a careful balance must be struck since providing too much information to the final approvers can open the door to out-of-scope interference with the evaluation process, which can also undermine the legal validity of the final award decision. In fact, when internal award procedures are not clearly defined, there is a heightened risk that the ultimate approvers, who can include a federal or provincial cabinet, an internal governance board or office, or an elected body in the municipal or school board sector, will overreach in the scope of their oversight function.
Senior approvers do not have the authority to change the evaluation rules after bids are submitted. This significantly restricts the scope of decision-making once an evaluation team makes an award recommendation. While the ultimate award decision may remain with the senior approvers, those approvers cannot change the ground rules midstream by introducing new evaluation criteria
or procedures that were not part of the original tender call.

Nor is it typically appropriate to revisit the scoring decisions made by the evaluation team since, as proven by a long line of recent rulings across multiple jurisdictions, this can result in improper interference with the independent authority delegated to the evaluation team and undermine the integrity of the award decision. Public institutions should therefore clearly define the scope of oversight performed by the ultimate approving authority.

Free from conflicts
To be defensible, a public procurement process must also be shielded from conflicts of interest. The individuals involved in the process, from project team members who draft the solicitation document, to bid evaluation team members, to the senior officials who ultimately make the contract award decision, should be free from conflicts. The more levels of approval required for the ultimate award, the more complex the conflict vetting process. Before an award is made, each member of the approval body should be screened for conflicts and recused from any decision where conflicts may be present.

The Canadian federal government’s WE Charity sole-source controversy offers a recent high-profile case study where recusal protocols were not properly administered. In that case, the Prime Minister ultimately acknowledged that he should have recused himself from the award decision due to the perception of personal conflict. Even more recently, Canada’s federal trade minister breached the federal conflict law by awarding two sole-source contracts to a friend. The fact that Canada’s federal cabinet has recently faced multiple conflict controversies raises serious questions about how other public bodies are managing these same issues.

Contract award approvals also remain subject to confidentiality duties, even when the ultimate approval authority is a body, such as a municipal council or school board, that typically conducts its business in a public forum. For example, in the recent decision in Fallis v. Orillia (City), an Ontario court found that a municipal councillor breached a municipal code of conduct by disclosing confidential information about a public procurement process to his private lawyers. The court found that the disclosure of internal legal advice and the disclosure of other information about the bidding process were both breaches of the municipal code. As this case illustrates, public officials, including elected officials, should avoid disclosing confidential information relating
to a public procurement process. That information includes sensitive business information contained in competing bids, since bidders have the right to shield that type of information from public disclosure.

In recent years, the courts have been enforcing that right with increasing frequency. Moving forward, public institutions should establish proper approval protocols to ensure that their contract awards are administered in accordance with the complex due process standards that apply to public procurement.