Avoiding technical evaluation traps

From the August 2023 print edition

As shown by multiple legal rulings across Canada recently, bidders are becoming more assertive in challenging the technical evaluation criteria used by public institutions in evaluation and award decisions. While many evaluation challenges are dismissed, I’ll summarize two recent cases where the Canadian International Trade Tribunal (“Tribunal”) upheld bid protests after finding the government used biased criteria in the bidding process.

Paul Emanuelli is the general council of the Procurement Law office. Paul can be reached at [email protected].

In the first recent example in the PricewaterhouseCoopers LLP v. Canada (Immigration and Refugee Board) decision, the Tribunal determined that the Immigration and Refugee Board of Canada (IRB) relied on hidden and biased evaluation criteria in a bidding process for business consulting and change management services. The complainant, PricewaterhouseCoopers LLP (PWC), failed to meet the minimum technical scoring thresholds and challenged the evaluation result. The Tribunal determined that the government’s technical scoring process was “inconsistent and unduly fluid.” Specifically, the Tribunal found that government evaluators applied undisclosed evaluation criteria that biased past experience scoring in favour of prior work performed specifically for the IRB over more general public sector experience. The Tribunal determined that the government failed to disclose the necessary level of detail regarding its evaluation criteria and its preference of institution-specific experience.

The Tribunal determined that “PwC has a valid complaint that its bid was evaluated as against criteria that differed from those of the RFP or were undisclosed in the RFP.”

It determined the complainant should be compensated for its lost opportunity and bid preparation costs.

This case illustrates public institutions should ensure their criteria are transparently defined
in their solicitation documents and should avoid applying hidden preference with biased requirements in their evaluations.

Restrictive specifications
In the second case study, in its determination in Rampart International Corp. v. Canada (Department of Public Works and Government Services), the Tribunal upheld a complaint after finding that the government improperly relied on restrictive specifications. The dispute dealt with an RFP issued by the Department of Public Works and Government Services on behalf of the Department of National Defence for a replacement pistol and holster system for the Canadian Armed Forces. The complainant asserted the RFP contained technical specifications biased in favour of a specific competing pistol design and that those specifications were reverse engineered to align with that competing product.

In its defence, the government argued that the specifications were necessary for legitimate operational requirements. But the Tribunal noted that when government technical requirements are challenged, the government institution bears the onus of demonstrating that its specifications do not unnecessarily restrict competition.

The Tribunal determined that the challenged specifications were based on a specific product design or type, rather than on neutral performance or functional requirements. While the Tribunal noted that the use of product-based specifications is not completely prohibited under the trade treaties, it ruled that the specifications in the RFP had the effect of narrowing competition, since the government failed to allow for equivalent products.

More specifically, the Tribunal determined that the government could not restrict the competition solely to a specific product, that the government was under a duty to consider equivalent products, and that the government should use neutral specifications whenever possible. The government was ordered to cancel the RFP and redraft its technical requirements to, at minimum, allow bidders to bid equivalent products.

As this case illustrates, when purchasing institutions draft specifications that are based on specific products, the trade treaties require public institutions to consider equivalent products that meet the underlying operational needs. Rather than exposing their procurements to specification-based legal challenges, purchasing institutions should draft their contract specifications based on neutral functional and performance-based requirements.

These recent rulings serve as a reminder to all public institutions that their bid evaluation and award decisions should be based on the transparency and neutrality standards mandated by the trade treaties. The increasing level of bidder assertiveness, coupled with expanding bid protest enforcement mechanisms across Canada at all levels of government, underscores the importance of avoiding technical evaluation traps in the public procurement process since unfair bidding procedures face an increasing risk of being invalidated by adjudicative bodies. To avoid becoming the next bid protest case study, public institutions should adopt internal procedures that mandate project team members to avoid using hidden and biased criteria and should stress test their evaluation criteria and specifications against fair competition standards before releasing their solicitation documents.