NEOPOST CANADA LIMITED
CANADA REVENUE AGENCY
File No. PR-2015-033
Determination and reasons issued
Tuesday, December 29, 2015
TABLE OF CONTENTS
IN THE MATTER OF a complaint filed by Neopost Canada Limited pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C., 1985, c. 47 (4th Supp.);
AND FURTHER TO a decision to conduct an inquiry into the complaint pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act.
NEOPOST CANADA LIMITED Complainant
THE CANADA REVENUE AGENCY Government Institution
Pursuant to subsection 30.14(2) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal determines that the complaint is not valid.
Tribunal Member: Jean Bédard, Presiding Member
Counsel for the Tribunal: Alexandra Pietrzak
Jessica Spina (student-at-law)
Registrar Officer: Lindsay Vincelli
Complainant: Neopost Canada Limited
Counsel for the Complainant: Michael R. Swartz
Government Institution: Canada Revenue Agency
Counsel for the Government Institution: Claudine Patry
Please address all communications to:
Canadian International Trade Tribunal Secretariat
333 Laurier Avenue West
Ottawa, Ontario K1A 0G7
1.This complaint relates to a Request for Proposal (RFP) (Solicitation No. CRA-1000325893) for the supply, delivery and installation of postage meter systems by the Canada Revenue Agency (CRA). The CRA declared the bid submitted by Neopost Canada Limited (Neopost) non-compliant on the basis that Neopost failed to provide a signed Annex C to the RFP, certifications required to be submitted at the time of bid closing (Annex C).
2.Neopost alleged that the CRA improperly declared its bid non-compliant. It contended that a handwritten signature on Annex C was not a mandatory requirement of the bid solicitation and that a failure to include the handwritten signature should not have resulted in a finding of non-compliance. Rather, Neopost submitted that the missing signature on Annex C constituted a minor irregularity, or non-material error of form, that should have been waived by the CRA.
3.As a remedy, Neopost requested that it be awarded the contract on the basis that it met the mandatory requirements of the bid solicitation, notwithstanding the missing signature. In the alternative, Neopost requested that the bids be re-evaluated or that a new solicitation for the contract be issued, and that Neopost be awarded costs incurred in the preparation of its complaint.
4.The CRA submitted that the signature on Annex C was a mandatory requirement that had to be met in order for the bid to be declared responsive. Further, the CRA contended that allowing Neopost to resubmit its Annex C after the bid closing date would have amounted to bid repair and would have resulted in a breach of the applicable trade agreements.
5.Given that there was sufficient information on the record to determine the validity of the complaint, the Canadian International Trade Tribunal (the Tribunal) decided that a hearing was not required and disposed of the complaint on the basis of the written information on the record.
6.Having examined party submissions and the evidence on the record, the Tribunal finds that the complaint is not valid. The reasons for that decision are as follows.
7.The CRA issued the RFP on September 22, 2015, with a bid closing date of September 30, 2015. On September 30, 2015, Neopost submitted its proposal.
8.On October 2, 2015, the CRA asked Neopost to confirm where the signature for certification in Annex C could be found in the bid package.
9.On October 2, 2015, Neopost confirmed that the signature for certification had not been included in the bid package and provided the CRA with a signed copy of Annex C at that time.
10.On October 5, 2015, the CRA informed Neopost that its bid was non-complaint, as the certification was not signed at the time of bid closing. The CRA expressed concern that acceptance of the certification after bid closing would amount to bid repair and directed Neopost to the Web link for the supplier complaint process.
11.On October 16, 2015, Neopost filed its complaint with the Tribunal. The Tribunal issued a notice of inquiry into the complaint on October 22, 2015.
12.On October 21, 2015, 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 Canadian International Trade Tribunal Act and the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations.
13.On November 16, 2015, the CRA submitted the Government Institution Report (GIR).
14.On November 26, 2015, Neopost filed a reply to the GIR.
15.The relevant provisions of the RFP provide as follows:
PART 2 BIDDER INSTRUCTIONS
2.1 MANDATORY REQUIREMENTS
Where the words “shall”, “must” and “will” appear in the document or any related document forming a part hereof, the item being described is a mandatory requirement.
Failure to comply or demonstrate compliance with a mandatory requirement will render the bid non-responsive and the bid will not be considered further.
. . .
PART 5 CERTIFICATIONS
Bidders must provide the required certifications and associated information to be awarded a contract.
Canada will declare a bid non-response if:
. . .
- Required signatures are missing.
. . .
The bidder must submit the original of the completed Annex C: “Certifications required to be submitted at the time of bid closing” along with its bid, by the bid closing date.
. . .
ANNEX C: CERTIFICATIONS REQUIRED TO BE SUBMITTED AT TIME OF BID CLOSING
. . .
Please ensure that all the required signatures are provided at bid closing, as indicated below.
. . .
(Printed Name and Signature of Duly Authorized Agent of Bidder)
16.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. 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 provides that the Tribunal is required to determine whether the procurement was conducted in accordance with the applicable trade agreements, which, in this case, are the North American Free Trade Agreement, the Agreement on Internal Trade, the Agreement on Government Procurement, the Canada-Chile Free Trade Agreement, the Canada-Peru Free Trade Agreement, the Canada-Colombia Free Trade Agreement, the Canada-Panama Free Trade Agreement, the Canada-Honduras Free Trade Agreement and the Canada-Korea Free Trade Agreement.
17.The trade agreements require that a procuring entity provide potential suppliers with all the information necessary to permit them to submit responsive tenders, including the criteria which will be used to evaluate and, further, award the contract. Moreover, the trade agreements prohibit all forms of discrimination in tendering procedures, either generally or through the use of undisclosed criteria.
18.The trade agreements also provide that, to be considered for contract award, a proposal must conform to the essential requirements set out in the tender documentation and require that procuring entities award contracts in accordance with the criteria and essential requirements specified in the tender documentation.
19.It is well established that a procuring entity will meet these obligations when it conducts a reasonable evaluation consistent with the terms of the RFP. As it has stated in the past, unless the evaluators have not applied themselves in evaluating a bidder’s proposal, have ignored vital information provided in a bid or have based their evaluation on undisclosed criteria, the Tribunal will not substitute its judgment for that of the evaluators.
20.Annex C consists of a form whereby a duly authorized agent of the bidder confirms compliance with, and acceptance of, all terms contained in the RFP and Statement of Requirement. According to the form, the signatory certifies that he or she has read the contents of the form, that he or she has been authorized to sign the bid on behalf of the bidder and that the bid will be disqualified if the certificate is found not to be true and complete in all respects. The signatory confirms also that the bidder has submitted the bid without consultation with other competitors regarding prices, or the products or services to be delivered, and that the terms of the bid have not been knowingly disclosed by the bidder to any competitor prior to the official bid opening. The certificate concludes with a signature line which reads as follows: “Printed Name and Signature of Duly Authorized Agent of Bidder”.
21.Neopost’s argument that the handwritten signature on Annex C was not a mandatory requirement focuses on the wording of section 2.1 of the RFP and the text in Annex C. In particular, section 2.1 indicates that mandatory requirements are identified by the words “shall”, “must” and “will”. Neopost contended that Annex C does not explicitly use those words and therefore cannot be considered a mandatory requirement.
The Tribunal finds no merit to that contention because it is predicated on an improper reading of the language in the RFP and, in particular, Annex C. Part 5 of the RFP, which deals with certifications, states that “[b]idders must provide the required certifications and associated information to be awarded a contract” [emphasis added] and clearly informs bidders that bids “will” be declared non-responsive if required signatures are missing. In addition, Annex C provides that “[b]idders must submit the following duly completed certifications as part of their bid at bid closing. All certifications must be completed accurately” [emphasis added]. Furthermore, the signature line stipulates that the “Printed Name and Signature of the Duly Authorized Agent of [the] Bidder” [emphasis added] are to be included.
22.The certificate required bidders to provide multiple pieces of information, to respond to specific questions and to provide a printed name and signature. It was not open to bidders to select which responses or required information to include or exclude. Rather, the RFP clearly stated that bidders must submit duly completed certifications. The Tribunal finds that, without the printed name and signature of the duly authorized agent, the certificate cannot be said to be “duly completed”.
23.Although Neopost has argued that its bid was substantially compliant with the RFP and should not have been disqualified on the basis of a “mere irregularity”, in cases of conformance with essential criteria, the Tribunal has previously found that the test is one of strict compliance. Failure to meet a mandatory requirement is not a “mere” or minor irregularity. Such a standard, requiring all potential suppliers to meet every mandatory requirement of each solicitation document, is one of the cornerstones of the integrity of any tendering system. It ensures that all bidders are treated equitably and that all procurements are executed fairly and transparently.
24.The circumstances of this case are analogous to those in File No. PR-2007-011. The complainant in that case had its bid rejected because it had failed to submit the requisite signature. The bidder complained that this was a “minor irregularity”, but the RFP indicated that the signature was necessary for the bid to be compliant. In that matter, the Tribunal found no reasonable indication that the government institution had failed to meet its relevant obligations by declaring the bid non-responsive. On judicial review, the Federal Court of Appeal upheld the Tribunal’s decision that the signature was mandatory and that “. . . the necessary implication which flows from [the Tribunal’s] conclusion [was] that the [the Tribunal] did not consider the absence of a signature to be a minor irregularity.”
25.Similarly, in File No. PR-2011-031, the RFP in that case included a mandatory requirement whereby submissions were to be signed by a bidder’s Chief Executive Officer; however, the complainant erroneously had its bid signed by another official. The Tribunal rejected the complainant’s contention that this constituted a minor irregularity. This determination was upheld on judicial review.
26.It is well established that, as the bidder, Neopost had an onus to meet the requirement of Annex C and ensure that the information submitted as part of its bid was complete. In other words, it was incumbent on Neopost to ensure that its bid clearly and strictly met the requirement of Annex C. Given that the signature was a mandatory requirement, it could not be considered as simply a minor irregularity. As such, the Tribunal finds that the CRA acted reasonably in concluding that Neopost had not complied with the mandatory criteria of the RFP.
27.The Tribunal recognizes the unfortunate circumstances that led to the disqualification of Neopost’s bid. Nevertheless, the Tribunal cannot intervene in cases where mandatory criteria are not met, regardless of how unfortunate the circumstances may be.
28.Neopost also argued that the Standard Instructions grant the CRA the express authority to waive or request a correction of a “. . . non-material error of form . . .” and that the CRA should have exercised its discretion with regard to the missing signature in this instance. Neopost submitted a number of cases in support of its position. However, the Tribunal finds that the cases cited by Neopost are not applicable in the present instance. None of the procurements that were the subject matter of those cases were conducted within the framework of the applicable trade agreements and their attendant obligations. While they involved situations where the courts did not interfere with the exercise of the discretion to overlook a missing mandatory signature, it must be noted that none of those cases equate such discretion with a positive obligation.
29.In this case, the Standard Instructions provide the CRA with discretion, but no positive obligation in such matters. The Tribunal has previously found that, where a government institution has discretion under the provisions of an RFP, including the Standard Instructions incorporated by reference, it would not be appropriate for the Tribunal to directly or indirectly encroach upon this discretion. This is consistent with the Tribunal’s long-held practice that it will not substitute its judgment for that of the evaluators unless the evaluators have not applied themselves in evaluating a bidder’s proposal, have ignored vital information provided in a bid or have based their evaluation on undisclosed criteria.
30.The Tribunal finds no evidence of the foregoing in CRA’s decision not to exercise its discretion. As such, the Tribunal will not substitute its judgment for that of the CRA.
31.The CRA has requested that costs be awarded if it was successful in this matter. The Tribunal awards the CRA its reasonable costs incurred in responding to the complaint. In determining the amount of the cost award in this complaint, the Tribunal has considered its Procurement Costs Guideline (the Guideline), which contemplates classification of the level of complexity of cases based on three criteria: the complexity of the procurement, the complexity of the complaint and the complexity of the proceedings.
32.The Tribunal’s preliminary view is that this complaint case has a level of complexity that corresponds to the lowest level referred to in Appendix A of the Guideline (Level 1). The complexity of the procurement was low, as it involved the provision of one type of good.
33.Accordingly, the Tribunal considers the amount set out in the Guideline to be adequate in the circumstances and, as contemplated by the Guideline, the Tribunal’s preliminary indication of the amount of the cost award is $1,150.
34.Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is not valid.
35.Pursuant to section 30.16 of the CITT Act, the Tribunal awards the CRA its reasonable costs incurred in responding to the complaint, which costs are to be paid by Neopost. In accordance with the Guideline, the Tribunal’s preliminary indication of the level of complexity for this complaint case is Level 1, and its preliminary indication of the amount of the cost award is $1,150. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Tribunal, as contemplated by article 4.2 of the Guideline. The Tribunal reserves jurisdiction to establish the final amount of the award.
. R.S.C., 1985, c. 47 (4th Supp.) [CITT Act].
. S.O.R./93-602 [Regulations].
. 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, online: Department of Foreign Affairs, Trade and Development <http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-... (entered into force 1 January 1994) [NAFTA].
. Revised Agreement on Government Procurement, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/rev-gpr-94_01_e.htm> (entered into force 6 April 2014).
. Free Trade Agreement between the Government of Canada and the Government of the Republic of Chile, 1997 Can. T.S. No. 50, online: Department of Foreign Affairs, Trade and Development <http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/chile-chili/menu.aspx?lang=en> (entered into force 5 July 1997). Chapter Kbis, entitled “Government Procurement”, came into effect on September 5, 2008.
. For instance, Article 1013(1) of NAFTA provides as follows: “Where an entity provides tender documentation to suppliers, the documentation shall contain all information necessary to permit suppliers to submit responsive tenders . . . . The documentation shall also include: . . . (h) the criteria for awarding the contract, including any factors other than price that are to be considered in the evaluation of tenders . . . .”
. For instance, Article 1008(1) of NAFTA provides that “[e]ach Party shall ensure that the tendering procedures of its entities are: (a) applied in a non-discriminatory manner; and (b) consistent with this Article and Articles 1009 through 1016.”
. For instance, Articles 1015(4)(a) and (d) of NAFTA provide as follows: “An entity shall award contracts in accordance with the following: (a) to be considered for award, a tender must, at the time of opening, conform to the essential requirements of the notices or tender documentation . . . (d) awards shall be made in accordance with the criteria and essential requirements specified in the tender documentation . . . .”
. Excel Human Resources Inc. (operating as excelITR) v. Department of Public Works and Government Services (25 August 2006), PR-2005-058 (CITT) [excelITR] at para. 30; Northern Lights Aerobatic Team, Inc. v. Department of Public Works and Government Services (7 September 2005), PR-2005-004 (CITT) [Northern Lights] at para. 51; Marcomm Inc. (11 February 2004), PR-2003-051 (CITT) [Marcomm] at para. 10.
. Siemens Westinghouse Inc. v. Canada (Minister of Public Works and Government Services), 2000 CanLII 15611 (FCA); R.H. MacFarlands (1996) Ltd. (20 December 2013), PR-2013-029 (CITT) [MacFarlands] at para. 22.
. Surespan Construction Ltd. (8 May 2007) (CITT); 9198-6919 Québec Inc. o/a Verreault Inc. (1 August 2012), PR-2012-011 (CITT); MacFarlands.
. Surespan Construction Ltd. v. Canada (Attorney General), 2008 FCA 57 (CanLII) at para. 2.
. Bell Canada (26 September 2011) (CITT).
. Bell Canada v. Canada (Public Works and Government Services), 2012 FCA 162 (CanLII).
. For the principle that a bidder bears the onus to meet the requirements of a solicitation, see, for example, Thomson-CSF Systems Canada Inc. (12 October 2000), PR-2000-010 (CITT); Canadian Helicopters Limited (19 February 2001), PR-2000-040 (CITT); WorkLogic Corporation (12 June 2003), PR-2002-057 (CITT).
. Exhibit PR-2015-033-01, tab 1, section 2.2, Vol. 1.
. Menefee v. County of Fresno, 163 Cal. App. 3d 1175 (1985), Court of Appeals California, Fifth District; Raby (Excavation Gérard Raby) c. Ste-Euphémie-sur-Rivière-du-Sud (Municipalité), 2008 QCCA 1831 [Raby]; Force Construction Ltd. v. Nova Scotia (Attorney General), 2008 NSSC 327.
. See, in particular, the discussion of Raby in Demix Construction, division de Holcim (Canada) inc. c. Québec (Procureur général), 2010 QCCA 1871 (CanLII).
. StenoTran Services Inc. and Atchison & Denman Court Reporting Services Ltd. v. Courts Administration Service (24 July 2014), PR-2013-046 (CITT) at para. 51; Supermex Inc. (22 June 2011), PR-2011-012 (CITT).
. excelITR; Northern Lights; Marcomm.