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Cabinet (Fed) - Procurement. ADGA Group Consultants Inc. v. Canada (Attorney General) [government procurement]
In ADGA Group Consultants Inc. v. Canada (Attorney General) (Fed CA, 2025) the Federal Court of Appeal allowed a JR, this brought against a CITT dismissal of "a complaint [SS: under CITTA s.30.11 'Complaints by Potential Suppliers - Filing of complaint'] by ADGA Group Consultants Inc. (ADGA) that the Department of Public Works and Government Services (also known as Public Services and Procurement Canada or PSPC) wrongly awarded contracts to RHEA Inc. and Paladin Technologies Inc. (RHEA/Paladin) for the provision of technical resources and services for the electronic security systems used by Correctional Service of Canada".
Here the court distinguishes between "procurement and contract administration", in this CITTA s.30.11 context:[8] There is no question that the Tribunal directed itself to the correct legal principles which guide the demarcation between procurement and contract administration. The Tribunal considered subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C. 1985, c. 47 (4th Supp.), and the definition of "“any aspect of the procurement process”". It defined the procurement process as "“the process that begins after an entity has decided on its requirement and continues through to and including contract award”" (Tribunal Decision at para. 121, citing WTO-AGP, "“Canada – General Notes – Annex 7”", General Note 4, online: ). The Tribunal also considered decisions in its own jurisprudence distinguishing the procurement process from contract administration (Eclipsys Solutions Inc. v. Canada Border Services Agency (2016), PR-2015-038 (CITT) at para. 39). In identifying where the procurement process ended and the contract began, the Tribunal considered its mandate as expressed by this Court in Canada (Attorney General) v. Almon Equipment Limited, 2010 FCA 193 (Almon), specifically to ensure fairness in the procurement system, competition among bidders, efficiency, and integrity (Almon at para. 23).
[9] Drawing the line between matters that affect the procurement process and the administration of the resulting contract is very much the bailiwick of the Tribunal. A decision in this regard will not be set aside unless it is unreasonable considering the legal and evidentiary constraints. In its analysis the Tribunal rightly noted that substitutions were expressly permitted under the contract. The Tribunal also noted that the employees hired by RHEA/Paladin and proposed as substitutes became available after ADGA began to issue termination notices and that the notices of substitution were only sent after the new contract with RHEA/Paladin came into effect (Tribunal Decision at paras. 138, 142). The Tribunal accepted the Attorney General’s characterization of the evidence and determined that the potential compromise of mission critical systems warranted acceptance of the replacements (Tribunal Decision at paras. 153-155). I see nothing unreasonable in this.
[10] The Tribunal then looked at whether the acceptance of the substitutions proposed by RHEA/Paladin altered or changed the contract from what was required by the RFP. The Tribunal referred to previous cases in which it found a government entity had conducted a different procurement given its actions after the award of the contract. However, it distinguished such cases on the basis that they dealt with goods, rather than services:Nor can the circumstances of this case be characterized as PSPC accepting services that differ from those specified by the RFP. Cases where the government entity has been found to have conducted a different procurement after the fact have involved situations where the tender pertained to goods having specific, objective specifications. The goods supplied did not comply with those specifications or reflected distinct variations. In the present case, the specifications of the RFP are not specific to individual persons or resources but rather pertain to qualifications and work experience that are not inherently reproducible as between individuals. During bid evaluation, the proposed resources are assessed and scored relative to the prescribed assessment criteria.
(Tribunal Decision at para. 152) [11] This is an error. In this context, there is no distinction between goods and services as asserted. The provision of services can be, and often is, assessed on objective, mandatory criteria, such as a prescribed level of certification, training or years of experience (see for example, Heiltsuk Horizon Maritime Services Ltd./Horizon Maritime Services Ltd., 2021 CarswellNat 4402 (CITT) at para. 41, and its sequel, Heiltsuk Horizon Maritime Services Ltd. v. Atlantic Towing Ltd., 2023 FCA 88). If the mandatory requirements are met, professional services are then often also assessed on a more subjective basis, or "“rated”". In this case, although pertaining to services, the RFP contained both mandatory and rated criteria. Under the terms of the RFP, if the proposed resource did not meet the mandatory criteria, the bid is disqualified.
[12] The Tribunal did not sufficiently analyze this argument. The Tribunal’s finding that RHEA/Paladin’s certifications were true at the time of the tender is not an answer to the question raised before it as to whether, in accepting substitutions after the award which allegedly lacked the mandatory requirements under the RFP, the government conducted a new and different procurement.
[13] In its written submission, the Attorney General says that ADGA is not entitled to challenge Canada’s acceptance of the substitutions "“when they were later proposed by RHEA/Paladin for different roles following the award”". As a general proposition, this is correct, but it is not responsive to the argument that they were substituted for roles for which they did not meet the mandatory requirements. Counsel suggests that we can assume that the individuals gained the necessary experience during the currency of the RFP. This is a bridge too far. It is one thing to ask a court to fill in a blank or gap in the reasoning, it is quite another thing to ask it to assume certain facts exist.
[14] There is a distinction between a clause dealing with the availability of resources in an RFP and a clause dealing with the substitution of resources after the award and during the contract. The clauses have different purposes and are governed by different principles. The government, as a procuring entity, has the right to deploy the resources contracted for as it considers appropriate. But, as the Tribunal itself explained, this authority does not allow the government, through the power of substitution, to change the contract into something different from that contemplated by the RFP.
[15] The Tribunal concluded that the large number of changes and substitutions was driven by the exigent circumstances and the availability of newly released staff from ADGA and thus were a matter of contract administration. The same cannot be said about the substitution of persons to positions for which it was argued, before the Tribunal, the substitutes lacked the minimum objective qualifications. On this issue, the reasons are silent. The public policy reasons requiring decision makers give reasons for their decisions are well understood. Reasons justify the result and ensure that the losing party knows why he or she has lost such that informed consideration can be given to grounds for appeal.
[16] I draw no conclusion whatsoever as to whether the individuals were, in fact, substituted into positions for which they did not have the minimum qualifications of the RFP. That is a finding of fact for the Tribunal to make. However, it was a key assertion made by ADGA before the Tribunal and it was not addressed. If the Tribunal finds this to be the case, it must then assess the implications for the RFP process; put otherwise, whether the substitutions, either by their nature or quantity, and taking into account the changed circumstances and concerns for operational disruption, changed the contract into something that was not contemplated by the RFP.
[17] I would therefore allow the application in this limited respect and remit it to the Tribunal for redetermination.
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