Procurement practice review of the Canadian Food Inspection Agency
On this page
- I. Background
- II. Objective And Scope
- III. Results
- IV. Simplification
- V. Conclusion
- VI. Organizational Response
- VII. Acknowledgment
- Annex I: Status of Review Recommendations
1. The Office of the Procurement Ombudsman (OPO) conducted a review of procurement activities at the Canadian Food Inspection Agency (CFIA).
2. In accordance with paragraph 22.1(3)(a) of the Department of Public Works and Government Services Act, the Procurement Ombudsman has the authority to review the procurement practices of departments to assess their fairness, openness and transparency.
3. This review is based on issues and complaints brought to OPO’s attention by stakeholders, both in general and in regard to specific solicitations by various federal organizations. Based on this information, OPO has identified the three highest-risk procurement elements as: (1) the establishment of evaluation criteria and selection plans; (2) the bid solicitation process; and (3) the evaluation of bids and contract award. For the purposes of this review, these elements are defined as follows:
- Evaluation criteria and selection plans – the development of mandatory and point-rated evaluation criteria, and the identification of the selection method to determine the successful bid.
- Solicitation – the design and execution of the solicitation process, including the clarity and completeness of solicitation documents.
- Evaluation of bids and contract award – the establishment of a process to ensure the consistent evaluation of bids in accordance with the planned approach, including an evaluation plan and instructions to evaluators, and the adequacy of documentation to support the selection of the successful supplier.
4. The CFIA was selected for review as one of the top 20 federal departments and agencies in terms of the value and volume of their annual procurement activity. OPO plans to conduct similar reviews of the other top twenty Departments/Agencies over five years.
5. The CFIA was established in 1997 through the Canadian Food Inspection Agency Act and is listed under Schedules II and V of the Financial Administration Act (FAA). Reporting to Parliament through the Minister of Agriculture and Agri-Food and the Minister of Health, the CFIA has a broad mandate that encompasses food safety, animal and plant health and international market access.
6. The Contracting and Procurement Policy Division (CPPD), located in the National Capital Region (NCR), is the CFIA's centralized procurement unit. It is responsible for the acquisition of goods and services valued at $10,000 or more, as well as the acquisition of certain commodities including software, temporary help services, learning services and all contracts with former public servants. During the review period, the CPPD was headed by a Manager, Policy and Planning, acting at the PG-06 level, supported by 14 staff members.
7. During the review period, the CFIA issued a total of 3,139 contracts valued at $93.76 million. Of this total, the CPPD issued 996 contracts valued at $82.98 million on behalf of 10 branches located in the NCR and 162 regional sites.
II. Objective and scope
8. This review was undertaken to determine whether the CFIA’s procurement practices pertaining to evaluation criteria and selection plans, solicitation, and evaluation of bids and contract award, supported the principles of fairness, openness and transparency. To make this determination OPO examined whether the CFIA’s procurement practices were consistent with Canada’s obligations under applicable sections of national and international trade agreements, the FAA and regulations made under it, the Treasury Board Contracting Policy (TBCP) and, when present, departmental guidelines.
9. The following three lines of enquiry (LOE) were used to assess the highest-risk procurement elements identified in paragraph 3 above:
- LOE 1: Evaluation criteria and selection plans were established in accordance with applicable laws, regulations and policies;
- LOE 2: Solicitation documents and organizational practices during the bid solicitation period were consistent with applicable laws, regulations and policies; and
- LOE 3: Evaluation of bids and contract award were conducted in accordance with the solicitation.
10. OPO’s review covered the period from July 1, 2017 to March 31, 2019. OPO conducted an assessment of 40 procurement files which included: 13 contracts issued under standing offers and supply arrangements established by Public Services and Procurement Canada (PSPC); 14 call-ups against the CFIA-specific National Individual Standing Offers (NISO); and 13 contracts awarded through other competitive procurement processes. This review excluded non-competitive contracts, low dollar value contracts under $25,000, construction contracts, acquisition card activity and PSPC-administered contracts. Since the CPPD is responsible for all procurement activity involving contracts over $10,000, the scope of the review was limited to contracts issued by the CPPD.
11. The CFIA’s procurement practices pertaining to evaluation criteria and selection plans, solicitation documents, and evaluation of bids and contract award were assessed against the three LOEs noted above. OPO made eight recommendations to address issues identified in the review. During the course of OPO’s review, the CFIA took action to improve their procurement practices by adopting PSPC standardized procurement templates, developing procurement-related guidance materials, implementing bid evaluation kick-off meetings and ensuring that consensus evaluation meetings are chaired by a member of the CPPD.
Line of enquiry 1: To determine whether evaluation criteria and selection plans were established in accordance with applicable laws, regulations and policies
12. OPO examined a total of 40 files awarded through competitive processes, 20 of which involved a solicitation process, and the remaining 20 were call-ups issued against standing offers. Of the 20 solicitation processes that contained evaluation criteria, 11 contained both mandatory and rated criteria, 7 contained only mandatory criteria, and 1 contained only rated criteria. These files were examined to determine whether evaluation criteria and selection methodology were clearly communicated in the solicitation, not overly restrictive, and were aligned with the requirement. The method of allocating points to weighted criteria was also assessed to determine whether instructions were clearly communicated and reflected the relative importance of the criteria. The results of this assessment are presented below.
Evaluation criteria and weighting schemes were sometimes unnecessarily restrictive and may have precluded an equal opportunity to compete
13. In order to ensure fairness and transparency in the award process, the TBCP requires contracting authorities to communicate the criteria needed to meet the requirement and the weighting assigned to them. Evaluation criteria must be established before bids are solicited. They are to be recorded along with the requirements of the contract and included in the bid solicitation. Section 10.7.25 of the TBCP states that “these criteria should identify accurately all of the performance elements significant to the success of the project and should measure both the competence of the firm and the worth of its particular technical approach.” The TBCP also requires that, whenever practical, an equal opportunity to compete be provided for all qualified bidders.
14. In 16 of the 18 solicitation processes containing mandatory criteria, criteria were aligned with the requirement. However, in 2 instances the criteria were not aligned with the statement of requirement and may not have provided an equal opportunity to compete to all qualified bidders:
- One solicitation required bidders to demonstrate specialised experience translating scientific documents; however, the services were for the Human Resources (HR) branch and did not involve the translation of scientific terminology. A question submitted by a bidder during the solicitation period sought clarification as to whether the nature of the documents to be translated under this contract were expected to be scientific, medical, related to diseases of pests, etc., or regular documents of various natures. The CFIA’s posted response stated “[t]he documents to be translated will be regular documents, mainly focused on HR activities and projects – we do not expect to have any scientific terminology. In the event that we are requested to include some scientific information in any of our documents, we will be requesting the originators to provide us with the necessary translations.” This response demonstrates that the mandatory criteria requiring bidders to demonstrate five consecutive years of experience translating documents containing scientific, medical and disease terminology was not necessary to meet the requirement. As a result, including this as a mandatory criteria may have unfairly excluded firms that did not possess this specialised experience.
- Another solicitation specifically named the incumbent in the mandatory criteria and required bidders to demonstrate experience using a particular tool “from” that incumbent. The requirement was for a senior systems analyst to implement a software suite purchased by the incumbent. The procurement file contained a request from the technical authority to direct the contract to the incumbent; however, this request was denied on the grounds that the requirement did not meet one of the exceptions to competition set forth in the Government Contracts Regulations. The CFIA’s decision to deny the request to direct the contract to the incumbent demonstrates that the CFIA itself had determined that it was necessary to compete the requirement, triggering the TBCP rule which requires that an equal opportunity be provided to all bidders. Since the software was not proprietary to the incumbent, specifically naming the incumbent in the mandatory criteria without specifying that equivalent experience would be accepted had the effect of providing an unfair advantage to the incumbent while creating obstacles for other bidders.
15. In 2 of the 18 solicitations containing mandatory criteria, the solicitation contained nine or more mandatory criteria that closely aligned with the experience of the incumbents. One of these involved a $200,000 IT-consulting solicitation that contained nine mandatory and seven point-rated criteria. The incumbent was the only supplier to submit a bid of the 17 invited suppliers. That same supplier (the incumbent) had been awarded consecutive contracts by the CFIA for the previous seven years. Based on the value of the contract, the solicitation was subject to the North American Free Trade Agreement (NAFTA) and the World Trade Organization—Agreement on Government Procurement (WTO-AGP), which require the conditions for qualifying suppliers be limited to only those factors essential to fulfilling the contract.
16. Section 10.7.25 of the TBCP states that “the merits of each proposal should be compared using a weighted list of the criteria to be met. These criteria should identify accurately all the performance elements significant to the success of the project and should measure both the competence of the firm and the worth of its particular technical approach.” The weighting scale for the rated criteria should therefore be aligned with the requirement and reflect the relative importance of each criteria to the success of the project.
17. In the solicitation noted above, the weighting scale for the rated criteria allocates a disproportionate number of points for years of experience. For instance, point-rated criteria R1, R2 and R3 allocate between 15 and 20 points for 10+ years of experience developing organizational system, physical and public facing internet architectures, whereas point-rated criteria R4 and R5 allocate 15 points for only 1 year of experience using Oracle SOA Enterprise Service Bus and Lumina Analytica software. Given the relatively disproportionate allocation of points, one would expect that R4 and R5 are either more important to the success of the project, or that it is rare or not possible to have greater than 1 year of experience in these areas (e.g. the software has not been in existence for more than one year). However, the software specified in both R4 and R5 is not mentioned in the statement of requirement, which would have been expected for something essential to the success of the project. Furthermore, both Oracle SOA Enterprise Service Bus and Lumina Analytica software have been in existence for more than 10 years. As a result, it is not apparent why the weighting scale would award a similar number of points for one year of experience as for 10 years of experience, and no such rationale was found on file.
18. A review of the incumbent’s qualifications revealed that the weighting scale awarded the maximum points for the duration and type of experience held by the incumbent. Since no justification for the disproportionate weighting scale was found on file, this creates a perception that the weighting scale was designed to provide an advantage to the incumbent. This perception is exacerbated when the minimum threshold for the point-rated criteria, which requires a minimum pass mark of 79 points, is considered. The weighting scale for the point-rated (PR) criteria includes up to seven tiers of experience that correspond to various point allocations. The weighting scale for PR5 is provided below for illustrative purposes.
The bidder shall demonstrate that the proposed resource has previous professional work experience with the Lumina Analytica decision model software.
- >12 months = 15 points
- >8 months up to 12 months = 10 points
- >5 months up to 8 months = 5 points
- >3 months up to 5 months = 3 points
- <3 months = 0 points
19. For all point-rated criteria, the incumbent possessed a level of experience that corresponded to the highest possible tier, thereby resulting in maximum points and an overall score of 105. The peculiarity of the minimum threshold of 79 points is illustrated when we consider the score that would result if a bidder were to possess experience equivalent to the second highest tier, which corresponds to as little as one month less experience across each of the point-rated criteria. Table 1 illustrates the results that would flow from the application of the point-allocation scheme in a scenario where a hypothetical bidder (Bidder A) possessed 1 month less experience than the incumbent for each of the point-rated criteria, and Bidder B possessed experience that matched that of the incumbent. As the table demonstrates, the bidder with one fewer month of experience than the highest tier would be unable to achieve the minimum pass threshold of 79 points.
|Rated Requirement table 1 note 1||Bidder A
>10 years = 20 points
>7 years up to 10 years = 15 points
|9 years and 11 months||15||11 years and 1 month||20|
>10 years = 15 points
>9 years up to 10 years = 10 points
|9 years and 11 months||10||10 years and 11 months||15|
>10 years = 15 points
>8 years up to 10 years = 12 points
|9 years and 11 months||12||10 years and 2 months||15|
>1 year = 15 points
>6 months up to 1 year = 10 points
|11 months||10||1 year and 9 months||15|
>12 months = 15 points
>8 months up to 12 months = 10 points
|11 months||10||1 year and 6 months||15|
>8 years = 15 points
>6 years up to 8 years = 10 points
|7 years and 11 months||10||10 years and 6 months||15|
Certification = 10 points
No certification = 0 points
Table 1 Notes
20. The procurement practices highlighted above had the potential effect of restricting the solicitations to a limited number of bidders, impacting both the openness and fairness of the processes. Including mandatory criteria that were not aligned with the requirement may have excluded bidders who were capable of delivering on the requirement. Likewise, structuring a weighting scheme in a manner that both favors the incumbent and makes it difficult for other bidders to qualify, is inconsistent with the obligation to ensure that the process provides an equal opportunity to all qualified bidders, and that all prospective suppliers are treated fairly.
The CFIA should ensure that: 1) evaluation criteria are limited to the performance elements necessary to the success of the project and do not favour a particular supplier; 2) weighting schemes do not disproportionately skew evaluation results; and 3) minimum thresholds for point-rated criteria are reasonable.
The CFIA agrees with the recommendation. A tool kit, which will include guidance on the development of evaluation criteria and bid evaluation, along with checklists, will be developed and implemented by October 2020. Ongoing training, along with risk based monitoring, will be implemented by March 2021 to ensure compliance.
The clarity of the language used to communicate criteria and the instructions for awarding point-rated criteria should be improved
21. Section 10.3.1 of the TBCP states that “assessment and award criteria must be spelled out in the solicitation document.” These criteria must be established beforehand and adhered to strictly during the evaluation. Using clear and precise language to define the evaluation criteria and selection method helps bidders to prepare a responsive proposal and evaluators to ensure that criteria are applied equally to all bidders.
22. 5 of the 18 solicitations containing mandatory criteria included mandatory criteria that were not communicated in a clear, precise and measurable manner:
- Two solicitations required bidders to demonstrate each proposed resource possessed a “proven professional background,” but did not define how this could be demonstrated by bidders or assessed by evaluators.
- One solicitation required bidders to demonstrate experience as a Director of Research or scientific advisor, but did not define the duration of experience required (i.e. in years and months). As a result, one day of experience in this role would result in the criteria being met.
- One solicitation for laundry services contained mandatory criteria that could not be evaluated on a pass/fail basis, as it required bidders to “demonstrate how they will provide various services.” Among other elements, bidders were asked to provide details regarding how the organization of garments would be performed and how soiled garments would be collected. The way in which this criteria was worded obliged evaluators to pass or fail a proposal based on the mere presence or absence of the described information alone, and does not allow evaluators to consider the merit, or lack thereof, of the proposed service. In other words, even a nonsensical and non-hygienic proposal for collecting soiled garments would receive a “pass” grade based solely on the fact that it was submitted. No rated criteria related to the submission of this plan were included to permit evaluators to assess the merit of the proposed approach. To structure the evaluation in this manner carries several risks, including that the CFIA may end up with a supplier who does not meet the CFIA’s requirements.
- One solicitation for language training services required bidders to demonstrate that the proposed resources (a minimum of five as per the statement of work) had three years of experience teaching French and English. A question regarding the number of required resources and their qualifications was submitted by a bidder during the solicitation period. The interested bidder sought clarification as to whether the “and” should be “and/or” and whether three French and two English resources would be acceptable. The CFIA’s response stated: “we are unable at this time to say for certain how many French and or English teachers that we will require therefore the resources presented should be capable of teaching either French or English.” In clarifying that the “and” should be an “or”, the response contradicted the wording in the solicitation and was likely intended to supersede the criteria originally defined in the solicitation; however, there was no evidence of an amendment on file. Therefore the original language of the criteria, when read in conjunction with the response provided by the CFIA, was unclear and made it difficult for bidders to prepare responsive bids. If the intent of the criteria had changed, then the change should have been communicated to bidders by way of amendment to the solicitation.
23. Including ambiguous or undefined terms in mandatory criteria prevents bidders from knowing the criteria and the methods by which their proposals will be evaluated. Failure to define these terms at the outset carries the risk that bidders may be required to guess at their meaning and evaluators may struggle interpreting these terms during the evaluation process. It can also be difficult to defend against external challenges, as it is more difficult to demonstrate that criteria have been strictly adhered to when the criteria are unclear and open to multiple interpretations.
24. Section 10.7.25 of the TBCP requires weighted criteria to accurately identify all performance elements significant to the success of the project and to measure both the competence of the supplier and the worth of its particular technical approach. Section 10.7.27 of the TBCP requires that competing firms be told the measurement criteria and the weighting assigned to them, which supports transparency in the contract award process.
25. Instructions for scoring the point-rated criteria and the basis of selection were well-defined in all but 2 of the 12 files containing point-rated criteria. For example, in one solicitation to develop and deliver training related to mental health and wellness, the instructions for allocating points for point-rated criteria one and two (PR1; PR2) were precisely defined in the solicitation. In this case, bidders with six years of experience would receive one point, seven years two points, eight years three points… etc. Likewise, experience providing services to one department would result in one point, two departments two points… etc.
26. In the same solicitation, point-rated criteria three (PR3) asked bidders to provide an example of a training plan that demonstrates how the proposed resources will train new and existing Peer Supporters. The criteria also stated “[t]he following elements are examples of what could be included in the plan: Leveraging their lived experience to inspire hope in others; Build a Community of Practice to share and learn from each other; Provide a Code of Conduct to protect the confidentiality of peers.” Points were to be allocated on the basis that there was “strong evidence that the criteria assessed is present." However, the criteria did not specify the minimum components to be included in the plan. The consensus evaluation form for the successful bidder stated that full points were awarded on the basis that a “very thorough plan was presented,” which included “training modules and learning objectives…[and] how the training program meets the performance objectives of the Knowledge Matrix of the Standards of Practice for Peer Support as identified by Peer Support Accreditation and Certification Canada.” Section 10.7.27 of the TBCP states that “the principle of applying bid criteria or requirements equally to all bidders is part of Canadian contract law.” Failure to adequately define the minimum required content of the plan increased the risk of receiving highly varied proposals from different suppliers; this in turn makes it challenging for evaluators to apply the criteria equally to all bidders. Also, point-rated criteria required bidders to provide “a description of the firm’s history and related experience,” but did not define the nature of the experience required (e.g. experience that was aligned with the requirement). As a result, experience in any field would have resulted in the allocation of full points.
27. In general, the CFIA provided well-defined instructions for scoring point-rated criteria. However, much like the use of ambiguous language in defining mandatory criteria, a lack of clarity regarding the basis for allocating points for point-rated criteria creates ambiguity that can hamper the ability of bidder and evaluators to determine how criteria will be used to determine the successful bid.
28. Regarding the selection methodology, the CFIA consistently advised bidders of the manner by which the contract would be awarded. Bidders who met the mandatory criteria and exceeded the minimum point-rated criteria threshold proceeded to the next level, in which the technical rated points and price were combined to determine the highest-ranked bidder that would be awarded the contract. OPO’s review examined 20 contracts awarded through a competitive solicitation process. 19 files included a technical evaluation of proposals, and one was awarded on the basis of price alone. 12 of the 19 included point-rated criteria. In these 12 cases, the ratio of points between technical and financial sections was either 70/30 or 80/20 in favour of the technical component, which are standard ratios. In instances where the selection method involved a ratio of technical merit and price, this ratio was appropriate given the nature of the requirement. The remaining 7 files were either the lowest-priced technically-compliant bid, or lowest price-per-word in the case of contracts for translation services, both of which are standard selection methodologies.
The CFIA should implement measures to ensure mandatory criteria are clear, precise and measurable, and adequately defined to support the preparation of responsive bids and the evaluation of proposals.
The CFIA agrees with the recommendation. A tool kit, which will include guidance on the development of evaluation criteria and bid evaluation, along with checklists, will be developed and implemented by October 2020. Ongoing training, along with risk based monitoring, will be implemented by March 2021 to ensure compliance.
Line of enquiry 2: To determine whether solicitation documents and organizational practices during the bid solicitation period were consistent with applicable laws, regulations and policies
29. OPO reviewed a total of 40 files: 20 involving competitive solicitations; and 20 involving call-ups on standing offers, 14 of which were issued against NISOs. Competitive solicitations were assessed to determine whether the solicitation document was clear and contained complete information, including a clear description of the requirement, and instructions necessary to prepare a compliant bid. The design and execution of the solicitation process was also assessed to determine whether the process supported a fair, open and transparent procurement. This included an assessment of whether the CFIA has established a framework to ensure that procurement practices are consistent with laws, regulations and policies; whether the solicitation was open to the appropriate number of suppliers and for the required duration; and whether communications with bidders supported the preparation of responsive bids. The 20 call-ups against standing offers were assessed to determine whether the call-up was clear and contained complete information, including a clear description of the requirement and delivery schedule, and whether the specified contracting procedures were adhered to. The results of this assessment are presented below.
Internal procurement policies are outdated and need to be improved to ensure the adequacy of the Canadian Food Inspection Agency’s control framework
30. The TBCP requires departments to ensure that adequate control frameworks for due diligence and effective stewardship of public funds are in place and working. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has developed one of the most widely-used and accepted internal control frameworks. This framework defines control activities as “the actions established through policies and procedures that help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out.” According to this framework, policies are the means by which organizations deploy control activities, as they establish what is expected and the procedures that put them into action. A well-defined policy is a key element of a control framework that helps to ensure that procurements are carried out in compliance with rules and regulations, and is conducted in a consistent manner that enables effective management oversight.
31. OPO examined the CFIA’s procurement policies to assess consistency with the requirements set forth in the TBCP. This review did not include an assessment of the adequacy of the CFIA’s control framework as it pertains to procurement. The CFIA’s Procurement and Contracting Policy (the Policy) sets forth the principles, rules and regulations governing the CFIA’s procurement and contracting activities. Review of this policy demonstrated that high-level information regarding the CFIA’s obligations under the TBCP and trade agreements was included. For instance, the Policy states that the “CFIA must conduct its procurement and contracting activities according to Treasury Board Contracting Policy.” Appendix B of this policy “Treasury Board Contracting Policy Highlights,” provides an overview of key elements of the TBCP, including a number of elements that must be included in the solicitation.
32. While the CFIA’s internal procurement policy defers to the TBCP and is therefore consistent with its requirements, certain aspects of the policy were outdated, such as the thresholds for applicability of the free trade agreements (FTAs), whose validity expired December 31, 2009. The policy did not adequately define the key elements of the procurement process, nor were standard operating procedures for the procurement group identified, such as internal review and approval mechanisms. For instance, Appendix C—Contracting Process of the Policy is intended to identify the roles and responsibilities of the manager and contracting authority at four stages of the procurement process: Defining the Requirement, Contract Award, Contract Administration and Contract Closeout. The roles and responsibilities with regard to the solicitation are included in “Contract Award” and are limited to the following: “Technical bid evaluation is usually the responsibility of the manager. The contracting authority performs the financial evaluation. A legal review may be required prior to award of a contract.” This level of detail is not sufficient to establish what is expected of individuals holding contracting authority, nor does it establish procedures for awarding contracts. Conversely, Appendix G, which documents the CFIA’s procedures regarding the award of service contracts for temporary help services, provides a good example of an area of the policy that was well-documented and provided detailed guidance on the procedural requirements for awarding contracts for temporary help services. This section of the policy clearly identified the roles and responsibilities for technical and contracting authorities, and provided detailed instructions for each stage of the process in contracting for these services, including when to engage the CPPD, what type of information to include in the request, and the approval authorities required at the different stages of the process.
33. CPPD has begun to make improvements in this area by developing standardized processes, creating tools such as a cost savings tracker to measure the monetary value of savings under competitive processes and negotiated contracts, and delivering procurement-related information sessions to clients of the CPPD and the CFIA staff. While outside of the review period, CPPD completed Standardized Sole Source and Limited Tendering Certification in June 2019, and adopted PSPC standardized procurement templates as of May 2019. However, a robust and up-to-date policy that formally establishes contracting procedures is required in order to ensure that adequate control frameworks for due diligence and effective stewardship of public funds are in place and working.
The CFIA should ensure that procurement policies are reviewed regularly, kept up-to-date, and contain sufficient detail to clarify roles, responsibilities and procedures for awarding contracts.
The CFIA agrees with the recommendation. The existing procurement and contracting policies will be reviewed, updated and enhance by December 2020. An annual review will be performed and documented.
The design and execution of competitive solicitation processes was generally consistent with applicable rules, regulations and policies
34. The TBCP sets out detailed procedures to ensure that government contracting is carried out in a manner that enhances access, competition and fairness and results in best value. Section 10.7 includes the minimum requirements to be included in the solicitation document as well as mandatory elements related to the design and execution of the process.
35. Solicitation documents must contain work descriptions or specifications defined in terms of clear outputs or performance requirements, the objectives to be attained and time frame for delivery, in the case of service contracts, and the assessment and award criteria. These minimum requirements increase for solicitations subject to the trade agreements. For instance, the Canadian Free Trade Agreement (CFTA) requires tender notices to include: a) a brief description of the procurement contemplated; b) the place where a person may obtain information and tender documents; c) the conditions for obtaining the tender documents; d) the place where the tenders are to be sent; e) the date and time limit for submitting tenders; f) the time and place of the opening of the tenders in the event of a public opening, and a statement that the procurement is subject to the applicable trade agreement. The CFTA also prescribes certain mandatory elements related to the design and execution of the solicitation process, such as the establishment of a reasonable period of time for suppliers to prepare and submit responsive bids. Under NAFTA and WTO-AGP, the open tender period must be no less than 40 days.
36. Of the 20 competitive solicitation processes assessed for consistency with the procedures established in the TBCP, and the 7 files that were subject to one or more trade agreements, the CFIA complied with key aspects of the TBCP and trade agreement provisions, where applicable. For example, solicitations contained clear and complete information, including the instructions necessary to prepare a compliant bid. The solicitation documents consistently contained clear and complete instructions for posing questions and seeking clarification, including the timeframe within which questions could be submitted. Of the 7 files subject to NAFTA, the duration of the bid solicitation period met the 40-day requirement. For the contracts awarded through PSPC-established supply arrangements, the number of invited suppliers met or exceeded the minimums established in the master agreements.
In one instance, communications with suppliers during the solicitation period did not support the preparation of responsive bids
37. The TBCP states “government contracting shall be conducted in a manner that will stand the test of public scrutiny in matters of prudence and probity, facilitate access, encourage competition, and reflect fairness in the spending of public funds.” These principles apply to all aspects of the procurement process, including interactions with suppliers. During the bid solicitation process, suppliers may communicate with federal organizations to obtain clarifications or explanations of the content of the solicitation. For procurements subject to the CFTA, NAFTA and the WTO-AGP, the TBCP requires contracting authorities to ensure that all communications with bidders are supported by complete documentation and records to demonstrate that the procurement process was carried out in accordance with the agreements.
38. Of the 20 competitive solicitations reviewed, communications with bidders were adequately documented. When questions were submitted, responses were generally provided within 1 or 2 days of receipt, and usually to all invited parties, or were posted publically. However, in one instance, the CFIA misrepresented the existence of an incumbent in response to a bidder question. The solicitation was for a Senior IT consultant to deliver on the Human Resources Business Intelligence (HRBI) project. The contract was valued at $276,000 and was subject to the CFTA, NAFTA and the WTO-AGP. In an internal e-mail between the technical and contracting authorities, it was confirmed that the eventual winning bidder had previously been performing the work for the HRBI project under a separate contract originally awarded for the Canadian Food Safety Information Network (CFSIN) project. The internal email stated that the “[CFSIN] contract was almost out of days in March 2018, but we really needed the same type of resource to do some Stage 2 and 3 work on HRBI. So we extended that [CFSIN] contract for an additional 60 days to support HRBI.” The email stated that approximately $60,000 worth of work related to the HRBI project had been performed under the CFSIN contract. In September, 2018, Addendum No. 1 was posted in response to questions submitted during the solicitation period. The first question asked “has there been anyone in this role within the past 6 months?” The response provided by the CFIA was “No.” A second questions asked “Is there, or has there been in the past, an incumbent performing the same or similar services as those described in this Statement of Work? If so, please provide the name of the incumbent vendor, the duration of the contract, and the contract value.” The response provided was “Not in the past 6 years.” However, the internal CFIA email established that there had been an individual performing the work within the previous 6 months and that the CFIA was aware of this prior to responding to the questions.
39. In misrepresenting the existence of an incumbent, the CFIA compromised the integrity and transparency of the procurement process. These actions are inconsistent with the requirement set forth in Section 2(a) of the TBCP, which requires that government contracting shall be conducted in a manner that will stand the test of public scrutiny in matters of prudence and probity.
The CFIA should establish appropriate review mechanisms to ensure that information shared with suppliers is accurate and complete.
The CFIA agrees with the recommendation. A tool kit, which will include procedures for addressing questions from suppliers, will be developed and implemented by October 2020. Ongoing training, along with risk based monitoring, will be implemented by March 2021 to ensure compliance.
Call-ups against standing offers were insufficiently documented to facilitate management oversight
40. 20 contracts issued against standing offers were reviewed to determine whether they were awarded in a manner consistent with the TBCP and the instructions for specific procurement tools. Of these 20 contracts, 14 were issued against NISOs, and the remaining 6 were issued against PSPC-established standing offers. A standing offer is an agreement to provide goods and services, as and when requested, at set prices and terms and conditions for a specific period of time.
41. The TBCP requires procurement files “be established and structured to facilitate management oversight with a complete audit trail that contains contracting details related to relevant communications and decisions including the identification of involved officials and contracting approval authorities.” The 20 call-ups were reviewed to determine whether a complete audit trail was on file to support consistent and transparent decision-making, specifically, whether the call-up was clear and contained complete information, including a clear description of the requirement and delivery schedule, and whether the specified contracting procedures for issuing a call-up were adhered to. In addition, the contracting procedures in each tool were reviewed to assess clarity.
42. For the six contracts awarded against PSPC-established standing offers, in all but one file, documentation was sufficient to demonstrate that the CFIA had complied with the call-up procedures. In this lone case where insufficient information was provided, the standing offer had expired and the CFIA could not produce a copy of the master agreement containing the call-up procedures. As a result, OPO could not confirm that the procedures had been adhered to. The file was otherwise well-documented.
43. 14 call-ups were issued against CFIA-specific standing offers, 11 of which were subject to one or more free trade agreements (FTAs), and significant documentation issues were witnessed in all 14 files. Under the applicable FTAs, contracting authorities are required to guarantee that complete documentation and records are maintained to allow verification that the procurement process was carried out in accordance with the agreements. In the 14 call-ups issued against NISOs, the procurement files did not contain a statement of requirement or clear description of the work. For example, in the case of the seven call-ups issued for residue testing services, the description of work included in the call-up was limited to the following statement “Residue testing Oct 1/2017 to Mar 31/2018.” This is not compliant with the call-up process identified in the master agreement, which requires the CFIA to “provide the Offeror with a description of the Work… [that includes] details of the tests to be performed and a schedule indicating completion dates for the deliverables.”
44. The same master agreement requires call-ups to be issued to the qualified suppliers in a defined proportion. For example, four suppliers qualified to conduct food residue testing on fresh fruits and vegetables. The call-up procedures specify that the highest-ranking supplier for this category of testing is to receive 55 percent of the work, the second highest-ranking supplier 20 percent, the third 15 percent, and the fourth supplier is to receive the remaining 10 percent of the work. Based on the documentation provided by the CFIA, OPO was unable to confirm that the CFIA adhered to the proportional allocation requirements of the master agreement.
The CFIA should implement an effective mechanism to ensure that procurement files pertaining to call-ups issued against standing offers are sufficiently documented to facilitate management oversight and establish a clear audit trail.
The CFIA agrees with the recommendation. A checklist for call-up against a standing offer will be developed and implemented by July 2020 to ensure completeness of documentation. Ongoing training, along with risk based monitoring, will be implemented by March, 2021 to ensure compliance.
Certain practices regarding call-ups issued under a standing offer could be perceived as circumventing mandatory approval authorities
45. During the review period, the CFIA issued 72 call-ups against standing offers for chemical residue testing of food samples, 7 of which were included in OPO’s sample. Standing offers are typically used to meet precisely-defined requirements, but for which the demand cannot be accurately predicted. The call-ups at issue occurred monthly and for relatively consistent amounts, indicating the demand was known and predictable. The cumulative value of the call-ups was approximately $11.9 million for the 2018-2019 fiscal year and $19.6 million for OPO’s sample review period (July 1, 2017 - March 31, 2019). 34 of the 72 call-ups were issued to a single supplier and valued at approximately $10.4 million.
46. The call-up limitations provide the CFIA with the delegated authority to enter into a contract issued against these standing offers up to a maximum of $400,000. All requests for services (i.e. call-ups against these standing offers) that exceed the call-up limit of $400,000 can only be issued by PSPC, as the CFIA does not hold delegated approval authority above this amount. On at least ten occasions, the CFIA issued multiple call-ups to the same supplier on the same date for chemical residue testing services that were to be delivered in the same overlapping period. For example, on November 1, 2017, the CFIA issued two call-ups to the same supplier in the amounts of $395,500 and $322,050. As another example, on January 1, 2018, the CFIA issued another two call-ups to the same supplier in the amounts of $339,000 and $322,050.
47. The individual call-ups did not include a statement of work that specified the nature of the services to be rendered as a result of the call-up. In the absence of information on the nature of the chemical testing services being sought, the multiple instances of multiple call-ups to the same supplier on the same day for aggregate amounts exceeding the $400,000 threshold could be perceived as unnecessarily dividing an aggregate requirement into a number of smaller contracts, thereby avoiding contract approval authorities, i.e., contract splitting. This practice is explicitly prohibited by the trade agreements, the TBCP and the CFIA’s Procurement and Contracting Policy which states:
“Contract Splitting is prohibited and includes the following: dividing an aggregate requirement into a number of smaller contracts, thereby avoiding controls on contract approval authorities. Examples of this practice include: 1. Issuing multiple call-ups for a single requirement; thus reducing the amount of each call-up enough to be within the call-up limit stipulated in the Standing Offer Agreement. However, while a Standing Offer Agreement is not a contract, a call-up is. Therefore, the issuing of multiple call-ups to meet a single requirement is contract splitting.”
The CFIA should develop appropriate review mechanisms to ensure that procurement strategies do not unnecessarily divide aggregate requirements and circumvent approval authorities.
The CFIA agrees with the recommendation. By October 2020, the CFIA will collaborate with PSPC and establish a clear protocol for the use of the standing offer to ensure compliance and meet CFIA operational requirements. This protocol will then be included in CFIA's tool kit for standing offers. Ongoing training, along with risk based monitoring, will be implemented by March 2021.
Line of enquiry 3: To determine whether the evaluation of bids and contract award were conducted in accordance with the solicitation
48. Of the 20 competitive solicitation processes reviewed, 19 included a technical evaluation and one was awarded on the basis of price alone. The 19 files that included a technical evaluation were examined to determine whether a process had been established, complete with guidance for evaluators, to ensure: the consistent evaluation of bids; that the evaluation of bids had been carried out in accordance with the planned approach; and that files were adequately documented. The results of this assessment are presented below.
Evaluations were not consistently carried out in accordance with the planned approach
49. In order to ensure the transparency and defensibility of evaluation processes, the TBCP requires that the criteria used to evaluate proposals be communicated to bidders and included in the solicitation document, along with the method to arrive at the selection of the successful bidder. The evaluation criteria must be adhered to strictly and applied equally to all bidders. Failure to ensure the consistent evaluation of proposals increases the risk that ambiguities in the selection process may result in the contract being wrongly awarded and may call into question the integrity of the procurement process.
50. The CFIA has developed Evaluation Team Guidelines, which include instructions for assessing mandatory and point-rated criteria, and seeking clarifications from bidders. These guidelines identify the minimum documentation requirements that must be adhered to by evaluators, as well as conflict of interest and non-disclosure certifications to ensure evaluators appropriately disclose any potential conflict prior to evaluating bids.
51. OPO’s review of the 19 files for which a technical evaluation was conducted revealed that a consistent process had been established but was inconsistently applied. For example: 1) a minimum of three evaluation team members were consistently identified; 2) instructions for evaluating proposals were shared with members of the evaluation team in all but three files; and 3) the criteria used to evaluate proposals was identical to that in the solicitation document for all files. However, OPO’s review noted four cases where evaluations were not carried out in accordance with the planned approach:
- One file involved an individual evaluation that occurred after the consensus evaluation. The CFIA’s Evaluation Team Guidelines require the consensus evaluation to be carried out following the completion of individual evaluations. Consensus is then to be reached through a discussion of the weaknesses and strengths of each bid and documented in the final consensus evaluation summary grid. The dates on the individual and consensus evaluations suggest that one evaluator did not complete an individual evaluation prior to the consensus evaluation, but rather participated in the consensus evaluation and then completed the individual evaluation as a formality. Therefore, the evaluation was not carried out in accordance with the planned approach and due process was not followed.
- In two files, evaluators did not provide a rationale for awarding less than full points for point-rated criteria. The CFIA’s evaluation guidelines state “it is necessary that a complete audit trail be maintained of all decisions related to the Evaluation Process, including the rationale for each assessment.” Similarly, the TBCP requires procurement files to be appropriately documented in order to ensure fairness to all prospective contractors and transparency in the award process. Properly documenting the rationale for awarding points provides defensible support that evaluation criteria were applied equally to all bidders.
- In one case, non-responsive bids were incorrectly assessed as compliant and the contract was awarded to a bidder that failed to meet mandatory criteria. The contract involved the delivery of language training services and the mandatory criteria required resources to possess an undergraduate degree from a “recognized Canadian university.” The successful bidder submitted two resources that did not meet this requirement, but who had obtained Canadian equivalency. The resources were assessed as compliant by evaluators, who failed to strictly adhere to the criteria in the solicitation requiring a degree from a recognized Canadian university. Failure to include language in the Request for Proposals (RFP) indicating that Canadian equivalency would be accepted may have precluded competition by deterring bidders who hold degrees that would have met equivalency standards. Bids or proposals that do not meet all the mandatory requirements listed in the solicitation document must be rejected.
52. The procurement practices highlighted above represent breaches of the CFIA’s Evaluation Team Guidelines as well as the TBCP. They indicate that the CFIA had not implemented effective supervision and review mechanisms to ensure evaluations are carried out in accordance with the planned approach and are appropriately documented to support the transparency of the award process. Breaches such as out-of-order dates found on individual and consensus evaluations can discredit the evaluation process, call into question the integrity of the procurement process and provide grounds for unsuccessful bidders to challenge the contract award. During the course of OPO’s review, the CFIA took measures to improve the evaluation process by implementing a practice whereby the procurement team at CPPD conducts bid evaluation kick-off meetings and chairs all consensus evaluations.
The CFIA should establish a mechanism to ensure bid evaluations are consistent with properly designed and disclosed evaluation procedures, and are appropriately documented.
The CFIA agrees with the recommendation. A tool kit, which will include guidance on the development of evaluation criteria and bid evaluation, including procedures, will be developed and implemented by October 2020. Ongoing training, along with risk based monitoring, will be implemented by March 2021 to ensure compliance.
Procurement case file documentation was incomplete
53. Section 12.3.1 of the TBCP requires that procurement files facilitate management oversight with a complete audit trail containing details related to relevant communications and decisions, including the identification of the involved officials and contracting approval authorities. The requirement to ensure adequate file documentation extends to the actions undertaken during the solicitation period as well as the evaluation of proposals.
54. File documentation was reviewed to determine whether a complete audit trail was on file to support consistent and transparent decision-making. In general, the CFIA’s documentation was not complete, as 29 of 40 files were initially missing key documents such as a copy of the bids, records of communications with bidders, instructions to evaluators and a signed conflict of interest (COI) declaration from evaluators. During the review period, the CFIA provided the missing documentation for 6 files; however, it was unable to provide the supporting documentation for the remaining 23 files. For example: a signed COI declaration from evaluators was not present in 6 files; instructions to evaluators were not included in 3 files; and in each of the 14 call-ups issued against the NISOs, the procurement file did not contain a statement of requirement or clear description of the work.
55. Incomplete procurement files resulted in inadequately supported procurement actions that risk undermining the integrity, fairness and transparency of the procurement process. Keeping complete and detailed evaluation records is crucial to demonstrating that evaluation criteria have been applied equally to all competing bids, and demonstrating that the procurement has been carried out in a manner consistent with the CFIA’s obligations under the TBCP and applicable trade agreements. Failure to maintain complete records also places the CFIA at risk of not being able to defend challenges to the procurement process.
The CFIA should implement an effective mechanism to enforce the requirement to maintain up-to-date and complete procurement files.
The CFIA agrees with the recommendation. A procurement file checklist will be developed and implemented by July 2020. Ongoing training, along with risk-based monitoring will be implemented by March 2021 to ensure compliance.
56. OPO regularly hears from both Canadian businesses and federal officials who believe the federal contracting process is unnecessarily complex. In reviewing the CFIA’s procurement practices, OPO sought to identify opportunities to alleviate unnecessary administrative burdens placed on suppliers and federal procurement officials, and draw attention to good practices for simplifying the procurement process.
Standardisation of procurement documents to streamline procurement processes
57. The CFIA consistently used PSPC standardised forms for all call-ups, including those issued under the CFIA-specific standing offers. While outside of the review period, in May 2019 the CFIA had adopted PSPC’s standardised procurement templates. This contributes to greater simplification by ensuring consistency and uniformity across procurement processes.
Limiting the number of mandatory criteria to essential qualifications may increase vendor participation
58. 7 or more evaluation criteria were observed in six solicitations. As stated earlier in this review, mandatory criteria should be aligned with the requirement and limited to only those elements necessary to the success of the project. As a result, the number of mandatory criteria will be dependent upon the complexity of the requirement and can be expected to vary accordingly. That said, a high number of criteria increases the amount of effort on the part of suppliers to respond to the solicitation. Contracting and technical authorities should be cognisant of the possible impact this could have on the willingness of suppliers to respond to a solicitation, particularly in the case of lower dollar value requirements where the cost to prepare a proposal may exceed the benefits to the supplier of winning the contract. This process could be simplified by reducing the number of mandatory criteria to only those elements that are essential to meet the requirement.
Utilizing standing offers to meet recurrent and predictable requirements
59. As highlighted in recommendation 6, the CFIA issued 72 call-ups against standing offers for chemical residue testing of food samples during OPO’s review period. In at least ten instances, multiple call-ups were issued to the same supplier for the same period. The practice of issuing multiple call-ups to meet a single requirement places an unnecessary burden on the procurement unit. To promote simplification and increased transparency, the CFIA may wish to consider alternative strategies to meet operational requirements when such services remain relatively consistent. In such an instance, the CFIA may wish to consider structuring the requirement as a larger multi-year contract, or increasing the call-up limitation to an amount that reflects the anticipated and historic demand for such services, which has remained relatively consistent for the past five years.
60. The CFIA’s procurement practices pertaining to evaluation and selection plans, solicitation, and evaluation of bids and contract award were assessed for consistency with Canada’s obligations under applicable sections of national and international trade agreements, the FAA and regulations made under it, the TBCP, departmental guidelines, and to determine if they supported the principles of fairness, openness and transparency.
61. The solicitation documents reviewed consistently identified evaluation criteria and the selection method to determine the successful bid; however, evaluation criteria and weighting schemes were sometimes unnecessarily restrictive and may have precluded bidders from an equal opportunity to compete. Several instances were also noted in which the use of ambiguous or undefined terms may have impacted transparency by hampering the ability of bidders and evaluators to determine how evaluation factors would be used to determine the successful bid. Likewise, greater clarity was needed in the instructions for awarding points to point-rated criteria to ensure that evaluation criteria are applied equally to all bidders.
62. The design and execution of competitive solicitation processes was generally consistent with applicable rules, regulations and policies. However, OPO could not conclude that contracts issued against CFIA-specific standing offers had been executed according to the specified contracting procedures as files were insufficiently documented. In the absence of information on the nature of the services being sought, the multiple instances of multiple call-ups to the same supplier on the same day for aggregate amounts exceeding call-up limit could be perceived as unnecessarily dividing an aggregate requirement into a number of smaller contracts, thereby avoiding contract approval authorities i.e. contract splitting.
63. The CFIA has developed standardised guidance for evaluators, and has implemented a consistent process for executing the evaluation of bids. However, several instances were noted in which evaluations were not consistently carried out in accordance with the planned approach and in one case, non-responsive bids were incorrectly assessed as compliant and a contract was awarded to a bidder that failed to meet the mandatory criteria. Failure to ensure the consistent evaluation of proposals increases the risk that ambiguities in the selection process may call into question the integrity of the procurement process.
64. During OPO’s review, the CFIA took action to improve its procurement practices by adopting PSPC’s standardized procurement templates, developing procurement-related guidance materials, implementing bid evaluation kick-off meetings and ensuring that consensus evaluation meetings are chaired by a member of the CPPD. Further improvements are required to the CFIA’s internal procurement policies, which were outdated and insufficient to ensure the adequacy of the CFIA’s control framework.
65. In order to address issues identified, OPO made eight recommendations. These recommendations can be found in Annex A of this report. OPO will conduct a follow-up review in two years to assess the implementation of the CFIA’s action plan to address these recommendations.
VI. Organizational Response
66. The CFIA appreciates the opportunity to work with OPO during this review. As noted by OPO, the CFIA has already taken action to improve its procurement practices. CFIA will continue with these improvements as well as develop a plan with concrete actions and time lines for full implementation by March 2021.
67. OPO wishes to express its appreciation to the management and staff of CPPD at the CFIA for the assistance and cooperation extended to the reviewers during this assessment.
Annex I: Status of Review Recommendations
Procurement Practice Review of Evaluation and Selection Plans, Solicitation, and Evaluation of Bids and Contract Award at the Canadian Food Inspection Agency.
|Record Number||Recommendation||Criticaltable 2 note 1/Importanttable 2 note 2||Action needed to close the recommendation||Timeline for implementation|
|1||The CFIA should ensure that: 1) evaluation criteria are limited to the performance elements necessary to the success of the project and do not favour a particular supplier; 2) weighting schemes do not disproportionately skew evaluation results; and 3) minimum thresholds for point-rated criteria are reasonable.||Important||
|2||The CFIA should implement measures to ensure mandatory criteria are clear, precise and measurable, and adequately defined to support the preparation of responsive bids and the evaluation of proposals.||Important||
|3||The CFIA should ensure that procurement policies are reviewed regularly, kept up-to-date, and contain sufficient detail to clarify roles, responsibilities and procedures for awarding contracts.||Important||
|4||The CFIA should establish appropriate review mechanisms to ensure that information shared with suppliers is accurate and complete.||Critical||
|5||The CFIA should implement an effective mechanism to ensure that procurement files pertaining to call-ups issued against standing offers are sufficiently documented to facilitate management oversight and establish a clear audit trail.||Critical||
|6||The CFIA should: develop appropriate review mechanisms to ensure that procurement strategies do not unnecessarily divide aggregate requirements and circumvent approval authorities.||Critical||
|7||The CFIA should establish a mechanism to ensure bid evaluations are consistent with properly designed and disclosed evaluation procedures, and are appropriately documented.||Critical||
|8||The CFIA should implement an effective mechanism to enforce the requirement to maintain up-to-date and complete procurement files.||Important||
Table 2 Notes
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