Procurement practice review of Transport Canada
1. The Office of the Procurement Ombudsman (OPO) conducted a review of procurement practices at Transport Canada (TC).
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 3 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 bidder
4. TC was selected for review as 1 of the top 20 federal departments/agencies in terms of the value and volume of its annual procurement activity. OPO is conducting similar reviews of the other top 20 departments/agencies over 5 years.
5. TC is responsible for developing and overseeing the Government of Canada’s transportation policies and programs so Canadian transportation systems are safe and secure, efficient, as well as green and innovative. TC plays a leadership role in ensuring all parts of the transportation system across Canada work together effectively by collaborating with various groups, including Indigenous people, industry, provincial and territorial governments and international partners. Acquired services support the delivery of these programs and projects. TC manages the majority of its procurements under its own authority, but leverages Public Services and Procurement Canada (PSPC): when contract limits are outside departmental authority; where PSPC has exclusive authority to purchase goods; and where PSPC expertise and capacity are needed.
6. TC’s procurement headquarters are located in the National Capital Region, but since 2018, TC procurement has adopted a virtual organizational model, by which these positions can be occupied by individuals working out of any of TC’s regional offices. In addition, certain TC regions, namely Pacific, Quebec, and Atlantic, maintain their own decentralized procurement hubs, as do certain TC program groups.
7. According to information provided by TC, it awarded or amended 12,580 contracts at a value of $407.3M during OPO’s review period of April 1, 2018, and March 31, 2020.
II. Objective and scope
8. This review was undertaken to determine whether TC’s procurement practices pertaining to evaluation criteria and selection plans, solicitation, and conducting evaluations of bids and contract award, supported the principles of fairness, openness and transparency. To make this determination, OPO examined whether TC’s procurement practices were consistent with Canada’s obligations under applicable sections of national and international trade agreements, the Financial Administration Act and regulations made under it, the Treasury Board Contracting Policy (TBCP) and, when present, departmental guidelines.
9. The following 3 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
- LOE 3: Evaluation of bids and contract award were conducted in accordance with the solicitation
10. This report also includes a section on other observations identified by OPO through the analysis of the above LOEs.
11. OPO’s review consisted of an assessment of procurement files for TC-awarded contracts between April 1, 2018, and March 31, 2020. This review did not include construction contracts, non-competitive contracts, acquisition card activity, contracts awarded through PSPC or Shared Services Canada (SSC), standing offers (SO) or procurement activity for which TC was not the contracting authority.
12. Based on contracting data provided by TC, OPO selected 40 competitive procurement files for assessment. This judgmental sample was developed with consideration to factors including materiality and risk. The risk of selection bias was minimized through random selection of individual files meeting these pre-established factors. During TC’s final review of the draft report, TC provided new documentation which showed some contract information had been incorrectly entered. As such, observations related to 2 of the 40 files were removed. As a result of the new information, those 2 files no longer fell within the scope of the review and it was too late in the review process to replace those 2 files in OPO’s sample.
13. The reviewed files included 11 open requests for proposals (RFPs),11 contracts issued pursuant to PSPC professional services supply arrangements, 8 solicitations sent to a limited number of suppliers, 5 task authorizations (TA) against contracts and 3 call-ups against SO.
14. TC’s procurement practices pertaining to evaluation criteria and selection plans, solicitation documents, and evaluation of bids and contract award were assessed against the 3 LOEs noted above. OPO made 4 recommendations to address the issues identified in the review, which are summarized in Annex I of this report. The recommendations are based on the analysis of information and documentation provided to OPO by TC during the course of the review.
LOE 1: To determine whether evaluation criteria and selection plans were established in accordance with applicable laws, regulations and policies.
15. Section 10.7.27 of the TBCP states that “[c]ompeting firms should be told the measurement criteria and the weighting assigned to them.…The courts have ruled that the factors and their weighting must be established beforehand and adhered to strictly.…Fairness to all prospective contractors and transparency in the award process are imperative”. Using clear and precise language to define the evaluation criteria and selection methodology helps bidders prepare a responsive proposal and evaluators to apply the same criteria equally to all bidders.
16. This LOE applied to 30 files where contracts were awarded through competitive processes. Of these, 2 were awarded on the basis of price alone, 11 contained only mandatory criteria and 17 contained both mandatory and point-rated evaluation criteria. All files were examined to determine if: the evaluation criteria and selection methodologies were clearly communicated in the solicitation; were 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.
In 20 of the 30 applicable files, TC had mandatory criteria which were aligned with the requirement, not overly restrictive and did not unnecessarily favour or penalize any particular bidder or group of bidders. However, in 6 of the files, the mandatory criteria were not communicated in a clear, precise or measurable manner and in 2 of the files the criteria appeared to favour a bidder. There were also 2 files which had at least 1 unclear criterion and also appeared to favour a bidder. Details from OPO’s review of mandatory criteria are presented below.
17. Regarding the files where the mandatory criteria were unclear and/or unnecessarily restrictive—this can undermine the transparency and openness of the bid solicitation process and can cause bidders to submit non compliant or sub-optimal proposals because the requirements are not well understood. It also limits TC’s ability to effectively assess a supplier’s ability to meet an essential element of the work to be performed.
18. Examples of unclear mandatory criteria included the following:
- In 3 files, the mandatory criteria required a proposed resource to have “relevant” or “acceptable” experience without defining what relevant/acceptable was. As an example, 1 solicitation for the operations of an airport in Quebec required bidders to demonstrate a proposed airport manager had a “… minimum 2 years of acceptable experience, within the last 5 years, in an airport environment”. It cannot be left up to bidders to guess what is acceptable nor for evaluators to determine if the response noted in the bid crosses each evaluator’s individual, subjective threshold to be considered “acceptable”.
- In 4 files, the mandatory criteria did not require suppliers to provide any documentation which could be assessed on a pass/fail basis to prove the resource had the necessary certification/experience. As an example, 1 solicitation for training services required bidders to be able to provide training on locomotive emission control systems. Suppliers did not have to provide an explanation of how they were qualified to teach such topics. As such, how could TC be assured the supplier had the required experience to provide the training? Using such wording for mandatory criteria makes it more difficult for both bidders and evaluators to understand how these criteria are to be evaluated.
- In 2 files, the bidder had to demonstrate something which would be difficult, if not impossible, to assess. In 1 case for a telecom system specialist, that resource had to demonstrate experience working with other departments, “…in particular the ability to liaise effectively”; in another, for a trip travelling to 6 airports in the James Bay area, the bidder had to have 2 “experienced…[f]lightcrew members familiar with the northern operation of planes on short and gravel runways”. It would be almost impossible for an evaluator to explain to an unsuccessful bidder how its resources did not liaise “effectively” or were not “familiar” enough with a plane’s operation on gravel runways.
19. There were also 4 files for which the mandatory criteria appeared to unnecessarily favour a bidder or group of bidders; included the following:
- In 2 files, the mandatory criteria were specific enough to appear to favour a particular bidder/resource. As an example, 1 solicitation for training services required the proposed leadership trainer to have “…a minimum of  years of education in law, psychology or public administration”. There was no explanation of why the leadership trainer would need 3 years of education, but not a degree, diploma or formal certification in law, psychology or public administration.
- In 2 files where TC contracts out the operations and maintenance of small airports, a mandatory criterion required proposed resources to have experience operating the vehicles at the airport. The listed vehicle descriptions included the make/model/year of the vehicle, and some were listed down to the Vehicle Identification Number. This means that no one other than the resources currently performing, or previously performed, the work could meet that criterion. This makes it exceedingly difficult for a non-incumbent to submit a compliant bid.
Overall, point-rated criteria and rating scales were appropriate to the requirement, clearly communicated and not overly restrictive in almost all of the files reviewed. There were 3 files, however, where solicitations contained missing, incorrect or unclear information regarding point-rated criteria. Details from OPO’s review of point rated criteria are presented below.
20. In all 17 files, the criteria and applicable rating scales were appropriate, clearly communicated and, in 14 files, those rating scales were clearly defined. However, in 3 files, the rating scale was unclear, which could lead to confusion by both bidders and evaluators in how a bid was to address those criteria. An example of where it was unclear was for 2 criteria on 1 file where bidders received either 10/10 or 3/10 points depending if the bidder’s work plan either “clearly” (10/10) or “does not clearly” (3/10) demonstrate how it would meet the requirements listed in the specification.
21. There were also 2 files in which the rated point allocation scheme indicated the requirements were actually mandatory. It would be easier, and clearer to all, if the criterion was written as a mandatory one. As an example, in 1 solicitation for the economic assessment of a proposed airline acquisition, bidders were required to list their experience in the use of commonly-used statistical software, of which there are dozens. However, 2 points were awarded, per package, for experience in 3 specifically-identified software packages. As the minimum passing score for that criterion was 2/6, what it really means is that it was mandatory for bidders to have used 1 of those 3 point-getting software packages.
22. In 4 further cases, the scoring grid, while clearly stated, did not appear to reflect the importance of the criteria. As an example, in 1 solicitation for consulting services, a rated criterion assessed the bidder’s work plan for drafting a public risk management framework and the minimum pass mark was 14/20 points. The scoring grid, however, awarded 14 points for a proposed work plan which “…demonstrates some understanding of the requirement. The proposal has weaknesses, is not likely to meet the requirement or be effective and does not demonstrate good technical value to Canada”.
TC should establish a quality control framework to ensure evaluation criteria are measurable, fair and do not favour a particular bidder/group of bidders.
Overall, in almost all of 30 applicable files, the selection methodology was accurate and aligned with the requirements as described in the solicitation document; however, 2 exceptions were noted:
23. In both cases, due to a lack of documentation, TC could not demonstrate it followed the required bid-solicitation process for files related to a PSPC Temporary Help Services (THS) SO, which is no longer an active PSPC method of supply. For THS SO files, suppliers were ranked according the their charge-out rates which departments had to follow when soliciting bids, i.e. the lowest-priced supplier had to be asked first if it had available resources, and if it did not, the second-lowest priced supplier was contacted, and so on. In these 2 files, there is nothing on file indicating TC followed the THS SO right-of-first-refusal methodology.
LOE 2: To determine whether solicitation documents and organizational practices during the bid solicitation period were consistent with applicable laws, regulations and policies
24. The TBCP sets out detailed procedures to ensure government contracting is carried out in a manner which enhances access, competition and fairness and results in best value. Section 10.7 of the TBCP 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.
25. Solicitation documents must contain work descriptions or specifications defined in terms of clear outputs or performance requirements. Solicitation documents should include: bidder instructions; bid preparation instructions; clear evaluation procedures; certification requirements; security and financial requirements; resulting contract clauses; and instructions informing bidders they may request information on the results of the requests for proposal (RFP) and how their bid was evaluated. Clarity of provided information is key in supporting the Government of Canada’s obligations laid out in the TBCP.
26. This LOE applied to 35 files; 30 files for which TC either used 1 of PSPC’s methods of supply or issued a competitive solicitation as well as 5 TAs against contracts. Solicitation documents (excluding evaluation criteria and selection plans that were assessed under LOE 1) were assessed to determine whether, among other things, they contained a clear description of the requirement and instructions necessary to prepare a compliant bid. The assessment of organizational practices included factors such as whether the solicitation was open to the appropriate number of bidders and for the required duration, and whether communications with suppliers supported the preparation of responsive bids.
Most of the files reviewed included clear and complete information and instructions for submitting compliant bids, though there were 6 files for which TC could not produce most, if not all, of the solicitation documents. Of the remaining 29 applicable files, most met the documentation and process requirements; however, there were some files which were found lacking in this area. OPO notes TC’s ability to access hard-copy files was impacted by COVID-19 pandemic-related office closures and that some of the missing documents may be located in the applicable TC office. Details from OPO’s review of solicitation documents are presented below.
27. When using RFPs, TC’s solicitation process requires bidders use a 2-envelope system. Envelope 1 contains only the technical proposal and bidders are informed it is to be in sufficient detail to allow for the evaluation as per the RFP’s Evaluation plan. Envelope 2 contains the financial information and is opened only after the technical evaluation is complete and only if the technical proposal met all mandatory requirements and met or exceeded any minimum score for the rated evaluation criteria. Otherwise, the financial envelope is to be returned, unopened, to the supplier. OPO considers this to be a positive practice, which should be carried forward in the context of electronic bidding provided technical and financial proposals are kept separate. It allows both evaluators and bidders to ensure the right information is contained in the right area of the bid. In addition, if the financial bids are returned unopened, bidders can be assured the bid prices did not influence the technical evaluation, e.g. if a less-expensive bid was improperly “passed” to take advantage of the lower price. Bidders can also be confident their prices have not been revealed to other bidders.
28. Regarding the 6 files for which TC was unable to provide a majority of the solicitation documents, they fell into 2 categories:
- Competitive files—these are complete, discrete files and must, therefore, contain all documentation necessary to demonstrate all TBCP requirements were met in awarding the contract. In 2 cases, TC did not have the solicitation documents. Missing documentation will be addressed under LOE 3.
- TAs—Some contracts are structured to allow Departments to identify a definable work package (the TA) for the contractor to complete. Unlike a competitive file, the contract provides the administrative structure under which the work will be done. The TA process is therefore streamlined, because it only deals with qualifying a resource to complete the work package. Another significant difference between the TA and competitive files is that, for TAs, there is not another supplier—if the proposed resource does not meet the TAs requirement, the process will be re-done and the company will have to find another resource. In 4 cases, however, the documentation on file did not demonstrate the contract-defined TA process had been followed.
29. For those files for which there was adequate solicitation documentation, there were 4 files where it was unclear if TC invited the correct number of suppliers. There were 2 cases where it was unknown if TC followed the correct “right-of-first-refusal” solicitation process or if TC bypassed certain suppliers and went directly to the contract awardees. In the third case, TC was required to invite 15 suppliers, but it appears TC only sent the solicitation to 10 suppliers. In the final case, TC did not have any record of how many suppliers were actually invited.
Communication with suppliers
In a majority of files reviewed, where applicable, there was evidence communication with suppliers during the solicitation period was appropriate. In 13 cases, however, communications with suppliers were not captured in the file. Details of OPO’s review are presented below.
30. Section 2.a of the TBCP states government contracting shall be conducted in a manner which 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”. Section 12.3.1 further states procurement files “…shall be established and structured to facilitate management oversight with a complete audit trail that contains details related to relevant communications and decisions…”.
31. These requirements apply to all aspects of the procurement process, including interactions with suppliers. During the bid solicitation process, suppliers may communicate with contracting authorities to obtain clarifications or explanations of the content of the solicitation. For procurements subject to the Canada Free Trade Agreement and the World Trade Organization’s Agreement on Government Procurement, section 12.3.2 of the TBCP requires contracting authorities to ensure 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. Any significant information given by a contracting authority to a supplier with respect to a particular procurement must also be given simultaneously to all other interested suppliers.
32. In 13 cases, addenda responding to questions were issued, but for which there was no record of when the question was asked or by whom. Without knowing this, OPO is unable to determine if all suppliers’ questions were answered with the same speed and, therefore, that they all were treated equally in getting timely clarifications needed to assist them in crafting their bids.
33. After the solicitation process is completed and bids evaluated, TC informs bidders of the evaluation results via either a “regret” letter, advising the bidder it was not the successful bidder, or an award letter advising the bidder it won and that the contractual documents will follow shortly.
34. “Regret” letters are sent to unsuccessful bidders and should offer an explanation of why their bids were not selected. TC’s regret letters were inconsistent in the amount of information they provided. In 1 file, the letter was excellent and explained each score the bidder obtained for every rated criterion. In another file, however, the letter just stated the bidder would not be awarded the contract but gave no information about its bid; it did not advise if the bid was not compliant, compliant, lost on price, etc. In another file, the letter advised bidders to contact the technical authority, which differs from the normal practice of having the contracting authority manage the entire solicitation process. There were also 2 files in which different “regret” letters were sent to the bidders, i.e. the letter sent to some bidders stated the contract would not be placed with them; the letter sent to other bidders also explained how their proposal compared to the winning bidder. These last 2 examples were of particular concern, because it appears TC treated bidders unfairly—some received more relevant information than others.
TC should review and update its Contract Procedures Manual and any model templates to reflect current procurement policies, especially as it relates to information exchanges with suppliers. In addition, "regret" letters should consistently include an outline of the factors from the bid and criteria that caused the bid to be unsuccessful.
LOE 3: To determine whether the evaluation of bids and contract award were conducted in accordance with the solicitation
35. In order to ensure the fairness and defensibility of evaluation processes, section 10.7.27 of the TBCP requires that evaluation criteria be adhered to strictly and applied equally to all bidders. Failure to ensure the consistent evaluation of proposals increases the risk ambiguities in the selection process result in the contract being wrongly awarded. OPO examined how the mandatory and rated criteria were evaluated as well as if other administrative requirements of a solicitation were met.
36. Of the 35 competitive solicitation processes reviewed, 30 files had a technical/financial evaluation leading to contract award and 5 were for TAs under an already-awarded contract. These 35 files were examined to determine whether a process had been established 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.
In 17 files, the bids were missing complete records about either the individual or consensus evaluations. For the 18 files for which there were complete evaluation results, 11 showed inconsistencies in the evaluation of bids and deviations from the planned approach.
37. Prior to the evaluation of the technical component of bids, TC contracting authorities provide the technical evaluators with Evaluation Guidelines explaining how the evaluation process is to proceed. Included is a form to be signed by each evaluator before the technical bids are released for evaluation. Among other things, the forms state the evaluator agrees that:
- The bids shall be treated confidentially
- The evaluator is not in a conflict position
- Prior to consensus meetings, the evaluator shall not discuss the evaluation with other evaluators
- The evaluator does not know the prices of the bid
38. This signed form was not found on 15 of the 35 applicable files and in 2 cases, the identity of the evaluators was unknown.
39. OPO’s review found that, in 10 files, bids were not disqualified for missing either a mandatory or required administrative evaluation criterion and/or that the evaluation of the rated criteria was not done in accordance with the solicitation:
- In 7 cases, information was either not provided by the bidder or the file does not indicate TC properly verified the information provided by the bidder:
- In 2 cases, winning bidders did not provide mandatory curriculum vitae (CV) for their proposed resources. In 1 case for the management of an airport in Quebec, the evaluators noted a bid was missing a CV for 1 of the 7 proposed resources. The contracting authority advised them to not disqualify the bid solely on this basis because: (a) the solicitation did not require the CV to be a separate document; (b) there was no description of what information had to be in a CV, and (c) the solicitation did not require the CV to be evaluated in any way and that its real purpose was just to identify the proposed resource. It appears TC used the weaknesses in its own solicitation drafting to allow a bidder, which did provide 6 other CVs in that same bid, to stay in the competition. In this case, there was another compliant bidder who should have been considered for contract award.
- In 2 other cases, the bid was missing required documentation to either prove its proposed resources had the necessary experience or that the company had the necessary corporate experience/equipment.
- In 3 files, the documentation did not include anything confirming:
- TC verified the winning bidder attended a mandatory site visit:
- TC contacted references to confirm a resource’s language capabilities:
- TC conducted an interview to confirm a resource’s language capabilities.
- In 3 cases, administrative requirements, which do not relate to completing the work, must, nonetheless, be met by each bidder. In 2 cases, the bidder did not fill out their financial proposal properly and, in the third case, the bidder changed the standard terms and conditions of the solicitation document, which is not allowed. In all cases, TC continued with the evaluation.
40. TC solicitation documents all state that failing a mandatory criterion will result in the disqualification of the bid. As such, given the above and the lack of related disqualifications, TC staff should re-examine evaluation criteria to determine if they are, in fact, to be judged as mandatory to meeting the solicitation’s requirement.
41. There were also 4 cases where the scoring for the rated criteria did not reflect the listed scoring grid:
- In 1 case, some of the rated criteria required bidders to provide information about the experience of its proposed resources in a certain format – the dates had to be couched in terms of years/months of engagement and the start and end dates of work. The (only) bidder did not do so, in many cases only the year was listed, i.e. “1993 to 1994”, which could indicate an engagement of between 2 days and 24 months, but TC scored it nonetheless.
- In 1 other case, 1 rated criterion required bidders to demonstrate up to 4 different experience elements in their response. However, the TC evaluators’ notes state they decided to only award points for experience related to the first and fourth element of that criterion.
- There were also 2 cases which were missing evaluation results and so OPO could not confirm how the scoring was achieved:
- In 1 case, bidders were awarded 6 points per qualifying event—TC awarded the bidder 22.5 points even though the scoring grid did not allow for part marks:
- In another case, only 1 of the 3 individual evaluations were on file. The consensus score for the only bid just met the minimum, 49/70, but the only individual score on the file was 28/70.
42. By not conducting the evaluation in the manner prescribed by the solicitation, TC has exposed itself to several risks including awarding the contract to either a non-compliant bidder or the wrong compliant bidder. It also means TC cannot defend and explain its decisions and actions and prove that they were made in accordance with the applicable laws, regulations, and policies.
TC should establish a process to review technical evaluations to ensure they: (1) adhere strictly to the evaluation criteria in solicitations; (2) are carried out in accordance with planned approaches; and (3) are appropriately documented.
In most files, the procurement file documentation was incomplete. OPO’s observations regarding file documentation are detailed below.
43. 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.
44. File documentation was reviewed to determine whether a complete audit trail was retained to support consistent and transparent decision-making. In general, TC’s documentation was not complete, as 30 of 38 files were missing documents. However, it must be noted many of the “missing” documents may be located, in hardcopy form, in the applicable TC office. TC provided OPO staff with whatever relevant documentation it had from its electronic record keeping system. However, due to the COVID pandemic, TC staff could not return to their offices to search for some of the missing documents.
45. 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 for 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 TC’s obligations under the TBCP and applicable trade agreements.
TC should establish a mechanism to enforce the TBCP requirement to document every decision of business value and maintain up-to-date and complete electronic procurement files.
46. Within OPO’s random file selection, there were 2 files awarded by 1 of TC’s decentralized regional procurement units. Both files were for the same service, the salvage and disposal of boats which had sunk or been abandoned near or in Canada’s waterways.
47.In both cases, a TC employee, who is not a contracting officer, e-mailed an unknown number of suppliers a SOW and little other solicitation documentation, i.e., the bid selection methodology, what information had to be included with the bid (In 1 case, the entire winning bid was “Disposal/Demolition of [Ship Name] $108,000”) or a copy of the draft contract. It is unknown if any interaction took place between the invited suppliers and TC until that TC employee received the bids. That employee evaluated the bids and then advised another employee, who does appear to be a contracting officer, with the results of whatever evaluation took place. That second TC employee then drafted and signed the contracts after conducting an Integrity Regime verification for the winning bidders.
48.There was almost no formal documentation on the files and neither file provided assurance the solicitation processes were conducted in an open, fair or transparent manner. These files have been brought to the attention of TC’s Deputy Minister for further consideration as appropriate. As part of the practice review process, OPO follows up 2 years after the publication of the review report to track the progress TC has made on the recommendations in the report. OPO will also be following up on any outcome to the Deputy Minister’s inquiries into these 2 files.
49. OPO regularly hears from both Canadian businesses and federal officials who believe the contracting process is unnecessarily complex. In reviewing TC’s procurement practices, OPO sought to identify opportunities to alleviate unnecessary administrative burdens placed on bidders and federal procurement officials, and draw attention to good practices for simplifying the procurement process.
50. TC generally uses federal government “standard” solicitation documents and processes. This contributes to simplification by improving consistency and uniformity across procurement processes. Care should be taken when drafting solicitation documentation to ensure consistent alignment of all information provided in solicitations including bidder instructions, evaluation criteria, selection methodology, requirements and all related details.
51. As noted above, one good practice TC has is its use of the 2-envelope system; this simplifies the presentation of the bids for the evaluators and makes it less likely information will be missed because it was not found in the right part of a bid.
52. In 2 files, a mandatory criterion required the proposed resource to have “experience” without specifying how extensive the experience had to be, i.e. a proposed resource with 1 day of experience could, theoretically, pass that criterion. It therefore appears TC is including mandatory requirements which are not, in fact, essential to the completion of the work. The administrative burden in complying with the criterion would be more justifiable if the actual level of experience were commensurate with the required work. Therefore, in such circumstances, the requirement should either be tailored to the amount of experience that was essential to perform the work or the requirement should be removed.
53. TC’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 Financial Administration Act and regulations made under it, the TBCP, departmental guidelines, and to determine if they supported the principles of fairness, openness and transparency.
54. Regarding LOE 1, for the files for which there was adequate documentation to review the entire file, OPO found that evaluation criteria and selection plans met requirements set out in applicable laws, regulations and policies and that for the most part, mandatory and point-rated criteria were clearly communicated.
55. However, there were issues regarding unclear evaluation criteria, where mandatory or rated criteria had vague or poorly defined descriptors in 8 files. There were also 4 files where the evaluation criteria appeared to favour a bidder. Vague criteria can lead to incorrect bids and improper evaluations and overly specific criteria can lead to a lack of bids as suppliers will not expend resources on a contract they do not believe they have a fair chance of winning.
56. Regarding LOE 2, OPO found that, with the exception of those files for which documentation was missing, solicitation documents and actions taken by TC during the solicitation process were, in most cases, consistent with applicable rules. In all but 4 cases this means solicitations were: made available to the appropriate number of suppliers; for the correct length of time; and, included clear and complete information and instructions for submitting bids.
57. Certain shortcomings were noted regarding some aspects of correspondence with suppliers, including communications during the solicitation period and when advising bidders of the evaluation results via regret letters. Ensuring good communication with suppliers will allow for more transparent and efficient solicitation processes.
58. Regarding LOE 3, OPO found that, for those files for which OPO could confirm all aspects of the evaluation, TC staff either missed, or ignored, what could have been a disqualifying flaw in 10 files. Proper evaluation of proposals supports the integrity of the procurement process and reduces the risk that results of those processes would be called into question or that TC awards the contract to either a non-compliant bidder or the wrong compliant bidder.
59. File documentation was also found to be incomplete in 30 of the files, however TC’s ability to access hard-copy files during the COVID pandemic was noted. Maintaining well documented electronic files enables departments to demonstrate fairness and transparency in their procurements and provides support for procurement decisions taken should those decisions be challenged.
60. In order to address issues identified, OPO made 4 recommendations regarding TC’s overall contracting processes. These recommendations can be found in Annex I of this report.
61. In addition, there were 2 specific files which were brought to the attention of TC’s Deputy Minister due to the number of concerns OPO had regarding the apparent deviations from established procurement processes.
VI. Organizational response
62. TC is in agreement with the recommendations contained in this report and recognizes the importance of rigorous and well-documented procurement practices as a key factor in delivering its mandate. TC will address these recommendations in accordance with the action plan provided below and is committed to ensuring its procurement practices are sound and support the principles of fairness, openness and transparency.
63. TC thanks OPO and the review team for its thoroughness and the professionalism throughout the review period.
64. OPO wishes to express its appreciation to TC’s contracting staff for their assistance and cooperation extended to the reviewers during this assessment.
Annex I: Departmental response and action plan
Procurement practice review of evaluation and selection plans, solicitation, and evaluation of bids and contract award at Transport Canada (TC)
|Number||Recommandation||TC response / Action plan||Timeline for implementation|
|TC should establish quality control framework to ensure evaluation criteria are measurable, fair and do not favour a particular bidder/group of bidders.||TC will implement a training activity with Procurement Officers to review these observations in detail and ensure Procurement Officers understand how to apply the existing guidance. TC will ensure all TC Procurement Authorities, including new hires, complete the training on Bid Evaluation and Contractor Selection Methodologies. TC will also provide department-specific training to its Procurement Officers on best practices for drafting evaluation criteria.||Discussions and meetings with procurement management and staff regarding OPO’s observations and recommendations have already begun and will continue over the coming months. Additional training is expected to be made available by Q3 of 2021-22 through both government and contracted sources.|
|TC will update its internal TC training materials for its “Contracting for Managers and Project Authorities” course to reflect the observations noted by OPO.||Course materials will be updated by August 2021.|
|TC will enhance its Contracting Peer Review Process to ensure further quality control is applied to evaluation criteria. TC will also implement increased internal monitoring activities.||Both the TC Peer Review Process and the Monitoring of Contracting Activities Framework will be updated and changes implemented by Q4 of 2021-22.|
|TC should review and update its Contract Procedures Manual and any model templates to reflect current procurement policies, especially as it relates to information exchanges with suppliers. In addition, “regret” letters should consistently include an outline of the factors from the bid and criteria that caused the bid to be unsuccessful.||TC will develop and make available standardized templates for Regret Letters. The standardized format will be mandatory for all subsequent procurement activities.||New templates will be finalized and made available by July 2021.|
|TC should establish mechanisms to ensure bid evaluations: 1) adhere strictly to the evaluation criteria in solicitations; 2) are carried out in accordance with planned approaches; and 3) are appropriately documented||In addition to the various training activities identified in response to “Recommendation 1”, TC will develop standardized templates and revised guidelines for conducting bid evaluations, which will be shared with all Procurement Officers.||New bid evaluation templates and guidelines will be finalized and made available by September 2021.|
|TC Procurement will review its information management practices and will provide standardized guidelines to Procurement Officers on which documents must be kept on file.||A digital file checklist will be developed and implemented by October 2021. The TC Monitoring of Contracting Activities Framework will be developed in alignment with the checklist.|
|TC should establish a mechanism to enforce the TBCP requirement to document every decision of business value and maintain up-to-date and complete procurement files.||TC recognizes the importance of maintaining and ensuring adequate file documentation. TC Procurement will review its information management practices and will provide standardized guidelines to Procurement Officers on how to create and manage their digital files.||A digital file checklist will be developed and implemented by October 2021. The TC Monitoring of Contracting Activities Framework will be developed in alignment with the checklist. A guidance document will accompany the checklist.|
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