Review of a complaint: Acquisition of Senior Leadership Development Services by the Public Health Agency of Canada

August 2022

The complaint

1. On February 25, 2022, the Office of the Procurement Ombudsman (OPO) received a written complaint from a supplier (the Complainant) regarding a contract awarded by the Public Health Agency of Canada (PHAC). The contract was for the provision of Senior Leadership Development Services under the ProServices Supply Arrangement. The contract, valued at a maximum of $6,300.00 (applicable taxes extra), was awarded on February 17, 2022.

2. The Complainant contacted OPO because it did not agree with the evaluation of its proposal. The Complainant stated the Basis of Selection in the Request for Proposal “was very vague” as it only stated that '[a] bid must comply with the requirements of the bid solicitation and meet all mandatory technical evaluation criteria to be declared responsive". The Complainant added that PHAC had refused to consider the financial component of the bids and that PHAC should have awarded the contract to the lowest priced compliant bidder.

3. This complaint raised the following issue:

Did PHAC improperly evaluate the proposals and award the contract to the wrong bidder?

4. On February 28, 2022, OPO confirmed the complaint met the requirements of the Procurement Ombudsman Regulations (the Regulations) and it was considered filed.

Mandate

5. This review of complaint was conducted under the authority of paragraph 22.1(3)(b) of the Department of Public Works and Government Services Act and sections 7 to 14 of the Regulations.

6. Pursuant to subsection 9(2) of the Regulations, the Procurement Ombudsman requested PHAC provide all departmental records associated with the procurement and the award of the contract in question, as well as PHAC’s procurement policies and guidelines in effect at the time of the solicitation. The Procurement Ombudsman also requested the Complainant provide any additional information not submitted as part of the complaint.

7. The chronology of events and the findings in this report are based on the records provided by the Complainant and PHAC, as well as relevant publicly available information. The failure by either the Complainant or PHAC to disclose any relevant records or information could impact the findings of this report.

Chronology of events

8. On January 20, 2022, PHAC sent a request for proposal (RFP) via e-mail addressed to 2 suppliers, both of which ultimately submitted a bid. Bidders had to meet a single mandatory requirement and submit a price for 1 Senior Leadership Development Consultant. The deadline for submitting proposals was January 26, 2022.

9. On January 25, 2022, the Complainant submitted its proposal via e-mail to PHAC, per the RFP instructions.

10. On January 26, 2022, the other bidder submitted its proposal by replying to the original e-mail from PHAC but replied to all the recipients, that is including the Complainant. As a result, the Complainant received a copy of the other bidder’s proposal prior to the bid close date and time.

11. Later that day, the Complainant submitted a revised proposal to PHAC via e-mail, with a new, lower price – one that was lower than the price quoted by the other bidder.

12. On January 28, 2022, PHAC sent an e-mail to the other bidder to acknowledge receipt of their proposal and to advise that PHAC had removed the Complainant’s e-mail address from their email communication. The other bidder apologized and thanked PHAC for letting it know of the error.

13. On February 3, 2022, PHAC completed its evaluation of the 2 proposals.

14. On February 17, 2022, PHAC awarded the contract to the other bidder.

15. On February 23, 2022:

At 5:59 PM PHAC sent a “regret” e-mail to the Complainant, advising it that the contract had been awarded to the other bidder for $6,300,00 (excluding taxes). The e-mail also stated that “[a]lthough your bid was found to be responsive to the mandatory requirements of the solicitation, and to assist you in responding to future solicitations, you are informed that your bid was evaluated as follows in comparison to the successful bid” and included the technical evaluation point totals for both the successful bid and the complainant’s bid
At 6:19 PM, the Complainant responded and asked “how the financial bid was considered in the award of this contract? Both bids were compliant and my understanding in this situation, the government must award to the lowest cost compliant bid.”

16. On February 24, 2022, PHAC replied to the Complainant stating:

“I noticed that the other vendor inadvertently replied to all while submitting their bid. You should not have received the other vendor [sic] financial bid.”

Basis of Selection:

was not the lowest cost compliant bid; and
As per article 4.2 Basis of Selection of the RFP: “A bid must comply with the requirements of the bid solicitation and meet all mandatory technical evaluation criteria to be declared responsive.”

17. On February 25, 2022, the Complainant replied to PHAC stating it disagreed with PHAC’s assessment and it would be requesting assistance from OPO, and then filed a formal complaint with OPO.

18. Later that day, PHAC replied to the Complainant, advising it that PHAC was reviewing the file. PHAC also advised the other bidder that the RFP was under review and instructed it to not start work.

19. On February 28, 2022, a month after having sent its proposal to the Complainant, the other bidder sent an e-mail to the Complainant, stating its proposal had been sent to the Complainant in error and it contained proprietary and business-confidential information intended for PHAC’s use only. The e-mail also stated the Complainant did not have permission to “use, review, retransmit, distribute, reproduce or take any action n [sic] in reliance upon this message” and requested that the e-mail be deleted. Later that day, the Complainant confirmed to the other bidder that it would delete the e-mail.

20. On March 8, 2022, OPO advised PHAC and the Complainant that it launched its review of the complaint.

Analysis of issues and findings

Issue 1: Did the Public Health Agency of Canada improperly evaluate the proposals and award the contract to the wrong bidder?

21. The Complainant stated: “The basis of selection in the contract was very vague. Simply “A bid must comply with the requirements of the bid solicitation and meet all mandatory technical evaluation criteria to be declared responsive.” Two compliant bids were received both scoring above the threshold for a senior consultant. My Bid scored 105 and the other bid scored 115. From a financial perspective my bid was the lowest cost. The Contract authority has refused to consider the financial part of the bid as the winning bidder inadvertently sent her response to all participants in the solicitation. From my perspective this contract should have been awarded to the lowest cost, compliant bid.”

22. The Department’s response to OPO stated: “Following a review of the solicitation and contract award phase, PHAC identified three main issues:

an unclear basis of selection clause in the Request for Proposal (RFP): in cutting and pasting the appropriate clause form the Standard Acquisition Clauses and Conditions (SACC) Manual, the employee in charge of this file only copied half of the clause, and omitted the following sentence: The responsive bid with the lowest evaluated price will be recommended for award of a contract;
a vendor who wrongly sent the Complainant a copy of their proposal: the fairness of the competitive process was compromised when the other vendor erroneously sent the Complainant a copy of their proposal. Subsequently, the Complainant submitted a revised financial proposal with a lower dollar value that [sic] the financial proposal submitted by the other vendor; and
an error in the evaluation of process: due to the absence of technical criteria. The evaluation of the proposals was wrongly [sic] using the points attributed through the flexible grid to compare the level of qualification of the resource proposed by the two bidders, which resulted in the contract having been awarded to a firm with a higher financial proposal.”

Analysis of Issue 1

23. PHAC issued the RFP under the ProServices Supply Arrangement—a mandatory, government-wide method of supply for the provision of certain professional services below the Canada-Korea Free Trade Agreement threshold, currently $100,000. The evaluation procedures were described in section 4.1:

“(a) Bids will be assessed in accordance with the entire requirement of the bid solicitation including the technical and financial evaluation criteria.”

24. The technical evaluation contained a single mandatory criterion, M1, the standard ProServices flexible grid for this resource category, Leadership Development Consultant. The flexible grid indicates the minimum level of points required to qualify for each level of expertise. To meet criterion M1, the proposed resource was required to obtain a minimum of 100 points to qualify at a senior level as described below:

“4.1.1.2 Mandatory Technical Criteria

M1. The Bidder must demonstrate that the proposed resource meets the mandatory minimum point qualification for a Senior Leadership Development Consultant as per the below Flexible Grid:

Levels of Expertise

Senior: Minimum 100 pts

Intermediate: Minimum 80 pts

Junior: Minimum 65 pts

Relevant Education to the Consultant Category

University (PhD, Graduate, Undergraduate, degree): 35 pts

College or CEGEP Diploma/Certificate: 25 pts

Professional Certification

Relevant Professional Certification: 15 pts

Relevant Experience in Consultant Category

≥1 yrs and < 2 yrs: 12-23 months - 15 pts

≥2 yrs and < 4 yrs: 24-47 months - 20 pts

≥4 yrs and < 6 yrs: 48-71 months - 30 pts

≥6 yrs and < 8 yrs: 72-95 months - 35 pts

≥8 yrs and < 10 yrs: 96-119 months - 55 pts

≥10 yrs: 120 + months - 65 pts”

25. The basis of selection, found in section 4.2 of the RFP, stated:

“A bid must comply with the requirements of the bid solicitation and meet all mandatory technical evaluation criteria to be declared responsive.”

PHAC advised OPO that the following additional words were inadvertently omitted from the basis of selection: “The responsive bid with the lowest evaluated price will be recommended for award of a contract”.

26. At the time of this solicitation was launched, the Treasury Board Contracting Policy (TBCP) was the authoritative policy for government contracting. It contained policy requirements; referenced applicable regulations and policies; as well as the requirements for conducting bid solicitations and awarding contracts.

Section 10.3.1 of the TBCP stated “… assessment and award criteria must be spelled out in the solicitation document”.

In addition, section 10.7.27 of the TBCP addressed how evaluation criteria were to be presented and used when soliciting bids:

“Competing 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. They are to be recorded along with the requirements of the contract and included in the bid solicitation. […] Fairness to all prospective contractors and transparency in the award process are imperative.”

27. In its decision in L. P. Royer Inc. v. Department of Public Works and Government Services, a case for the acquisition of mukluks with facts similar to the facts in this review, the Canadian International Trade Tribunal found that the department applied a criteria from a prior stage of the evaluation during a later stage of the process when such criteria could no longer be applied.

28. The technical evaluation was conducted by 3 PHAC employees, each completing individual evaluations and then completing a consensus evaluation of both proposals. According to the results of the consensus evaluation, the Complainant scored 105 points while the other bidder scored 115 points. Therefore, based on evaluation results, both resources proposed by the bidders met the mandatory minimum number of points to qualify as a Senior Leadership Development Consultant per the flexible grid.

29. For the basis of selection, the ProServices Supply Arrangement dictates the use of Public Services and Procurement Canada (PSPC)’s medium complexity bid solicitation and resulting contract template. This template requires the contracting authority to choose an approved basis of selection clause from PSPC’s SACC manual. The manual recommends the use of SACC clause A0031T—Basis of Selection—Mandatory Technical Requirement for solicitations that only contain mandatory technical evaluation criteria, which states:

“A bid must comply with the requirements of the bid solicitation and meet all mandatory technical evaluation criteria to be declared responsive. The responsive bid with the lowest evaluated price will be recommended for award of a contract.”

30. PHAC acknowledged in its response to OPO it had made an error in the evaluation process and that the evaluation of the proposals was wrongly conducted using the points attributed through the flexible grid to compare the level of qualification of the resource proposed by the two bidders, which resulted in the contract having been awarded to the higher financial proposal. As in the L. P. Royer Inc. v. Department of Public Works and Government Services case noted above, criteria from a prior stage of the evaluation should not be applied during a later stage of the process unless it was made explicitly clear in advance that this would happen.

31. PHAC also acknowledged that, due to an error in the cutting and pasting of the appropriate basis of selection clause from the SACC Manual, only half of the clause had been copied and the second sentence – “ The responsive bid with the lowest evaluated price will be recommended for award of a contract” had been mistakenly omitted.

Finding—Issue 1

32. OPO finds that PHAC improperly evaluated the proposals and awarded the contract to the wrong bidder. PHAC evaluated the proposals using the flexible grid per the RFP, however it awarded the contract based on the number of technical points scored by the respective bidders. This point-based selection method was neither expressed nor implied in the solicitation document. Therefore, PHAC improperly used undisclosed criteria in awarding the contract to the other bidder.

Other observations

33. In the analysis above, OPO did not address the issue of the other bidder sharing its proposal with the Complainant as this error was not caused by PHAC. However, OPO notes that it is the responsibility of bidders to ensure their proposals are sent to the appropriate recipient per RFP instructions, and that cancelling and retendering the requirement would have unfairly penalized the Complainant.

34. OPO notes that having both bidders listed as addressees in the PHAC email containing the RFP might have been a contributing factor in the other bidder sharing its proposal with the Complainant. While it was not PHAC who disclosed the other bidder’s proposal to the Complainant, a good practice going forward would be to ensure e-mail addresses of potential bidders are anonymized, that is using the “bcc:” field, when sending solicitation documents.

Conclusion

35. The Procurement Ombudsman found merit in the issue raised in the complaint, which was further acknowledged by PHAC, namely, that PHAC improperly evaluated the proposals and awarded the contract to the wrong bidder.

36. In its response to OPO, PHAC advised it “undertook a preliminary action plan and:

requested the other vendor not to start the work related to the contract awarded while the file is under review;
reminded the employee in charge of the file of the application of the mandatory peer review of each file before posting the RFP. An email will also be sent to the entire team to emphasize this message and a closer monitoring will be applied in that regard;
will ensure that a refresher on the evaluation of vendor proposals is provided to Procurement Officers;
will adopt a procedure outlining the process to follow when a vendor expresses a disagreement with the evaluation of their proposal; and
will ensure that e-mail addresses for bidders invited to participate in a solicitation process are concealed from others.”

OPO would like to acknowledge PHAC for quickly taking corrective measures in response to the issues raised in this complaint.

Compensation

37. In order to recommend the payment of compensation to the Complainant, subsection 13(2) of the Regulations requires the following:

“If a competitive process was held, the complainant must have submitted a bid in respect of the contract to which the complaint relates, unless it was prevented from doing so because of the actions of the contracting department.”

38. As a competitive process was held and the Complainant submitted a bid, the Ombudsman may recommend payment of compensation in accordance with subsection 13(1) of the Regulations.

Recommendation

39. In accordance with sub-paragraph 13(1)(b) of the Regulations, the Procurement Ombudsman recommends PHAC pay compensation to the Complainant in an amount equal to 10 percent of the value of the contract awarded. The Procurement Ombudsman recommends PHAC pay $630.00.

Date modified:: 2022-08-31

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