Procurement practice review of the Department of National Defence

May 2022

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I. Background

1. The Office of the Procurement Ombudsman (OPO) conducted a review of procurement practices at the Department of National Defence (DND).

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. OPO’s procurement practice reviews are 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:

  1. 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
  2. Solicitation—the design and execution of the solicitation process, including the clarity and completeness of solicitation documents
  3. 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 succeowest-priced, technicallyssful bidder

4. DND 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 other top 20 departments/agencies over a five-year period ending in 2022-23.

5. DND implements government decisions regarding the defence of Canadian interests at home and abroad. The Canadian Armed Forces serve on the sea, on land and in the air, with the Royal Canadian Navy, the Canadian Army, the Royal Canadian Air Force and the Canadian Special Operations Forces Command. At any given time the Government of Canada can call upon them to undertake missions for the protection of Canada and Canadians and to maintain international peace and stability, supported by the civilian employees of DND.

6. Public Services and Procurement Canada (PSPC), Shared Services Canada (SSC) and Defence Construction Canada (DCC) implement and manage DND procurements for specifically mandated commodities as well as procurements valued outside of DND’s delegated authorities. DND implements and manages only those procurement activities within their own authorities. High risk contracts and specific centrally-procured commodities are implemented and managed by procurement practitioners who fall under the Material group within DND, mostly located in the National Capital Region. Low to medium risk contracts, depending on dollar value and commodity, are also contracted for across Canada in multiple offices.

7. According to information provided by DND, it awarded more than 291,000 contracts, valued at 2.1 billion dollars, during OPO’s review period of April 1, 2019, to March 31, 2021.

II. Objective and scope

8. This review was undertaken to determine whether DND’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 DND’s procurement practices were consistent with Canada’s obligations under sections of applicable 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:

10. This report also includes a section on other observations identified by OPO through the analysis of the above LOEs.

11. This review consisted of an assessment of procurement files for DND-awarded contracts between April 1, 2019, and March 31, 2021. This review did not include construction contracts, non-competitive contracts, acquisition card activity, contracts awarded through PSPC, SSC or DCC, standing offers or procurement activity for which DND was not the contracting authority.

12. Based on contracting data provided by DND, 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.

13. In 4 instances, OPO could not conduct its review. In 2 of the 40 files contracts were awarded by either SSC or PSPC on behalf of DND, and therefore fell outside of the scope of OPO’s review. For 2 additional files, DND could not locate documents pertaining to how the contract was awarded, that is the file was missing most of the information related to the solicitation documents, proposals and evaluations. All 4 files are described in more detail in Annex I of this report.

14. The remaining 36 files selected for review included 9 requests for proposals (RFPs), 9 invitations to tender, 6 requests for quotation (RFQ), and 12 using PSPC supply arrangements.

III. Results

15. DND’s procurement practices pertaining to evaluation criteria and selection plans, the solicitation process and its documentation, and the evaluation of bids and contract award were assessed against the 3 LOEs noted above. OPO made 6 recommendations to address the issues identified in the review, which are summarized in Annex II of this report. The recommendations are based on the analysis of information and documentation provided to OPO by DND during the course of the review.

16. In instances throughout the report, multiple observations have been made regarding a single file. As a result, the number of observations may not always correspond to the number of files cited.

Lines of Enquiry 1: Determine whether evaluation criteria and selection plans were established in accordance with applicable laws, regulations and policies

17. 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.

18. This LOE applied to 30 files where evaluation criteria were developed and included in solicitation documentation. It did not apply to 6 files for which the basis of selection was price alone. Of the files for which this did apply, 20 contained only mandatory criteria, 1 file contained only point-rated criteria and 9 files contained both mandatory and point-rated evaluation criteria. All files were examined to determine if the evaluation criteria and selection methodologies: were aligned with the requirement; were not overly restrictive; and were clearly communicated in the solicitation. The method of allocating points to rated criteria was also assessed to determine if it reflected the relative importance of the criteria.

Mandatory criteria

Two-thirds of the applicable files did not contain clearly-stated, demonstrable and measurable mandatory evaluation criteria; they could also be restrictive or unnecessarily favour a bidder or group of bidders.

19. Mandatory evaluation criteria must be met or the bid must be disqualified. In 10 of the 29 files containing mandatory evaluation criteria, DND’s criteria were clearly stated, demonstrable and measurable, aligned with the requirement, not overly restrictive and did not unnecessarily favour or penalize any particular bidder or group of bidders. However, in 16 of the files, the mandatory criteria were not communicated in a clear, precise or measurable manner and in 3 of the files the criteria appeared to favour a bidder. There were also 3 files which had at least 1 criterion which did not align with the Statement of Work’s (SOW) requirements. Details from OPO’s review of mandatory criteria are presented below.

Unclear or Unmeasurable Mandatory Criteria

20. Unclear mandatory criteria 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 DND’s effectiveness in assessing a supplier’s ability to meet an essential element of the work to be performed and reduces DND’s ability to substantiate the disqualification of a bid for not meeting these vague criteria.

21. Examples of unclear or unmeasurable mandatory criteria included the following:

  1. In 8 files, the mandatory criteria required a proposed resource to have a certain level of experience or a particular skillset without defining how the proposed resource could meet the criterion. Sometimes, bidders were asked to “clearly demonstrate” something, or to have “knowledge of” or “skills in” certain fields, or to “possess practical working knowledge” of something. As an example, in a requirement for learning services, bidders had to demonstrate their proposed resource had “specialized knowledge” in six categories, ranging from “Aircraft Navigation and regulations” to “Liaising with internal/external agencies to communicate air activities”. The RFP stated “[t]his specialized knowledge must be gained through a combination of education, training, and experience” without defining what that combination might be. The acceptable mix of education, training, and experience to pass this requirement should be specified. Without specific criteria, it is difficult for DND to explain to an unsuccessful bidder how its bid did not “clearly demonstrate” a requirement or that a proposed resource’s “knowledge of” something did not meet the criteria.
  2. In 4 files, the solicitation documents required bidders to submit documentation, but there was no evidence provided that the content of the documentation was assessed. In these 4 files, bidders were required to submit a resume, or a schedule to complete the work, or explain how they would meet the technical requirement, without DND providing bidders the parameters for passing the requirement. Bidders have to be told what is to be included in the resume, or the target completion date or the details necessary to show their comprehension of the work to be performed. Without providing such details, DND would not be able to disqualify a bid with, for example, a 1-paragraph resume to demonstrate 8 years of experience, or a bid which lists a 3-year schedule for a 6-month task, or a bid’s work-plan that simply states “We’ll sub-contract the work out”.
  3. In 5 files, the mandatory criteria did not explain how the requirements could be met. In one example, bidders had to demonstrate their proposed resource had 8 years experience in “… planned and corrective maintenance on Canadian Forces Diving and Hyperbaric equipment”. In response to an OPO query regarding this criterion, DND advised OPO “…[t]he only Canadian Armed Forces (CAF) hyperbaric facilities are located at Fleet Diving Unit (Atlantic), Fleet Diving Unit (Pacific) and Experimental Diving and Undersea Group in Toronto. Only those three locations would have been valid locations to use as work experience”. This information should have been part of the criterion to clearly explain to potential bidders what experience was required.
  4. In 3 files, a mandatory criterion could not be assessed. These involved the bidder stating something in its bid which could only be assessed based on an event occurring in the future. In 1 example for linguist and interpreting services in Jordan, 2 mandatory requirements were that the linguists were “[a]vailable twenty-four (24) hours a day, seven (7) days a week while in the field” and “[a]vailable nine (9) hours a day, five (5) days a week while in garrison”. Even if these criteria had been properly couched in terms of requiring the supplier to certify its resource(s) would be available as required, that statement cannot be verified before the contract is awarded. In another example, bidders had to meet the requirement that their proposed resources “[h]ave an English proficiency in reading, writing and oral abilities sufficient to achieve level C, if tested by the Public Service Commission”. In both cases, there is no way for the supplier to be able to prove its bid actually met the requirement until after contract award—that is, when the linguists show up (or not) for work or if the resource is somehow tested by the Public Service Commission. In short, for a supplier to win the contract it has to prove it can do “X”, but it can only do “X” if it gets the contract.
Restrictive Mandatory Criteria

22. Overly restrictive evaluation criteria undermine the fairness and openness of the bid solicitation process by restricting the number of suppliers capable of submitting a compliant proposal. It limits DND’s ability to obtain competitively-priced alternatives capable of meeting the favoured service/good capabilities.

23. There were 2 files for which the mandatory criteria were unnecessarily restrictive or appeared to unnecessarily favour a bidder or group of bidders:

  1. In 1 file, the mandatory criteria required the proposed resource have experience which would only be found in someone who previously worked for DND as a contractor or former employee/member. These types of restrictive criteria may limit competition and may create real or perceived instances of favouritism. In the above-noted example where only experience from 3 specific CAF hyperbaric facilities would have counted, the proposed resource also required “…a military QL5B Clearance Diver Technician qualification (Military Occupation Code 00342)”. According to the winning bid, its proposed resource had been doing the job since 2006.
  2. In a second file, for the Royal Military College’s Convocation, Sunset Ceremony and Commissioning Parade, the list of required audio/visual equipment contained 34 specifically identified items, often including the make and model number, for example, 2x Shure glxd w185 lav microphones, without allowing for any type of equivalent equipment that would also meet the requirement.

24. In the above examples, even though they were both competitive procurement processes, there was little opportunity for competition. Suppliers that are aware of any advantage they possess have the ability to leverage it in terms of charging DND higher prices, knowing there is limited competition.

Point-rated criteria

In 6 of the 10 files that contained point-rated criteria, the rating factors did not appear to reflect the relative importance of the rated criteria, may not have been appropriate to the requirements, were not communicated clearly or could be restrictive.

25. There were 10 files which contained point-rated evaluation criteria. Such criteria award points on a scale, with more points being awarded for, for example having a faster vehicle, or a higher level of education, or more experience. In 4 files, the point-rated criteria and rating scales were appropriate to the requirement, clearly communicated and not overly restrictive. In 6 files, however, solicitations contained unclear criteria, criteria unrelated to the requirement or criteria which favoured certain bidders. Details from OPO’s review of point rated criteria are presented below.

26. In 3 files, the rating scale was unclear, which could lead to confusion by bidders in how to address those criteria, and by evaluators in how to assess the criteria. An example of this was found in a file for an analyst to assist DND with its Access to Information requirements. One of the rated evaluation criteria awarded up to 20 points for having “ …a minimum of ten (10) years of ATIP experience working specifically using Sections 13, 15, 16, 19, 20, 21, 23 and 69 under the ATIA or Sections 19, 21, 22, 26 and 27 of the Privacy Act”. There is nothing explaining how those 20 points were to be awarded, for example: is it 2 points per year of experience over 10 years? 10 points per piece of legislation? Or is it 20 points—all or nothing—for meeting every aspect of the criterion? Without a clear explanation of how the 20 points would be allocated, potential suppliers cannot know which resource to propose for maximum points and evaluators would not know how to award the points.

27. There were also 2 files which awarded points for having DND/CAF experience and, therefore, gave such bidders an advantage over other suppliers. This type of restrictive criteria may limit competition and may create real or perceived instances of favouritism. In 1 file DND required 3 resources to develop, evaluate and revise courseware for air-operations-related courses. Only 12 of the 90 rated points were awarded for having any experience in developing courseware, the remaining 78 out of 90 rated points were awarded for having certain experiences working at/with DND. In another file, for the operations and maintenance services of an Air Force IT Portal, 6 of the 15 rated criteria awarded points for the proposed resources’ experience with specifically-identified DND systems, for example the Air Force Training Information Management System, the Air Force’s “Human Resources Management System” and the Military Individual Training and Education database. This contract was awarded to a company whose resource claimed to have been involved in the creation of the IT portal in question and who had been providing support services since 2011. This reliance on previous experience creates a significant incumbent advantage that may be impossible to overcome. Bidders only able to meet the raw technical requirements—creating courseware or being able to work with an IT Portal—will be excluded. By limiting the number of bidders who can bid, DND is not receiving the benefits of an open, fully-competitive process, including, possibly, a better price.

28. In 3 further files, the scoring grid did not appear to reflect the relative importance of the criteria. In 1 file, the requirement was for 7 resources in IM/IT enterprise cyber security programs. For all 7 resources, 2 points were awarded for the proposed resource for having “…a graduate level degree from a recognized university in any field”. For 4 of those resources there were only 9 rated points available, meaning 22 percent of the available points, that is, 2 out of 9 points, could have been awarded for having education completely unrelated to IT or cyber security. In another file, 25 of the available 60 rated points were awarded for “…experience developing and delivering organizational change training material to groups of employees” but only 1 of the SOW’s 11 deliverables were related to training. In fact, the word “training” only appeared in the SOW 3 times, twice in relation to that evaluation criterion and once as a deliverable, with none of the SOW’s work related to developing training materials.

Selection methodology

In the majority of files reviewed, the selection methodology clearly communicated the manner in which the contract would be awarded and aligned with the requirements.

29. OPO’s review of selection methodologies applied to all 36 files. In 29 of the 36 files, the selection methodology was aligned with the requirements as described in the solicitation document. Additionally, in all 36 files, DND used common selection methodologies such as lowest-priced responsive bid (with or without technical evaluation criteria) or highest combined rating of technical merit and price, to select the successful supplier.

Unexplained Selection Methodology

30. Solicitation documents must state the award methodology. In 3 files, DND did not do so. In one of these files, there were two bids, one of which quoted a price for all 23 items being sought, and one of which only quoted prices for 11 items. Each of the prices for these 11 items was marginally less expensive, but DND still awarded the contract for all 23 items to a single bidder instead of awarding 2 part-contracts—the 11 items to the lower-priced bidder and the remaining 12 items to the other bidder. There was nothing in the solicitation about having to bid on all items to be considered for contract award.

Improperly Explained Selection Methodology

31. When a contract was to be awarded based on some combination of technical merit and price, there were 2 instances where the solicitation did not explain how the evaluated price was to be determined. In 1 file, the solicitation stated the points would be allocated 50/50 between the technical and financial aspects of the bid but, on the same page, it also stated points would be awarded on a different basis: 70 percent of the points for the technical proposal and only 30 for the financial. In the other file, the RFP stated the contract would be awarded on the basis of lowest evaluated price, but the RFP did not explain how the points would be determined. For the first of these examples, there was only a single bidder. In the second, DND awarded the contract to the supplier with the lowest total price.

32. In the 2 other files, there were issues with how DND advised bidders how the contract would be awarded:

  1. In one file, the “Selection Methodology” section of the solicitation, instead of explaining how the contract was to be awarded, that is, lowest-priced, technically compliant, DND referenced clause C0008T in PSPC’s Standard Acquisition Clauses and Conditions library, which is not a basis-of-selection clause but rather a clause requiring suppliers to support their prices. This incorrect reference makes it difficult for suppliers to structure their bids—for example, while being able to support their prices, they might choose a more expensive service-level, or a more robust product, expecting DND to award the contract for the highest-rated technical proposal. It was ultimately awarded to the lowest priced of 3 bidders.
  2. In the other file, OPO observed that DND tried to amend a standard clause, but the change resulted in the disqualification of all but one bidder. The RFP’s Selection Methodology read: (emphasis by OPO)
    • 4.2.1 Lowest Cost Per Point
      • 1. To be declared responsive, a bid must:
        • comply with all the requirements of the bid solicitation;
        • meet all mandatory technical evaluation criteria; and
        • obtain the highest points overall for the technical evaluation criteria which are subject to point rating.
      • 2. Bids not meeting (a) or (b) or (c) above will be declared non-responsive. Neither the responsive bid that receives the highest number of points nor the one that proposed the lowest price will necessarily be accepted.

      • 3. The evaluated price per point of a responsive bid will be determined by dividing its evaluated price by the overall score it obtained for all the point rated technical criteria detailed in Attachment 1 to Part 4.

According to section 4.2.1.1.c and 4.2.1.2, only the bid which obtains the most technical points can be considered “responsive”. With all other bids being declared non-responsive, price plays no role in determining which company will be awarded the contract, as only one bid could be responsive. This scenario may prevent potential bidders from proposing a lower-daily rate resource to compete with a higher-priced, but technically stronger, resource who would expect to receive close to full points in the rated evaluation points. This may deprive DND of being able to award the contract to a lower priced, but technically acceptable, bid.

Recommendation 1

DND should update its procurement policies and training to ensure they direct that:

  • Mandatory criteria are: properly defined; measurable; not based on future compliance or unnecessarily restrictive; and bidders are informed of how the criteria can be met
  • Rated criteria: include clear rating scales; align with the statement of work requirements; and not be unnecessarily restrictive
  • The Selection Methodology should be clearly explained and included in every solicitation.

Lines of Enquiry 2: Determine whether solicitation documents and organizational practices during the bid solicitation period were consistent with applicable laws, regulations and policies

33. 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.

34. Solicitation documents must contain work descriptions or specifications defined in terms of clear outputs or performance requirements. DND’s Procurement Administration Manual (PAM) makes reference to PSPC’s Supply Manual and requires solicitation documents to 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 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.

35. This LOE applied to all 36 files. Solicitation documents (excluding evaluation criteria and selection plans which were assessed under LOE 1 above) were reviewed 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.

Solicitation documents

In more than two-thirds of the 36 files, solicitation documents included clear and complete information and instructions to permit the submission of compliant bids.

36. In 25 files, the solicitation documents included clear, complete information and instructions for submitting compliant bids. However, there were 11 files for which suppliers were not provided with a clear description of requirements or the solicitation documents contained inappropriate or incomplete instructions. OPO’s findings are found below.

Communication with suppliers

In a majority of files reviewed, there was evidence communication with suppliers during the solicitation period was appropriate.

37. In 4 files, however, communications on file indicate not all suppliers were provided with the same information at the same time.

38. Section 2 of the TBCP states: “Government contracting shall be conducted in a manner that will: (a) 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 of the TBCP also states: “Procurement files shall be established and structured to facilitate management oversight with a complete audit trail that contains contracting details related to relevant communications and decisions…”

39. These requirements apply to all aspects of the procurement process, including interactions with suppliers. For procurements subject to the Canadian Free Trade Agreement and the World Trade Organization—Agreement on Government Procurement, section 12.3.2 of the TBCP requires contracting authorities 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. Details of OPO’s review are presented below.

Unequal Access to Necessary Information

40. In these 4 files, not all bidders had access to the same information at the same time:

  1. In 2 files, this disparate knowledge appears to have come from some sort of exchange between DND and the winning supplier occurring prior to the solicitation process:
    1. In 1 file, DND had received a quote from a supplier which exceeded the threshold under which DND does not have to solicit bids. DND then initiated a new solicitation process which it sent to that supplier and two others. That supplier was the only bidder, and its bid stated “…as per our conversation with [the contracting or technical authority]footnote 1…”
    2. In the second file, DND stated the 6-month contract period identified in the solicitation“… was an estimate based on the availability of the forklift and the delivery time …” indicating DND likely had already spoken with that supplier to determine the equipment’s availability.

    In these 2 cases, DND did not conduct a fair, open or transparent solicitation process. In each case, the solicitation process was tainted by the pre-solicitation contact between DND and the eventual contract awardee. Under certain circumstances, departments are allowed to award a contract without soliciting bids, however none of these exceptions were noted on the files and so DND should have conducted these 2 solicitations in a fair, competitive manner.

  2. In 2 other files the solicitation documents either contained different information, or it appeared a supplier was providing information to DND about the items DND was buying:
    1. In 1 file for senior consulting services, the winning bidder was provided with less flexible parameters about which certifications were acceptable than the other two invited suppliers, but it was still able to meet the more restrictive requirement and be awarded the contract. The winning bidder was also the only one told the due date for the receipt of bids.
    2. In another file, for submarine parts, during the solicitation period, DND was exchanging e-mails with one supplier in which the two were verifying the part numbers and descriptions for some of the items DND was attempting to procure. This resulted in DND changing the required parts midway through the solicitation. DND did share this information with all other potential suppliers via an amendment. This bidder was ultimately awarded the contract.
Administrative Shortcomings

41. Regarding the general administration of the solicitation process, there were instances where DND did not follow the necessary TBCP rules:

  1. In 2 files DND did not invite the appropriate number of potential bidders: In one file, DND used a PSPC-established method of supply, the Professional Audit Support Services supply arrangement, which requires departments to invite 15 suppliers to bid; However, according to its records, DND only sent the solicitation to 10 suppliers. The file did not contain the search results from PSPC’s e-portal for the supply arrangement, which might have explained why only those 10 companies were selected. In the second file, the value of the awarded contract ($40,898.54) was over the monetary threshold for goods contracts for both the Canada Free Trade Agreement ($25,300) and the North American Free Trade Agreement ($32,900), among others, which means DND should have used an “open” RFP instead of sending an RFQ solicitation directly to 3 suppliers. The file should have contained an estimate for the anticipated value of the contract. Such estimates, normally signed off and approved by the relevant DND authority, should be used to determine if the trade agreements apply. This was the file (noted in paragraph 30 above) for which DND awarded a single contract to the bidder who provided prices for all 23 items, instead of considering the bid with the 11 lower-priced items.
  2. In 3 cases, the solicitation documents did not inform bidders when the bids were due or to whom they should ask questions if any arose during the solicitation period.
  3. In 3 cases, the length of time bidders had to prepare their proposals, that is bid closing date, was either not in accordance with the rules of the particular method of supply or was shorter than would be considered normal—as an example, in 1 case, bids were due less than 2 days after the solicitation was sent out; that contract was awarded over 100 days later.

42. Anything which potentially affects the proper awarding of a contract exposes the department to challenges at any number of bid-review fora—OPO included. Depending on the body to which a complaint may be submitted, there could be delays in the award of the contract or result in DND paying compensation to suppliers.

“Regret” Letters

43. DND’s PAM states “Post contract award, the [contracting authority] must send a Regret Letter to each unsuccessful bidder”. This letter advises unsuccessful bidders: to whom the contract will be awarded, the value of the contract, and it should also offer an explanation of why their bid was not selected. In 4 files, there were multiple bidders but no “regret” letter was on file. Regret letters are an important tool as they alert bidders to the fact that they were unsuccessful in the selection process, should they wish to seek a detailed debriefing from the contracting department or avail themselves of potential recourse mechanisms such as OPO or the Canadian International Trade Tribunal (CITT).

Recommendation 2

DND should update its procurement policies and training to ensure its bid solicitation processes:

  • Do not result in some suppliers being given an advantage over competitors through the uneven sharing of information
  • Invite the right number of suppliers and provide all bidders with contact information and the due date for the receipt of bids
  • Include measures to ensure the requirement to send regret letters is consistently implemented.

Lines of Enquiry 3: Determine whether the evaluation of bids and contract award were conducted in accordance with the solicitation

44. In order to ensure the fairness 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 of ambiguities in the selection process and may 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. Inconsistent evaluations may also call into question the integrity of the procurement process.

45. Of the 36 competitive solicitation processes reviewed, 30 included a technical evaluation leading to contract award and 6 were awarded on the basis of price alone. The 30 files that included a technical evaluation were examined to determine whether a process had been established to ensure the consistent evaluation of bids and that the evaluation of bids had been carried out in accordance with the planned approach. All 36 files were examined to determine if they were adequately documented.

Bid evaluation

In two-thirds of files for which there was a technical evaluation, inconsistencies in the evaluation of bids and deviations from the planned approach were noted and, in several instances, contracts were incorrectly awarded.

46. In 10 instances, the files were missing complete records about either the individual or consensus evaluations. For the files for which there were complete evaluation results, 10 showed inconsistencies in the evaluation of bids or deviations from the planned approach.

Missing Evaluation Guidelines

47. Prior to the evaluation of the technical component of bids, contracting authorities provide technical evaluators with Evaluation Guidelines explaining how the evaluation process is to proceed. These instructions can be provided orally or in-person. However, forms to be signed are often provided which 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

48. These types of forms would not be needed if a department was purchasing simply-described, well-understood goods or for contracts with few evaluation criteria and being awarded to the lowest priced bid, which was the case for 6 of the 36 files provided by DND. However, they could be included for every solicitation if the department/contracting authority wanted to ensure no evaluators could compromise the evaluation process. Of the remaining 30 files which had more complicated evaluation processes, 12 had these forms, signed, and 1 other had the form on file but it was not signed.

49. At DND, there were inconsistencies between contracting authorities about the applicability of such forms. Regarding a query OPO had concerning this subject on 1 file, the DND contracting authority informed OPO the Conflict of Interest/Non-disclosure (COI/ND) forms were not required because all the evaluators were either public servants or Canadian Forces members. But in another file, the COI/ND forms on file state “This Form is for DND Employees” at the top. DND’s PAM supports the former view—only consultants, that is, non DND employees or Canadian Forces members, are required to sign such a form. Otherwise, the PAM states the contracting authority is to “instruct” the technical evaluators about maintaining the confidentiality of the bids, without mentioning COI.

50. The PAM also references DND’s Defence Administrative Order and Directive 7021, which deals with COI and Post-Employment issues for DND employees and CF members, but without a direct mention of conducting bid evaluations.

Recommendation 3

DND should update its procurement policies and training to require all evaluators, regardless of employment status, to assess and confirm they are not in a conflict of interest position prior to obtaining bid documentation and/or participating in the evaluation process.

Missing Evaluation Results

51. DND was unable to provide individual evaluation forms in 9 files, and in 6 of those files, the consensus evaluation results were also missing. In 3 of those 6 files, DND stated there were no evaluation results on file because there had only been a single bid. There were also 3 files where the consensus evaluation merely stated “Met”, “Compliant” or “Y” for each criterion. Without any additional support, for example a reference to where in the bid the criterion was met, OPO cannot verify if DND properly evaluated the bids or if the contract was correctly awarded in any of these cases.

Bid evaluation and improper contract award

52. There were also 2 files in which a bid was disqualified on the basis of requirements not found in the solicitation—one supplier was disqualified, in part, for not having previous DND experience and, in another file, a bid was disqualified for not including drawings from the original equipment manufacturer for a specific part. Neither of these requirements were identified in the respective solicitations. In the first instance, the bid was disqualified for not meeting a number of mandatory criteria, so the noted error was not the sole reason the bidder was not awarded the contract. In the second file, it was the lowest-priced bidder which was improperly disqualified.

53. In 9 files, the contract was awarded to a supplier whose bid was either expired, not evaluated properly or should not have been considered valid given the supplier had added extra terms and conditions to its bid:

  1. In 1 file for the conversion of 6 Leopard tanks into monuments, such as those found in front of a Canadian Forces Base, the contract was signed 187 days after the bid closing date. The initial bid validity period was for 90 days which was extended by another 90 days for 2 of the 3 bidders, but not the ultimate winning bidder. All 3 bids had expired by the time the contract was awarded.
  2. In 4 files, the supplier had either rejected some of the solicitation’s standard terms and conditions or added its own terms and conditions or, in 1 case, included the requirement for DND personnel to do some work which was supposed to be done by the supplier. By allowing bidders to make such changes, DND is no longer able to fairly compare the bids with the solicitation-defined requirements. This results in an uneven playing field, as some bidders constructed their bids based on the contents of the RFP, whereas others defined a new set of rules to submit their bids. DND is not being fair to those who adhere to the terms of the RFP to construct their bids.
  3. In 4 other files:
    1. In 2 files, the contract was awarded to non-compliant bidders—in 1 file a mandatory signature was missing and, in another, a proposed resource did not have the required degree/diploma;
    2. As noted in paragraph 30 above, in 1 file a lower-priced bid was not selected because it did not provide prices for all items being requested, even though the solicitation did not state bidders must bid on all items to be considered for contract award; and
    3. In the final file for the purchase of technical writing services, responses to rated criteria should have been awarded either “0” or “5” points depending on if you had attended the listed course or not—in multiple cases, DND awarded 1, 2, 3 or 4 points for these criteria. This was the file noted in paragraph 31 above where DND did not identify how the points would be determined to identify the lowest-evaluated price, thus it is unclear if this error potentially affected the award of the contract.

54. There was also 1 file, a contract for up to 4 electric warehouse tractors, which was awarded under the auspices of a supply arrangement, under which pre-qualified suppliers certified, when they did propose a particular piece of equipment, “… all vehicles/equipment proposed conform, and will continue to conform throughout the duration of the contract, to all technical specifications of Annex A, Requirement. This certification does not relieve the bid from meeting all mandatory technical evaluation criteria detailed in Part 4.” DND had included over 50 “must” statements regarding the vehicles capabilities, but the technical authority had only assessed 6 of them. To be acting in accordance with Canada’s obligations under the trade agreements, which did apply to this solicitation, the contract must be awarded as per the “Basis of Selection” outlined in the RFP which, in this file, stated “…[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 contract award”.

55. Overall, by not conducting the evaluation in the manner prescribed by the solicitation or, by not being able to demonstrate evaluations were conducted in accordance with the terms of the solicitation, DND cannot defend and explain its decisions and actions to other bidders or review agencies. DND is therefore unable to demonstrate the contract awards were made in accordance with, and not in breach of, applicable laws, regulations, and policies.

Recommendation 4

DND should update its procurement policies and training to emphasize:

  • Technical evaluators must strictly follow the solicitation’s evaluation plan and award contracts only to compliant bidders
  • Any compliance failure regarding a mandatory criterion results in the immediate disqualification of the bid
  • Evaluation results must be documented to fully explain how evaluators awarded points for rated evaluation criteria and determined compliance/non-compliance for mandatory evaluation criteria.

IV. Other observations

Contract award or amendments changed the requirement

56. In 5 files, the content of the contract and subsequent amendments did not reflect what was found in the solicitation document or original contract, thus depriving other suppliers of an opportunity to be awarded a contract for the expanded work:

  1. In 2 files, 1 for hotel accommodations in Toronto for DND personnel providing support to long-term care facilities during the COVID-19 pandemic, and the other for linguist and interpreting services in Jordan, there were extensions and associated financial increases to the contracts which were not contemplated by the initial contract, but which were impacted by COVID-19 considerations. However, the lack of documentation on file means OPO was unable to confirm if the appropriate authorities were sought to extend these 2 contracts.
  2. In 2 other files, contract amendments were issued which changed the amount of work beyond what was considered by the solicitation. In one file, noted above, a ~$730,000 contract was for the bidder to convert 6 Leopard Armoured Vehicles into monuments. This was increased to 10 vehicles, at an additional cost of ~$250,000, after contract award. The other file was for learning services and the contract specifically stated “…As the Contractor will only be invoicing us for work done we will not be increasing the value of the contract, we will only be amending the end date if required”. The ~$275,000 contract was amended to ~$535,000. In both cases, if, during the solicitation period, all suppliers had been aware of how much more work was available, they may have structured their bids differently.
  3. There was also the forklift file noted in paragraph 40 above, where DND appeared to base its solicitation on the availability of a specific company’s vehicle. The solicitation required suppliers provide the vehicle for 6 months, but the initial contract was only for 5 months. There is a chance another supplier could have bid had the shorter time period been identified. The contract was eventually amended to add the 6th month.

Recommendation 5

DND should update its procurement policies and training to ensure all solicitations include the entire requirement as known at the time of publication of the solicitation, and that unexpected amendments are minimized, taking into account DND’s operational requirements.

Procurement documentation

57. 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.

58. DND advised OPO that, during the period of time from which OPO chose its review sample, from between April 1, 2019 to March 31, 2021, DND’s contracting work was conducted largely with paper files. When OPO made its July 2021 request for those files, DND’s COVID health and safety protocols impeded access to those local workspaces to locate the requested documentation. This led to difficulties and delays in obtaining the necessary documentation.

59. OPO’s initial request for DND’s 40 procurement files was made from a listing provided by DND in July 2021 and, in 19 cases, the files had to be exchanged, occasionally multiple times, because the selected files did not fit within the review’s scope. After multiple requests for replacement files, OPO requested final documentation to be provided by October 15, 2021. Notwithstanding the circumstances mentioned in the above paragraph, it was only in early-December when OPO and DND finalized the documentation available for review for each file. Given the legislative requirement to provide its recommendations within one year of the commencement of the review, the delays in obtaining files reduced the time available for OPO to conduct its review.

60. File documentation was reviewed to determine whether a complete audit trail was retained to support consistent and transparent decision-making. Incomplete procurement files result 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 evaluation criteria have been applied equally to all competing bids, and demonstrating that the procurement has been carried out in a manner consistent with DND’s obligations under the TBCP and applicable trade agreements.

61. DND’s record keeping practices significantly hindered OPO’s ability to complete this review. The contract listing provided to OPO was generated by a manual-entry system, DND’s Contract Data Management System (CDMS). Because DND did not screen out all non-applicable files almost half of the 40 files initially requested for review had to be replaced when it was discovered the selected file did not fit within the scope of OPO’s review, for example, the requested contract had been awarded by PSPC/ SSC/ DCC, or was a call-up on a PSPC/SSC standing offer. Overall, OPO had to make 7 requests to swap out 26 files.

62. To obtain a broader cross section of DND contracting activities, OPO reviewed files from different areas within DND. CDMS delineates between DND’s different operational sectors, for example, Navy, Air Force, Assistant Deputy Minister (ADM) (Materiel). To try to verify some of the contracting data provided by DND, OPO compared the CDMS-listed contracts with Canada’s government electronic tendering service - buyandsell.gc.ca - and Proactive Disclosure - search.open.canada.ca/en/ct/ - as these sites can provide additional details not available from CDMS. For one operational sector, there were 93 contracts listed in CDMS of which only 19 were published under Proactive Disclosure, which is meant to inform Canadians about federal contracts valued over $10,000. According to DND, the remaining 74 files were withheld from Proactive Disclosure due to security reasons.

63. OPO observed further issues regarding DND’s manner of tracking contract files, which OPO observed was done by linking the contract to the person who was responsible for the file when it was awarded. Requests for files from 2019 were directed to individuals who have switched jobs or been posted or deployed to different organizations. These people were no longer responsible for the files being requested and the DND staff tasked with locating the documentation on behalf of OPO were tested to find the current file owner in a timely manner. As an example, OPO requested the 40 files on July 21, 2021. It took more than 5 weeks for DND, on August 27, 2021, to advise OPO that 13 of them were out-of-scope.

64. The 2 out-of-scope samples noted in paragraph 13 above were requested on September 17, 2021, but it wasn’t until almost a month later, on October 12 and 13, 2021, that DND advised OPO they were not in scope. As explained in Annex I, these 2 samples had been swapped out on multiple occasions. Although there were also 2 files for which DND was unable to provide the solicitation documents, OPO appreciates the efforts DND made to obtain the requested files and documents. According to DND, personnel were specifically sent into closed or unoccupied DND facilities to obtain files for OPO’s review.

65. To exacerbate the situation, for certain files DND was unable to locate necessary documentation because the person responsible for the file was either on parental leave or had left the Department and, thus, DND stated it was unable to access their e-mail folders, where DND claims the missing documents would be located.

66. Regarding the 38 files for which DND was the contracting authority, the initially-provided procurement file documentation was incomplete in 31 of the files. On November 15, 2021, OPO provided DND with its preliminary observations and provided a listing of documentation OPO had expected to find on the files but had not been provided. DND was given 15 days to comment on the observations and provide any missing documents. DND responded to most of the observations and provided over 300 new documents, 180 of which were relevant to the LOEs under review. In some files, these documents were provided more than 4 months after the initial request for the file. It is unclear why DND was only able to find all these documents at this late stage instead of when they were originally requested.

67. OPO considers the transparency of DND’s contracting activities to have been compromised by the quality of the data within CDMS and the lack of visibility over whomever is responsible for managing its contract files. Based on the files provided to OPO for the purposes of this review, DND is not meeting its obligations under section 12.3.1 of the TBCP. It is mis-reporting its contracting activities to the Canadian public, and is also limiting its ability to track and manage its own contracting activities.

68. Given the complexities uncovered in locating the requested files and file owners, DND’s ability to control the information around its procurement activities would be considerably simpler if there was a department-wide system tracking that information. It would aid DND personnel in better understanding and reporting DND’s contracting activities.

Recommendation 6

DND should ensure the established electronic system accurately tracks, controls and reports on its contracting activities and ensures all contracts that are required to be proactively disclosed are.

V. Simplification

69. OPO regularly hears from both Canadian businesses and federal officials who believe the contracting process is unnecessarily complex. In reviewing DND’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.

70. DND generally uses federal government “standard” solicitation documents and processes. This contributes to simplification by improving consistency and uniformity across procurement processes, a formidable task, given the breadth of personnel awarding contracts at DND. However, this breadth can cause some conflicts, for example, when COI/ND forms should be used. Care must 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.

71. As noted in paragraph 21, DND required bidders to submit a resume, or a schedule to complete work, or explain how they would meet the technical requirement, without assessing the content of those documents. This calls into question the value of those mandatory criteria. OPO observed that those criteria/documents are not, therefore, essential to the completion of the work. The administrative burden of complying with the criterion would be more justifiable if the required explanation of how the work was to be conducted, or if the required schedule, were assessed to confirm they met DND’s requirements. In such circumstances, the mandatory requirement should either be tailored to the amount of experience or expertise that is essential to perform the work or that requirement should be removed.

72. With the TBCP being replaced by the Directive on the Management of Procurement on May 13, 2022, DND has the opportunity to ensure its PAM, and other procurement documents and training, are aligned with the new Directive.

VI. Conclusion

73. DND’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.

74. Regarding LOE 1, for the 36 files for which there was adequate documentation to review the entire file, OPO found that only 12 files had evaluation criteria and selection plans that met requirements set out in applicable laws, regulations and policies. For the most part, mandatory and point-rated criteria were clearly identified in the solicitation, however a properly-explained selection methodology was missing in 7 files.

75. There were numerous issues regarding unclear evaluation criteria, where mandatory or rated criteria had vague or poorly defined descriptors in 18 of 30 applicable filesfootnote 2 or the criteria did not match the requirement in 5 files. There were also 5 files where the evaluation criteria appeared to favour a bidder. Vague criteria can lead to non-compliant 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.

76. Regarding LOE 2, OPO found that 24 of the 36 applicable files included clear and complete information and instructions for submitting compliant bids, and were consistent with applicable rules. In these files, solicitations were made available to the appropriate number of suppliers for the correct length of time. Ensuring proper solicitation documentation and communication with suppliers allows for more transparent and efficient solicitation processes.

77. However, in 10 files, shortcomings were noted in the way DND conducted the solicitation processes. These were administrative in nature, as in 4 files where the bidding period was shortened, or in 2 files, DND did not invite the correct number of bidders. There were also 3 files where the solicitation documents did not include a bid closing date or the departmental contact to whom questions should be addressed. More concerning, however, were the files where DND did not treat suppliers equally, for example most especially the 2 files where DND had been in contact with one of the invited bidders before the solicitation was issued. Any time a department acts in a way that negatively affects the proper awarding of a contract, it exposes the department to legal and financial risk.

78. Regarding LOE 3, OPO found in two-thirds of the files DND either did not, or did not have documentation on file to prove, that it properly evaluated the bids. This brought into question the award of 20 contracts. In 10 files, DND either had no evaluation results on file or the evaluation did not explain how the bidder met the various evaluation criteria. There were also 9 files which showed inconsistencies in the evaluation of the bids, including 2 where DND staff either missed or ignored what could have been a disqualifying flaw. Being unable to demonstrate the proper evaluation of proposals calls into question the integrity of the procurement process.

79. As noted, such practices could cause DND to needlessly expend resources defending its actions before various bid-review bodies, and also runs the risk of procuring goods and services which do not meet the technical requirement.

80. Initially, file documentation was also found to be incomplete in most files. However, after a substantial delay, which may have been caused, in part, by the COVID issues noted above, DND was able to locate a significant number of relevant documents and OPO was able to complete the review of 36 files. Maintaining well-documented files enables departments to demonstrate fairness and transparency in their procurements and provides support for procurement decisions taken should those decisions be challenged.

81. In order to address issues identified, OPO made 6 recommendations regarding DND’s overall contracting processes. These recommendations can be found in Annex II of this report.

VII. Organizational response

82. DND’s organizational response is included at Annex II with its Departmental Response and Action Plan.

VIII. Acknowledgment

83. OPO wishes to express its appreciation to DND staff for their assistance and cooperation extended to the reviewers during this assessment.

Alexander Jeglic
Procurement Ombudsman

Annex I

Four Deficient and Non-Applicable Files

1. The TBCP requires procurement files be structured to facilitate management oversight, including a complete audit trail containing contracting details related to relevant communications and decisions. It specifically notes, as part of Canada’s obligations under international and national trade agreements, “…[c]ontracting authorities shall guarantee that complete documentation and records… are maintained to allow verification by the CITT that the procurement process was carried out in accordance with the [applicable sections of the trade] agreements”.

2. For certain procurements covered by free trade agreements, The CITT is the administrative body with the authority to inquire into complaints by potential suppliers of goods or services to the federal government. OPO also plays a role in the supplier complaint process; it can hear complaints about the award of contracts which, if not excluded from coverage by legislated exceptions or dollar value, would have been covered under the Canadian Free Trade Agreement.

3. In addition to the fact that these records are required to be kept for audit purposes, Treasury Board’s Guideline for Employees of the Government of Canada: Information Management (IM) Basics, requires all public servants to:

  • document business activities and decisions;
  • organize, file and store information resources within the corporate repository, ensuring easy access when needed to make decisions, and to support program and service delivery;
  • share and reuse information resources to support collaboration and facilitate business operations, respecting all legal and policy requirements;
  • be informed of and apply retention periods for information resources; and
  • protect and preserve information resources of business value critical to business resumption.

Two Deficient Files

4. OPO selected its 40 review files from a comprehensive listing of awarded contracts DND provided at the outset of this practice review. There were 2 files for which DND provided copies of the contracts, and some amendments to those contracts, but did not provide documents instrumental in determining how the contract was awarded - that is the file was missing the solicitation documents, all the proposals in 1 file, and 2 of 3 proposals in the other, as well as the bid evaluations.

5. OPO considers the inability to demonstrate and document decisions which ultimately led to the awarding of contracts valued at over $235,000 to be a significant concern, and a breach of the TBCP and Treasury Board’s Guideline for Employees of the Government of Canada: IM Basics. Without proper records, DND cannot document its business decisions, leaving it unable to demonstrate good stewardship of Crown resources or that the procurements were conducted in a fair, open and transparent manner.

Non-Applicable Files—Two Contracts Awarded on behalf of Department of National Defence by other organizations

6. Of OPO’s original sample of 40 files, 19 ultimately had to be swapped out, sometimes multiple times, because they were either awarded by PSPC, SSC or DCC or they were call-ups on PSPC/SSC standing offers or task authorizations on previously awarded contracts, and were not DND-awarded, competitive contracts in their own right.

7. As an example, regarding the SSC-awarded contract: The original request for 40 files was made on July 21, 2021. DND later advised that the contract was a call-up on a PSPC standing offer, and not a DND-awarded contract. OPO then requested a replacement contract. DND then advised the replacement contract was a task authorization on a pre-awarded contract, and therefore not eligible for review. OPO then requested another replacement contract. DND advised that this replacement contract was also out of scope. OPO then requested another replacement contract. DND ultimately advised that this contract had been awarded by SSC. All of this back-and forth transpired between July 21 and October 12, 2021, at which point it became too late in the review process to request a 4th replacement file.

8. As has been noted throughout this report, the quality of DND record-keeping hampers its ability to demonstrate compliance with Treasury Board obligations.

Annex II

Departmental response and action plan

Procurement practice review of evaluation and selection plans, solicitation, and evaluation of bids and contract award at the Department of National Defence (DND)

DND would like to thank OPO, and the review team, for its thoroughness and observations highlighted in the report. Procurement is an area of critical importance to the Department and DND appreciates the opportunity to improve on its procurement practices. DND will take this opportunity to review internal policies, guidance and training, as well as enhancements to its contracting compliance and oversight program in accordance with the Management Action Plans outlined below. Further, as part of its risk-based audit planning process for fiscal year 2022-23, DND is planning an internal audit of Defence procurement minor capital and low dollar value contracting.

DND is fully committed to ensuring its procurement practices are robust and support the principles of fairness, openness and transparency. DND adheres to Proactive Disclosure requirements through a comprehensive two-step process which includes security considerations in disclosure decisions to protect on-going missions, operations and/or suppliers in theaters of operation.

OPO’s observations were made during the COVID-19 pandemic in a remote working environment. During this challenging period of restrictions and adjustments, DND was able to continue to deliver on its mandate while remaining agile in its ability to respond to governmental requests for support in combatting the pandemic. Progressing departmental document management processes in an electronic environment will be a continued focus moving forward as we continue to seek opportunities to transition towards a hybrid work environment, enabled by electronic file management procurement recordkeeping.

Table 1: Summary of recommendations and responses
No. Recommendation Department of National Defence response/Action plan Timeline for implementation
1 DND should update its procurement policies and training to ensure they direct that:
  • Mandatory criteria are: properly defined; measurable; not based on future compliance or unnecessarily restrictive; and, bidders are informed of how the criteria can be met
  • Rated criteria: include clear rating scales, align with the statement of work requirements and not be unnecessarily restrictive
  • The Selection Methodology should be clearly explained and included in every solicitation.
 DND will review its policies, procedures, guidance and training to assess areas for improvement surrounding how evaluation criteria and selection methodologies are developed and reviewed. Updates and/or new policies, procedures, guidance and training will be developed and communicated where deficiencies are identified. In addition DND will also review its contracting compliance framework to align it to updated policies and procedures resulting from this Management Action Plan (MAP). This MAP will be closed once the necessary policy, procedures, guidance have been promulgated and communicated, training changes identified and contracting compliance framework updated. 30 September 2023
2 DND should update its procurement policies and training to ensure its bid solicitation processes:
  • Do not result in some suppliers being given an advantage over competitors through the uneven sharing of information
  • Invite the right number of suppliers and provide all bidders with contact information and the due date for the receipt of bids
  • Include measures to ensure the requirement to send regret letters is consistently implemented.
 DND will review its policies, procedures, guidance and training to assess areas for improvement and ensure bid solicitation processes are conducted in manner that are open, fair, transparent and that regret letters where required are provided to suppliers in a consistent manner. Updates and/or new policies, procedures, guidance and training will be developed and communicated where deficiencies are identified. In addition DND will also review its contracting compliance framework to align it to updated policies and procedures resulting from this MAP. This MAP will be closed once the necessary policy, procedures, guidance have been promulgated and communicated, training changes identified and contracting compliance framework updated. 30 September 2023
3 DND should update its procurement policies and training to require all evaluators, regardless of employment status, to assess and confirm they are not in a conflict of interest position prior to obtaining bid documentation and/or participating in the evaluation process. DND will review its policies, procedures, guidance and training to assess areas for improvement and ensure that all evaluators regardless of employment status confirm they are not in a conflict of interest prior to obtaining bid documentation and/or participating in the evaluation process. Updates and/or new policies, procedures, guidance and training will be developed and communicated where deficiencies are identified. In addition DND will also review its contracting compliance framework to align it to updated policies and procedures resulting from this MAP.This MAP will be closed once the necessary policy, procedures, guidance have been promulgated and communicated, training changes identified and contracting compliance framework updated. 30 September 2023
4 DND should update its procurement policies and training to emphasize:
  • Technical evaluators must strictly follow the solicitation’s evaluation plan and award contracts only to compliant bidders
  • Any compliance failure regarding a mandatory criterion results in the immediate disqualification of the bid
  • Evaluation results must be documented to fully explain how evaluators awarded points for rated evaluation criteria and determined compliance/non-compliance for mandatory evaluation criteria
 DND will review its policies, procedures, guidance and training to assess areas for improvement associated with how bid evaluations are conducted and documented. Updates and/or new policies, procedures, guidance and training will be developed and communicated where deficiencies are identified. In addition DND will also review its contracting compliance framework to align it to updated policies and procedures resulting from this MAP. This MAP will be closed once the necessary policy, procedures, guidance have been promulgated and communicated, training changes identified and contracting compliance framework updated. 30 September 2023
5 DND should update its procurement policies and training to ensure all solicitations include the entire requirement as known at the time of publication of the solicitation, and that unexpected amendments are minimized, taking into account DND’s operational requirements DND will review its policies, procedures, guidance and training to assess areas for improvement associated with mitigating to the extent possible the number of unexpected contract amendments. Updates and/or new policies, procedures, guidance and training will be developed and communicated where deficiencies are identified. In addition DND/ADM(Mat) will also review its contracting compliance framework to align it to updated policies and procedures resulting from this MAP. This MAP will be closed once the necessary policy, procedures, guidance have been promulgated and communicated, training changes identified and contracting compliance framework updated. 30 September 2023
6 DND should ensure the established electronic system accurately tracks, controls and reports on its contracting activities and ensures that all contracts that are required to be proactively disclosed are. DND will explore the ability to leverage DND’s ERP, Defence Resource Management Information System (DRMIS), to validate CDMS data and enhance the ability to accurately report contracting activities in order to ensure that all contracts required to be proactively disclosed are reported. This MAP will be closed once the analysis to leverage DRMIS is completed, and if achievable, implemented to validate and supplement the CDMS data with the objective of ensuring that all contracts that are accurately captured by the department. 30 September 2024
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