Procurement practice review of Health Canada and the Public Health Agency of Canada New
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1. The Office of the Procurement Ombudsman (OPO) conducted a procurement practice review of Health Canada and the Public Health Agency of Canada (HC/PHAC).
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:
- 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. HC/PHAC were selected for review as one 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. HC’s mission is to help the people of Canada maintain and improve their health with a commitment to improving the lives of all of Canada’s people and to making Canada’s population among the healthiest in the world as measured by longevity, lifestyle and effective use of the public health care system. PHAC’s mission is to promote and protect the health of Canadians through leadership, partnership, innovation and action in public health.
6. Procurement and contracting for both HC and PHAC is conducted by their Procurement and Investment Management Directorate (PIMD) under a Shared Partnership Agreement. The Procurement and Contracting Division is part of the Procurement and Investment Management Directorate under the Chief Financial Officer Branch (CFOB) at HC. The Procurement and Contracting Division is responsible for providing functional guidance and to assist Program Managers with the identification and preparation of appropriate procurement strategies and contracts to support the Departmental objectives and mandate. The Procurement and Contracting Division of PIMD has approximately 40 employees.
7. According to information provided by HC/PHAC, during OPO’s review period of May 1, 2020 to April 30, 2022, their procurement and contracting resources were significantly impacted by the global COVID-19 pandemic. Combined, HC/PHAC awarded over 17,000 contracts worth an estimated $22B during the review period, which represents a significant increase in both the value and volume of contracts. The larger value items above the department/agency delegation, worth $20.4B, were awarded through Public Services and Procurement Canada (PSPC) for personal protective equipment (PPE), vaccines and other COVID-19 related services. As these contracts were not awarded by HC/PHAC staff, these fell outside of the scope of OPO’s review, but OPO wishes to recognize the sheer scope of the efforts of HC/PHAC staff during this critical time period.
II. Objective and scope
8. This review was undertaken to determine whether HC/PHAC’s procurement practices pertaining to evaluation criteria and selection plans, solicitation documents, and evaluation of bids and contract award, supported the principles of fairness, openness and transparency. To make this determination, OPO examined whether HC/PHAC’s procurement practices were consistent with Canada’s obligations under applicable national and international trade agreements, the Financial Administration Act and regulations made under it, the Treasury Board Contracting Policy (TBCP), the Directive on the Management of Procurement (DMP), and, when present, departmental guidelines.
9. The following three lines of enquiry (LOE) were used to assess the highest-risk procurement elements identified in paragraph 3 above:
- LOE 1: Evaluation criteria and selection plans were established in accordance with applicable laws, regulations and policies
- LOE 2: Solicitation documents and organizational practices during the bid solicitation period were consistent with applicable laws, regulations and policies
- LOE 3: Evaluation of bids and contract award were conducted in accordance with the solicitation
10. This report also includes a section of other observations identified by OPO through the analysis of the above LOEs.
11. OPO’s review consisted of an assessment of procurement files for contracts awarded by HC/PHAC between May 1, 2020 and April 30, 2022. This review did not include construction contracts, non-competitive contracts, acquisition card activity, standing offers, contracts awarded by PSPC or Shared Services Canada on behalf of HC/PHAC, or any procurement activity for which HC/PHAC were not the contracting authority (CA). According to information provided by HC/PHAC, during OPO’s review period, the 2 organizations combined to award a total of 248 contracts that fall under OPO’s selection criteria, at a value of approximately $369M.
12. From these 248 contracts, OPO selected 40 competitive procurement files for assessment. The 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. The 40 files selected for review were identified as:
- 10 open and traditional competitive requests for proposals (RFP);
- 22 RFPs issued under supply arrangements (SA);
- 4 Requests for Quotations or Requests for Services (RFQ/RFS); and
- 4 files where the solicitation documents could not be located.
14. HC/PHAC’s procurement practices pertaining to evaluation criteria and selection plans, solicitation documents, and evaluation of bids and contract award were assessed against the three LOEs noted above. To address the issues identified in the review, OPO made 5 recommendations which are summarized in Annex I of this report. The recommendations are based on the analysis of information and documentation provided to OPO by HC/PHAC during the course of the review.
15. 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.
Line of enquiry 1: To determine whether evaluation criteria and selection plans were established in accordance with applicable laws, regulations and policies
16. Section 10.7.27 of the TBCP states “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. ... Fairness to all prospective contractors and transparency in the award process are imperative.”
17. On May 13, 2021, Treasury Board’s DMP took effect as a replacement for the TBCP and departments were given a year to transition from the TBCP to the DMP. Between May 13, 2021 and May 13, 2022, departments could use either TBCP or DMP-based processes; HC/PHAC did not fully transition to the DMP until after the end of OPO’s review period and none of the files were conducted using the DMP for guidance.
18. Using clear and precise language to define the evaluation criteria and selection methodology helps bidders prepare responsive bids, and enables evaluators to apply those same criteria equally to all bidders.
19. LOE 1 applies to all solicitations, which inform bidders of the information their bids must contain and advise how the contract will be awarded. However, HC/PHAC could not produce the solicitation documentation for 4 files, therefore this LOE only applied to 36 files. Of the 36 applicable files: 2 were awarded based solely on price; 9 were awarded based on price as well as the bidder having to meet at least 1 mandatory technical evaluation criterion; and 24 were awarded where mandatory and rated technical evaluation criteria factored into the award decision. There was also 1 file where it was unclear if some of the evaluation criteria were rated or mandatory. All 36 files were examined to determine if the evaluation criteria and selection methodologies were: clearly communicated in the solicitation; aligned with the requirement; and not overly restrictive. The method of allocating points to weighted criteria was also assessed to determine whether instructions were clearly communicated, and whether the number of points reflected the relative importance of the criteria.
Mandatory criteria were not overly restrictive and did not unnecessarily favour or penalize any particular bidder or group of bidders, and in all but 1 file they were aligned with the requirements; however, in 7 files, mandatory criteria were not defined in a clear, precise and measurable manner.
20. Mandatory evaluation criteria identify the minimum requirements essential to the successful completion of the work. They are used to highlight to bidders what their bids must demonstrate to pass to the next phase of evaluation. Not meeting a single mandatory criterion must result in the disqualification of the bid. CAs must ensure mandatory criteria are properly described so that: (a) bidders clearly understand what they are and how to meet them; and (b) evaluators have an objective, measurable standard against which to assess the bids. The criteria should be structured so evaluators can conduct a “pass/fail” analysis, i.e., “pass” moves the bid forward, “fail” results in the disqualification of the bid.
21. Unclear mandatory criteria have the potential to lead to inconsistent evaluations of bids, which can undermine the fairness and transparency of the procurement process. The challenge facing departments is to establish evaluation criteria which are not overly restrictive, thereby allowing more suppliers to meet them, while continuing to capture the essential elements of the capabilities being sought.
22. In all cases, mandatory criteria were not overly restrictive and did not unnecessarily favour or penalize any particular bidder or group of bidders.
23. In 33 of the 34 applicable files, the mandatory criteria aligned with the requirements described in the solicitation. The only exception was a solicitation for the short-term rental of warehouse space for surgical masks. In this file, the solicitation was limited to an e-mail to an unknown number of suppliers from a HC/PHAC representative describing the requirement, i.e., temporary warehouse space of up to 1000 standard pallet spaces and a “re-labeling process” for the surgical masks. Other than this e-mail, the file did not contain a solicitation document, so there were no stated evaluation criteria nor a specified basis of selection indicating how the contract would be awarded. As discussed below under LOE 3, the file did contain an evaluation summary, which showed 3 received bids were assessed against three criteria—“warehouse space”, “transportation fleet” and “relabeling”—but what exactly was assessed is unknown.
24. In 27 of the 34 applicable files, mandatory criteria were clear, measurable and demonstrable. However, in the other 7 files mandatory criteria were not communicated in a clear, precise or measurable manner. As noted above, poorly-defined criteria can: undermine the fairness and transparency of the bid solicitation process; cause bidders to submit non-compliant or sub-optimal proposals; and result in unexpected or inconsistent evaluations between evaluators. Examples include the following:
- In 3 files the mandatory criterion properly used the word “must” to describe what bids have to demonstrate to meet the criterion; however, the criterion also improperly used the word “should”, as demonstrated in the following example: (OPO highlighting)
The bidder must demonstrate that the proposed resource has a minimum of five (5) years of experience providing informatics professional services as a Database Administrator within the last eight (8) years.
For the project(s) listed as experience, the following information should be identified on the proposed resource’s résumé:
- The name of the client organization (to whom the services were provided);
- The name, title, telephone number, location and e-mail address of the client contact (note that the client contact must be a representative of the organization who is formally appointed by the organization to manage a project with specific accountability for achieving defined project objectives within allocated resources);
- A brief description of the type and scope of services that meets the identified criteria provided by the resource;
- The dates and duration of the project (indicating the years and months [YYYY/MM] of engagement and the start and end dates of the work).
In this case, the inclusion of the word “should” means bidders are not compelled to provide something, nor can they be disqualified for not providing it if they can demonstrate compliance with the mandatory criterion by other means. If HC/PHAC felt this information was essential (i.e. mandatory) to determine if the proposed resource met the requirement, then they were required to use the word “must” when describing the information to be provided.
- In 2 files it was unclear how bidders were to demonstrate they met the mandatory criteria. As such, the mandatory criteria could not be measured in terms of “pass/fail”:
- In 1 file related to a water and air quality toolkit revamp and video development, criterion M2 required bidders to "…demonstrate that they have the resources to handle the distribution of both products. Must provide a list of the provinces and/ or territories you are able to distribute to… " It was unclear on what basis HC/PHAC were going to determine how M2 was met, as there was no listed minimum number of provinces or territories to “pass” the criterion; and
- In 1 Temporary Help Services (THS) file to hire 2 Senior-level Privacy Advisors, criterion M5 required the proposed resource to have “experience” in providing advice. It is unclear how much experience was required to meet this mandatory criterion, and even 1 day of experience providing advice would appear to meet the requirement.
- In 2 files the mandatory criteria conflicted with the requirements of the SA under which the RFP’s were competed:
- In that same THS file for 2 Senior-level Privacy Advisors (THS category 13.1), 1 of the solicitation’s mandatory criteria required 24 months of relevant experience. However, to be awarded the contract, bidders had to meet generic THS category 13.1 requirements, including that proposed senior-level resources must have a minimum of 48 months of experience. 24 months of experience would only have qualified a resource as an “intermediate-level” resource. There is confusion as to whether the experience required was 24 months or 48 months. If HC/PHAC had only needed intermediate-level resources, the contract could have been a lesser value, as intermediate resources typically charge less than senior-level ones; and
- In 1 file for a senior level consultant, the mandatory Task and Solutions Professional Services (TSPS) flexible grid requires senior-level resources to obtain 95 points. The flexible grid in the RFP, however, indicated only 90 points were required for a senior level resource.
The vast majority of point-rated criteria and rating scales were not overly restrictive, were appropriate to the requirement, and reflected the relative importance of the criteria in the context of the overall requirement; however, 5 of the 24 applicable files contained point-rated criteria or scoring grids which lacked clarity.
25. In addition to Section 10.7.27 noted above, Section 10.7.25 of the TBCP states “criteria should identify accurately all the performance elements significant to the success of the project and should measure both the competence of the firm and the worth of its particular technical approach.”
26. Only bids which meet the mandatory criteria are subject to point rating. Rated criteria are used to assess various elements of the technical bid so that the relative merits of each bid can be used to distinguish one bid from another. The maximum points that can be achieved for each rated criterion must be specified in the solicitation document. When point rating is used, bids may have to achieve a minimum number of points overall to be considered responsive, and they may also have to achieve a minimum number of points for certain individual criteria. Solicitation documents must clearly identify any minimum thresholds and clearly indicate whether such minimums are mandatory. When evaluating knowledge and experience, the solicitation must specify how knowledge and experience will be assessed.
27. In 23 of 24 applicable files, the point-rated criteria were not overly restrictive and did not unnecessarily favour or penalize particular bidders. However, 1 file did show favouritism toward suppliers with a certain amount of experience:
- In 1 file to hire up to 5 senior business consultants, suppliers with more than 8 years of experience were favoured. In 3 of 4 point-rated criteria (RT1, RT2 and RT3) the scales had an “extra” 5 point jump for resources with 8 or more years of experience:
- Less than 5 Years = 0 Points
- 5 to 6 Years = 5 Points
- 6 to 7 Years = 10 Points
- 7 to 8 Years = 15 Points
- 8 or more years = 25 Points
28. There were 4 files for which the rated criteria were unclear:
- In 1 file, the scoring grid indicated the bidder would be awarded 5 points for each of the 4 resources if they had worked for the bidder for six months in the past three years. This implies a maximum of 20 points (4 resources x 5 points); however, the RFP stated a maximum score for this criterion was 10 points. If the intent was to award five points per resource for up to two resources (2 x 5 points), it should have been so stated;
- Similarly, in 1 file for French Technical Editing Services, the point allocation table for point-rated criterion RTC 2 (sub-criteria 2.1 to 2.5) went from zero points to a maximum of 3 points; whereas the RFP stated sub-criteria 2.1 to 2.5 were each worth up to 5 points;
- In a file for a TSPS Stream 2.3 senior-level business consultant, the RFP had two different minimum points thresholds for point-rated criteria. It stated a minimum overall score of 70% was required for each proposed resource or the bid would be rejected. It also stated bids that failed to obtain 35 of the 86 maximum points (equivalent to 40.7%) would be rejected; and
- In 1 file, the rating scales for R1 (also referred to as M6 in the evaluation process) and R2 (also referred to as M7 in the evaluation process) did not specify the method for allocating points. OPO notes HC/PHAC did not provide the RFP for this file but it appears M6/R1 required at least 2 examples of the bidder providing courses demonstrating e-learning design approach, creativity, interactive components, dynamic visuals, and audio capabilities. According to e-mails about the evaluation, there were 4 sub-criteria for M6/R1, each worth 10 points, for a total of 40 points. A PHAC project manager noted a potential issue with the scoring of M6/R1 and asked if they could assess both examples (each out of 40) but only include the highest rated one in order to align with the 40 points available for the overall criterion. However, no changes were made as the CA said the RFP had already been sent out.
29. There were also 2 files where there was duplication in the scoring grid, meaning the same number appeared in two categories. It is therefore unclear how many points should be awarded when the bidder achieves the amount that is shared between two categories. In a file for change management services, bidders were awarded points depending on amount of experience relevant to the criterion:
- 1 to 12 months = 2 points
- 12 to 24 months = 4 points
- 24 to 36 months = 6 points
- 36 to 48 months = 8 points
- 48 or more months = 10 points
In this example, if a bidder demonstrates 12 months of experience, it is unclear whether they would be awarded 2 or 4 points. The same confusion applies regarding 24, 36 and 48 months of experience, respectively.
30. Clear, precise and measurable evaluation criteria support fair and transparent procurements that enable bidders to know the requirements and the methods by which their proposals will be evaluated. Failure to clearly define evaluation criteria at the outset also carries the risk evaluators may struggle to interpret criteria during the evaluation process, or explain to unsuccessful bidders why their proposal was disqualified. It can also be difficult for evaluators to defend their evaluations against external challenges when those criteria are unclear or open to multiple interpretations. In addition, unclear, vague criteria increase the risk of contracts being awarded to non-compliant bidders or the wrong bidder. It also creates an increased administrative burden on suppliers and CAs as more questions and answers are required to clarify unclear criteria.
Common selection methodologies were chosen in all 36 files where HC/PHAC were able to produce the solicitation documents. There were 5 files where the selection methodology was not clearly communicated.
31. For this element of the review, HC/PHAC could not provide solicitation documents in 4 cases. For the 36 files for which OPO has the solicitation documents, common selection methodologies such as “lowest priced responsive bid”, “lowest price per point” and “highest responsive combined rating of technical merit and price” were used.
32. There were 2 files for which the solicitation was not clearly communicated, as prospective bidders were only sent an e-mail which did not identify the manner by which the contract would be awarded.
33. There were 3 instances where the selection methodology was not clearly communicated. Three such examples are as follows:
- In 1 file to perform ongoing maintenance of PHAC’s centralized data holdings, the RFP stated the basis of selection was the highest responsive combined rating of technical merit (70 percent of the points) and price (30 percent of the points). Section 4.4 (Basis of Selection) in the RFP stated 35 points overall (70%) of 50 rated points was required. However, the point-rated technical criteria in the RFP indicated the maximum score was 60 points and stated 45/60 points (75%) was required to be considered compliant;
- In another file, for digital publishing, the basis of selection stated a bid must obtain a minimum of 6 of the 12 (50%) available points to be considered responsive. The rated criterion table, however, stated 40 of the 70 (57%) available points was the minimum pass mark.
- In 1 file related to a water and air quality toolkit revamp and video development, the contract was to be awarded to the bidder who provided the highest rated proposal within a budget, but that budget was not identified.
34. A lack of clarity in the selection methodology can result in a failed procurement process. Lack of clarity can result in confusion regarding whether bids are compliant or not, and may necessitate the cancellation of the solicitation process. This would unfairly penalize bidders, and waste both time and money for buyers while further jeopardizing their ability to acquire the goods or services in a timely manner.
HC/PHAC should review its policies, processes, guidelines, training materials and template library and update where appropriate to strengthen guidance to support the development and use of:
- Clear and measurable mandatory criteria;
- Clear and measurable rated criteria;
- Scoring grids that align with the RFP requirements; and
- A clear basis of selection in solicitation documents.
Line of enquiry 2: To determine whether solicitation documents and organizational practices during the bid solicitation period were consistent with applicable laws, regulations and policies
35. The TBCP set 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 included the minimum requirements necessary in the solicitation document as well as mandatory elements related to the design and execution of the process.
36. Solicitation documents must contain work descriptions or specifications defined in terms of clear outputs or performance requirements. Solicitation documents must also contain the objectives to be attained and timeframe for delivery and the assessment and award criteria. HC/PHAC have developed guidance documents and tools which stipulate the deliverables and services required to fulfill the contract and define the tasks to be accomplished or service to be delivered in clear, concise terms. The clarity of this information is key to obtaining the necessary goods or services to support HC/PHAC’s mandate.
37. LOE 2 assessed the solicitation documents (excluding evaluation criteria and selection plans that were assessed under LOE 1) to determine whether they, among other things, 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 period of time, and whether communications with suppliers supported the preparation of responsive bids.
38. Within OPO’s 40-file sample, 23 were issued under the framework of existing SAs and 17 solicitations were “stand alone” and not associated with any other contracting vehicle. SAs outline the rules for solicitation processes, which may differ from those which normally govern a solicitation process.
Solicitation documents and processes
With 1 exception, solicitation documents provided a clear description of the requirements, and in most cases contained clear instructions for submitting bids or proposals and posing questions during the solicitation period.
39. The solicitation document sets the rules for the contracting process. Ensuring solicitation documentation is accurate and complete is important as it eliminates ambiguities, contradictions or other discrepancies in the solicitation process. This helps ensure suppliers have all the information they need to prepare and submit responsive bids and reduce the number of questions and delays from suppliers as they address any discrepancies or missing information. This also reduces the effort required on the part of departmental staff to respond to questions and requests for clarifications during the solicitation period.
40. As noted above, of the 40 sample files, HC/PHAC could not produce the solicitation documents in 4 cases. In 1 file, the technical authority (TA) solicited bids and conducted the evaluation prior to involving the appropriate CA. In 2 cases the CA contacted suppliers via e-mail, but without keeping the actual solicitation on file. In the final case, 3 quotes were received, but there was nothing on file demonstrating how HC/PHAC sought those quotes.
41. In all 4 cases, there were multiple bids/quotes, so HC/PHAC had been conducting competitive processes. The failure to produce the solicitations points to a shortcoming in HC/PHAC’s record-keeping practices, even when taking into account the additional demands of COVID-19-related procurement. Without having the solicitation document, HC/PHAC cannot demonstrate that it followed the proper procurement protocols and that its practices were fair, open and transparent.
42. For the 1 file which did not provide a clear description of the requirements, the file contained an e-mail outlining the requirement and asking for a quote, as opposed to a formal RFQ with templated terms and conditions. OPO notes it was done in May 2020, for a COVID-related rental of warehouse space for personal protective equipment (PPE) and the relabeling of cartons of pre-purchased masks. It was done under a very short timeframe, 1 day, via e-mail, to at least 3 suppliers. What was unclear, however, had to do with what access to the warehouse would be provided to what companies to deliver/store the PPE and conduct the re-labelling. While recognizing the challenges and urgency associated with many COVID-related procurements, appropriately documenting files to explain what actions were taken remains an important requirement. The evaluation of these quotes will be discussed under LOE 3.
43. With the exception of these 5 files, the solicitation documents provided a clear description of the requirements and contained clear instructions for submitting bids and posing questions during the solicitation period. 33 of the 40 solicitations were open to the required number of suppliers and 37 of 40 respected the required period of time for posting.
33 of the 40 solicitations were open to the required number of suppliers and 37 of 40 respected the required period of time for posting.
44. In accordance with section 6 of the Government Contracts Regulations, if the following conditions are not met, CAs are expected to solicit bids:
- 6 …a contracting authority may enter into a contract without soliciting bids where
- the need is one of pressing emergency in which delay would be injurious to the public interest;
- the estimated expenditure does not exceed
- in the case of a goods contract, $25,000,
- in the case of a contract to be entered into by the Minister for International Development for the acquisition of architectural, engineering or other services required in respect of the planning, design, preparation or supervision of an international development assistance program or project, $100,000,
- in the case of a contract for the acquisition of architectural, engineering or other services required in respect of the planning, design, preparation or supervision of the construction, repair, renovation or restoration of a work, $100,000, and
- in the case of any other contract to which these Regulations apply, $40,000;
- the nature of the work to be contracted for is such that it would not be in the public interest to solicit bids; or
- only one person is capable of performing the contract.
45. For the items noted in subsection 6(b), it is the estimated value of the prospective contract which is used to see if it falls under the listed dollar thresholds. If the estimated value of a contract exceeds these limits, but falls under the dollar thresholds for the trade agreements, departments can conduct “traditional competition” where supplier lists can be used to solicit bids from a number of suppliers. For those cases where the estimated contract value exceeds the trade agreement thresholds, and it is not being conducted under an SA which may have different rules, departments are to post an open RFP on the Government’s electronic tendering service (GETS).
46. For those solicitations conducted under an SA, the SA will often state the minimum number of pre-qualified suppliers which must be invited to bid. As an example, for a TSPS requirement between $100,001 and $3.75M, only 15 pre-qualified bidders—up to 10 chosen by the Department and 5 at random—have to be invitedFootnote 1. For an “open” RFP, valued at the same amount, it must be posted on GETS, where literally hundreds of professional service suppliers could see the requirement and submit a bid.
47. Of the 17 files which were not conducted under an SA, there were 6 where an open competition was run and 11 for which only a limited number of suppliers were contacted. Of those 11, there were 7 files for which the solicitation was potentially not opened to the required number of suppliers. Randomly selecting suppliers to solicit bids undermines the integrity of an open procurement process, potentially breaches trade agreement requirements and is unfair to suppliers not invited to bid:
- In 3 files, the estimated value of the contract required HC/PHAC to compete the requirement openly. Instead, the RFP was sent directly to certain suppliers with no noted justification as to how those particular suppliers were identified nor any documentation on file to justify the use of a traditional competitive solicitation method:
- OPO selected 2 contracts which were awarded pursuant to the same solicitation process; for the printing and distribution of COVID-19 communications products. The RFP had been sent to 6 suppliers with no explanation of why HC/PHAC did not use an open competitive process. Originally the estimated value of each contract was $542,400. Ultimately, the contract values were $542,400 and $3,749,999.47, the second of which is just under HC/PHAC’s delegated authority for services ($3.75M) and is greater than HC/PHAC’s emergency contracting limit of $3M; and
- In 1 file for data analysis, the estimated contract value, including option periods, was $165,000 and, so, it should have been openly competed. Instead, the RFP had been e-mailed directly to 11 suppliers with the statement “…your organization has been identiﬁed as authorized to receive the data.” This statement implies there was some sort of security restriction associated with the file. However, the contract contained no security requirement.
- In 1 file identified as an RFQ to produce a suite of communication tools, there was no record of any e-mail/invitation being sent to suppliers nor was there any record identifying which suppliers were supposed to be invited to bid. Proactive Disclosure, where, since 2004, departments are required to disclose contracts and amendments valued over $10,000, stated this was a “Traditional Competitive” solicitation, but HC/PHAC did not provide any information about how this process was competitive.
- In 1 file for French language training, it was unclear when and what information had been provided to the two bidders, either about the work to be done or the bidding process (for example, duration of the bidding period, deadline for submitting bids, communication during the bidding period). According to the file, HC/PHAC contacted 1 supplier in May 2020 and received a quote from that supplier in June 2020. Then, in August 2020, HC/PHAC sought another bid from a second supplier, which submitted its bid in September 2020. There was no other information on file on other possible invitees nor a justification as to why the solicitation was limited to these two suppliers; and
- for 1 file which was conducted under an SA, the file only contained an unfinished Word version of the RFP, which identified 6 invitees, with no actual invitation e-mails on file. The SA does not specify the minimum number to invite, so OPO is unsure if other suppliers should have also been invited.
48. The period of time a solicitation must remain open also varies depending on the nature of the solicitation. When SAs are used, CAs must respect the bid solicitation rules in the particular SAs, which can vary. Using the example above, for solicitations issued under the TSPS SA, requirements between $100,001 and $3.75M have a minimum bidding period of 15 calendar days. A similarly-valued, non-emergency, stand-alone requirement conducted as an open RFP, and subject to the trade agreements, would have to be posted for a minimum of 25 days.
49. In addition to the file noted above where there may have been security implications and which should have been openly competed, the bidding period was only 15 days with no justification on file. There were also 4 other files for which the solicitation period was shorter than would normally be required:
- 1 file for the creation of a bilingual training package related to COVID-19-related contact tracing, the CA answered 8 questions the day before the due date for the receipt of bids. These questions were both administrative and technical in nature, for example, one question asked if the contract was to be awarded to the lowest-priced supplier, others asked how many resources were needed. In order to allow all suppliers to process these responses, even considering the COVID-19 implications, HC/PHAC should have considered extending the bid closing date; and
- there were 3 other files which had a shorter bidding period than would be normally expected, however they were related to COVID-19 contracting and so the shorter period is understandable. In all 3 cases, multiple bids were received.
50. Most disconcerting to OPO was a solicitation for the evaluation of COVID-19 Infection Prevention and Control Guidelines for which the procurement process was performed almost entirely outside of HC/PHAC’s contracting cell. There was no indication on the file this was an emergency procurement, and so OPO assumes it should have followed the normal HC/PHAC procurement processes. In this case, the HC/PHAC TA approached 3 suppliers at different times to submit a proposal, which each supplier did. HC/PHAC subsequently met, via MSTeams, with one bidder’s staff on November 10th, and with the second bidder’s staff on November 12th with no record of when or if there was a meeting with the third bidder. There was no evaluation grid on file stating how bids were going to be evaluated. It is even questionable as to whether the suppliers knew they were in a competition for the contract. Once HC/PHAC contracting did become involved, it was determined this should have been a solicitation under PSPC’s ProServices SA. The successful bidder, however, did not hold a ProServices SA but was awarded the contract anyway. That the TA was able to conduct the majority of the contracting process without the HC/PHAC contracting cell demonstrates a lack of oversight and understanding of roles and responsibilities.
HC/PHAC should review its procurement policies, processes, guidelines, training and template library and update where appropriate to describe and delineate the roles and responsibilities of the contracting and technical authorities to ensure solicitation processes are conducted in accordance with the relevant governing policies.
Communication with suppliers
Communications with suppliers during the solicitation period appeared to be appropriate and support the preparation of responsive bids; records of communications were incomplete in 8 of 25 applicable files.
51. Section 2 of the TBCP states “[g]overnment 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 “[p]rocurement 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…” These requirements apply to all aspects of the procurement process, including interactions with suppliers.
52. During the solicitation period, suppliers may ask questions to clarify some element of the technical requirement or an administrative aspect of the RFP. In 17 of 25 files where suppliers did ask questions, HC/PHAC responses adequately addressed the questions and supported the suppliers’ efforts to prepare responsive bids via the issuing of amendments. Depending on the solicitation method used, these amendments/responses were either posted to GETS or provided by e-mail to all invited suppliers. However, in 7 files the records of communication were either incomplete, and, in 1 case, they demonstrated HC/PHAC had not informed all suppliers equally:
- In 4 files, while there was evidence of the questions and answers on file, there was no evidence the answers were shared with all the invited suppliers. In addition, the questions and answers were saved as a “.pdf” file as opposed to stored as the original correspondence, which would have indicated when and from whom the questions were received and when and, in one case, to whom, the answers had been sent out;
- In 1 file for Emergency First Aid Training, the e-mail extending the due date for the receipt of bids was only sent to 2 of the 3 invitees.
- In the file mostly run by the TA regarding the evaluation of the PHAC’s COVID-19 Infection Prevention and Control Guidelines, according to the e-mails on file, PHAC personnel met with one supplier on November 10, with another supplier on November 12 and there was no record of if or when they met with the third supplier. There was nothing on file indicating any exchanges, questions, answers from 1 supplier were shared with the other 2 suppliers. The 3 submitted bids at different times; and
- There were also 2 files where it appears correspondence was missing:
- In a 1 file for an information technology (IT) administrator, there were 3 amendments, 2 of which made changes to the evaluation criteria and 1 of which extended the due date for bids. However, there was no supplier/Crown correspondence on file, so it was unknown if those changes were made as a result of suppliers’ questions, or if they were initiated by the CA/TA;
- In 1 file for snow removal services, the RFP required bidders to “… communicate with the Contracting Authority no later than October 2, 2020 at 2:00 p.m. to confirm attendance and provide the name(s) of the person(s) who will attend…” the mandatory site visit. 3 suppliers signed the attendance sheet for the visit, but there was no record of any correspondence with bidders during the solicitation period. Even if there had been no questions regarding the required snow removal services, there should have been correspondence with suppliers confirming their attendance.
53. Without a complete record of communication, OPO is unable to determine if all suppliers’ questions were answered in a timely manner and whether all suppliers received the same information at the same time. This information is relevant to all potential bidders in the preparation of their bids, including deciding whether to even submit a bid. In addition, being unable to demonstrate all relevant information has been shared with all potential bidders calls into question the fairness and transparency of the procurement process.
Regret letters were not sent or award notices not posted in 14 of 40 sample files.
54. Following the award of a contract, the Department should provide a debriefing to unsuccessful bidders upon request. The purpose of a debriefing is to explain to unsuccessful bidders why their bid was not accepted, allowing them to improve their future documents. A debriefing demonstrates the fairness, openness, and transparency of the federal government contracting process. It is also an opportunity for CAs to improve future solicitations by using the comments and suggestions provided by unsuccessful bidders.
55. HC/PHAC received multiple bids for 28 of the 40 files. For the 12 files for which only 1 bid was received and the contract was awarded to that bidder, regret letters or debriefings were not required. Regardless of the number of bidders, if a contract is valued at over $10,000, HC/PHAC is required to disclose it on Proactive Disclosure and, if the solicitation was conducted under one or more of the trade agreements, departments are required to post the contract award notice, normally on GETS. In OPO’s sample, HC/PHAC were required to post all 40 contracts on Proactive Disclosure; for the 18 contracts awarded under the trade agreements, a contract award notice should have been posted on GETS.
56. In the following files, HC/PHAC did not meet these requirements:
- in 12 files there was no indication that regret letters were sent to all unsuccessful bidders. This was either because there were no regret letters on file or, there were draft versions of regret letters, but without any indication those drafts had been sent, i.e., there was no e-mail on file sending those letters to the unsuccessful bidders; and
- in 2 files HC/PHAC did not provide regret letters or post a contract award notice/proactive disclosure. In 1 of those files for the rental of refrigerated trailers, HC/PHAC advised the two unsuccessful bidders “…thank you very much for your response on rentals....We will not be requiring these services at this time, but thank you once again.” This does not inform the bidders: (a) if a contract was being awarded, (b) the name of the successful supplier, (c) the resulting contract value, or (d) offer them a debrief. That statement could be interpreted to mean no contract would be awarded or that the solicitation had been cancelled.
57. Regret letters offer an opportunity to seek a more detailed debriefing from the CA or inform them of potential recourse mechanisms such as OPO or the Canadian International Trade Tribunal. Regret letters also provide valuable information to help improve the suppliers’ chances for success in future contracting opportunities. It also adds transparency to Government procurement by explaining the overall results of the process, including the name of the successful bidder and the relative advantages of that winning bid.
To support open and transparent procurement practices, HC/PHAC should review its policies, processes, guidelines, training, and template library and update where appropriate to assist in ensuring that:
- all relevant information is shared simultaneously with suppliers;
- supplier communications are documented to provide a complete audit trail;
- regret letters are sent to all unsuccessful bidders; and
- award notices/Proactive Disclosure submissions are published as per applicable requirements.
Line of enquiry 3: To determine whether the evaluation of bids and contract award were conducted in accordance with the solicitation
58. OPO examined how the mandatory and rated criteria were evaluated as well as if other administrative requirements of a solicitation were met.
59. In order to ensure the fairness and defensibility of evaluation processes, section 10.7.27 of the TBCP required that evaluation criteria and their weighting be established beforehand, 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 resulting in the contract being wrongly awarded. Inconsistent evaluations may also call into question the integrity of the procurement process.
60. The TBCP also required evaluators to document the results of the bid evaluation:
- 12.3.1 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 including the identification of involved officials and contracting approval authorities.
- 12.3.2 Under the North American Free Trade [Agreement], the World Trade Organization—Agreement on Government Procurement, and the Agreement on Internal Trade, Contracting authorities shall guarantee that complete documentation and records, including a signed and dated record of all communications with suppliers, are maintained to allow verification by the Canadian International Trade Tribunal that the procurement process was carried out in accordance with the agreements.
61. Of the 40 files reviewed, 5 were awarded on the basis of price and, so, had a limited evaluation processes. Of the remaining 35 files: 10 had an evaluation process that included mandatory technical evaluation criteria and a financial evaluation; and 25 had technical evaluations of both mandatory and rated criteria as well as a financial evaluation. These files were examined to determine whether a process had been established to ensure: the consistent evaluation of bids; evaluations had been carried out in accordance with the planned approach; and, results of the evaluations were adequately documented.
Managing the evaluation
In 18 of 35 files, the CA did not provide direction to the technical evaluators to support proper evaluation processes. In no case did any evaluator confirm they were not in a conflict position vis-à-vis the received bids.
62. CAs are responsible for the management of the bid evaluation process. Prior to starting the technical and financial evaluations, the CA must first ensure the bids are complete, for example, certifications are present, and the bids are signed. The CA then sends the technical evaluators the technical portions of the proposal in which the bidder explains how it meets the solicitation’s requirements. Once the results of this evaluation are returned to the CA, the CA conducts an evaluation of the financial portion of only those proposals which passed the technical evaluation. Failure to ensure the consistent evaluation of the technical bids increases the risk of the contract being wrongly awarded.
63. HC/PHAC have 2 forms, an Evaluation Directive and a Client Bid Receipt Form, which contain the necessary instructions of how the evaluation should be conducted. Neither of these forms, however, require the evaluators to confirm they are not in a conflict position. They do explain the need to keep bid information confidential, the steps necessary to properly evaluate the bids as well as what records are to be kept. These forms were provided in 17 of the 35 applicable files. The 5 files for which the contracts were awarded solely based on price did not require these additional forms given the simpler evaluation process. Overall, HC/PHAC cannot confirm that evaluators were not in a conflict position and, in 18 of those files, cannot demonstrate the technical evaluators were advised of how the evaluation process should be done, including maintaining the bid confidentiality.
64. While understanding the Values and Ethics Code for the Public Sector requires public servants to take all possible steps to avoid potential conflicts of interest between their official responsibilities and private affairs, it does not specifically mention conducting bid evaluations. Therefore OPO believes that Conflict of interest (COI) forms should be completed by all evaluators to further support the principles of fairness, openness and transparency.
65. OPO’s concern with files missing any of these documents is that, unlike CAs, technical evaluators’ jobs are typically not focussed on contracting. As the contracting process is a secondary duty, they must be (re-)acquainted with rules of procurement/bid evaluation each time they participate in these roles. CAs should always provide evaluators with the Evaluation Directive and a Client Bid Receipt Form, and add a requirement that all evaluators, including the CAs, certify they are not in a conflict position regarding any of the bids.
HC/PHAC should review its procurement policies, processes, guidelines, training and template library and update where appropriate to require contracting authorities to:
- provide all evaluators with evaluation instructions for solicitations prior to their obtaining bid documentation or participating in the evaluation process; and
- obtain signed conflict of interest and confidentiality declarations from all evaluators.
Conducting the evaluation and documenting the results
The majority of files contained either a signed consensus or signed individual evaluations, and HC/PHAC’s Evaluation Summary form was found on over half of the files. There were no formal evaluation results on file for 5 files and 11 files appeared to not be evaluated properly.
66. HC/PHAC’s Evaluation Summary form, which was found on 26 of 40 files, contains a synopsis of the solicitation process and evaluation results. For review purposes, this synopsis does not provide enough information to determine if HC/PHAC’s evaluation was conducted in accordance with the solicitation. For example, the entry for mandatory criteria was often “Met” or “Not met” and the entry for the rated criteria was the raw awarded score. These entries do not reference where in the proposal the evaluators found the information nor how they determined if the bidder met the mandatory criterion, or how the scoring was determined.
67. OPO therefore requires the consensus evaluation report, ideally signed, or failing that, at least all the signed individual evaluation results demonstrating how and where a bid passed or failed an evaluation criterion, to ensure the contract was awarded to a bidder who met all the mandatory technical requirements and whose point score exceeded the listed required minimum number of points. HC/PHAC’s Instructions to Evaluators form likewise requires signed copies of these evaluations. As there were some issues due to working from home or otherwise being unable to “sign” a document, it was considered “signed” if OPO staff were able to determine the results came from the appropriate evaluator, for example, an e-mail from a TA stating the attached document was their evaluation was counted as being “signed” by the TA for the purposes of this review.
68. There were signed consensus evaluation files in 31 files. For the remaining 9 files, 2 had signed individual evaluation forms. This left 7 files, including 1 file where OPO staff could not open the evaluation documents, where HC/PHAC could not produce either fully signed consensus or individual evaluation reports. Of these 7 files, 2 had Evaluation Summaries, leaving 5 without any type of evaluation result on file. However, as noted, the Evaluation Summary form on its own does not provide adequate proof of a robust evaluation.
69. For those which did have formal evaluation results, OPO notes the following instances where the solicitation evaluation instructions were not followed:
- In 2 cases, the financial evaluation was done improperly:
- In 1 file there was no selection methodology noted in the solicitation e-mail sent to suppliers. The e-mail stated “Please provide pricing for the monthly rental charges of two (2) Refrigerated Trailer Rentals. Costs should include delivery and pick up charges and any other costs associated” without specifying on what basis the contract would be awarded. The Evaluation Summary form on file stated the selection methodology was "lowest price per point". However, as there were no rated criteria, there were no points, so there was no way for HC/PHAC to determine a “cost per point.” It appears the basis of selection was actually "lowest priced responsive bid." The evaluation ranked the bidders by lowest price of the basic monthly rental fee, however the prices listed on the evaluation were not the full price of the bids. 1 bidder was listed as being $1700/month in the evaluation, but in their bid they quoted an additional $75 monthly environmental fee as well as other fees. A second bidder was listed as being $1650/month, but in their bid they quoted an additional $525/month “running charge” for a total of $2175/month. The successful bidder was listed as being $900/month in the evaluation, but in their bid they quoted an additional $104.50 hourly pickup and delivery charges in addition to other charges. The contract period was October 1, 2021 to June 30, 2022 (9 months) and the total cost (limitation of expenditure) was $35,520, meaning the contractual monthly cost equalled $3,946.67 or $1,973.34 per trailer; and
- In another solicitation bids had to be within -10% to +20% of the median bid price to be considered financially responsive. If an even number of bids was received, the RFP stated the median was to be determined based on the average cost of the two middle offers. There were 6 technically responsive bids; however, only the 3rd lowest price was used as the median, not an average of the 3rd and 4th (i.e., two middle) offers as stated in the solicitation. This meant the amount calculated as the median was incorrect. OPO notes this error did not affect the outcome of the evaluation.
- The technical evaluation did not reflect the contents of the solicitation in 5 files. Four examples of this issue are:
- In 1 file, for a Covid-19-related requirement to hire a contractor who could streamline production processes and present content in a dynamic and accessible e-learning package, the number of evaluated mandatory criteria was not clear. 2 of the 9 mandatory criteria (M6 and M7) were complimented with rated criteria (R1 and R2), i.e., the M criterion asked for examples of a certain number of courses the bidder had produced and then the R criterion awarded up to 40 points per criterion depending on how the proposed courses met the R criterion description. Bidders had to score 56/80 points. HC/PHACs evaluation summary identifies that all 3 received proposals met mandatory criteria M1-2-3-4-5-8-9. M6 and M7, however, were blacked out and there are no indications of if the bidders met M6 and M7 or if the assessment of those mandatory criteria was done after the rated scores were determined, i.e., the opposite way of a typical evaluation in which the mandatory criteria are evaluated first;
- In another file, the RFP was competed under the ProServices SA, i.e., it was sent to 2 bidders. Only 1 bid was received, there was no evaluation done and the CA subsequently requested sole-source authority on the basis of the requirement being a pressing emergency. The file does not explain why HC/PHAC did not record a technical evaluation or if there was any connection between the contracting authority’s request for a sole-source justification, which was completed after the $99,666 contract was already awarded to that sole bidder, and the absence of a technical evaluation;
- In 1 file for: (a) temporary warehouse space of up to 1000 standard pallet spaces, and (b) a “re-labeling process” for surgical masks, there were no stated mandatory or rated criteria and no basis of selection stated in the e-mail solicitation from HC/PHAC. The Evaluation Summary form showed that quotes received were assessed against three criteria, and included the notations “WH Space”, “Transportation fleet” and “Relabeling” or “No relabeling”, but exactly what was assessed is unknown; and
- In 1 file for human resource consultants, bidders were required, i.e., it was mandatory, to include certain information for references, including e-mail addresses. The only bidder did not do so, and should have been disqualified.
70. There was also 1 file for a senior-level business consultant where the technical evaluators did not determine the rated scoring in the manner described in the instructions in the Client Bid Receipt form. That form states evaluators are not to average their scores when determining the consensus score for each rated criterion. The evaluators are to discuss each individual score and come to a consensus agreement for each criterion. In this file, the consensus scoresheet lists the individual scores, which varied by criterion, with a overall average listed at the end, i.e., there was no consensus score per criterion. This is not a breach of the solicitation’s requirements and, unlike some of the items noted above, is not an indication the only bid was incorrectly assessed. It does, however, mean evaluators did not follow HC/PHAC’s internal instructions. More importantly, however, is that this was a file where there were conflicting instructions about how many points were needed; the RFP stated either: (a) 70 percent of the available points were needed; or, (b) bidders had to score 35/86 points. The winning bidder scored 58.5 points, which is only 68.02 percent, meaning it did not pass the 70 percent threshold and should not have been awarded the contract.
71. Ultimately there were 7 files for which OPO could not confirm HC/PHAC evaluated the proposals properly and 4 files where OPO confirmed HC/PHAC did not follow the solicitation’s evaluation plan. Solicitations include the evaluation criteria which guide suppliers in constructing their bids. There is an expectation on the part of bidders that the evaluation process will be conducted fairly and rigorously. While the ultimate affect of the lapses in these 11 files may not have caused a contract to be awarded to the wrong bidder, without the appropriate documentation, HC/PHAC cannot defend itself against allegations of improper evaluation. These types of deficiencies, if repeated consistently, will affect suppliers’ trust in the procurement system and could lead to fewer bids, and less competition, for future requirements.
72. File documentation was reviewed to determine whether a complete audit trail was retained to support consistent and transparent decision-making. As noted above, there were multiple files which did not do so, making it challenging for HC/PHAC to defend the awarding of those implicated contracts. Improper evaluations and lack of documentation call into question the integrity of the procurement process.
73. HC/PHAC must strengthen its documentation retention practices. OPO considers the lack of documentation on file to support decisions to be a concern, particularly with respect to decisions regarding contract award. For files with incomplete records, HC/PHAC cannot fully explain its business decisions or demonstrate that the procurements were conducted in a fair, open and transparent manner and that contracts were not awarded to non-compliant bidders. Keeping complete and detailed evaluation records is crucial for demonstrating: evaluation criteria have been applied consistently to all competing bids; that the procurement has been carried out in a manner consistent with HC/PHAC’s obligations; and that the contract was awarded in accordance with the procedures set out in the solicitation documents.
To support fair and transparent evaluation processes and file documentation practices, HC/PHAC should review its procurement policies, processes, guidelines, training, and template library and update where appropriate to:
- update its procurement guidance and training to ensure that a complete record and audit trail are kept on every procurement file, including the requirement that all evaluators be identified and provide signed evaluations demonstrating results;
- ensure monitoring processes are in place to identify and remediate documentation deficiencies.
74. OPO regularly hears from both Canadian businesses and federal officials who believe the contracting process is unnecessarily complex. In reviewing HC/PHAC’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.
75. OPO noted that solicitations, especially those for services, include a clause stating Canada may, but is not required to, check references. In 13 files, at least 1 mandatory criterion required bidders to provide reference information including the client organization, the contact name, the contract number and client e-mail address. As this forms part of a mandatory criterion, bidders were obligated to provide the information in the required format or risk their bids being deemed non-responsive. In 4 of these 10 files, references were also requested as part of point-rated criteria. In 3 files, the RFP language indicated that, while always reserving the right to do so, Canada would specifically document the responses and results of the Mandatory project references. The time and effort required by bidders to identify and vet reference information is significant and has the potential to result in bidders opting not to participate in competitive processes. When balanced against the fact that in the majority of cases reference information is never sought or utilized by the Department, it is suggested by OPO that reference information only be sought in exceptional circumstances and not considered a requirement in most solicitations. Departments should consider if there is a less intrusive manner to address the risk that has been identified.
Contract Request Form and Procurement Checklist
76. This form is implemented as a best practice tool to assist procurement and project authorities when issuing a contract. As such, it is required for all requirements regardless of their value. It is to be completed by both the requestor and the procurement officer to ensure all the requirements of the solicitation and the contract align. The form captures various details regarding a requirement such as the requestor information, the security requirement, the method of supply, the basis of selection, the vendor information, whether there were previous contracts with the supplier, the basis of payment, the evaluation criteria, Statement of Work, mandatory methods of supply, etc. When used, procurement officers request project authorities (i.e. requestors) to complete and submit the form before the requirement proceeds to the contracting stage. This practice promotes simplification by reducing the amount of back and forth between procurement and project authorities. It also supports effective record-keeping and facilitates management oversight by capturing key contractual details and decisions.
77. Based on OPO’s analysis of the 40 files, the Contract Request Form and Procurement Checklist were present in 39 of 40 files. In all 39 cases, the form had been filled in by the TA, but the CA had only filled in their part in 20 of those files. OPO noted the form was found on the file for which the TA did the bulk of the work without a CA. The form clearly requires CA input so, if the form was filled out before the solicitation process was undertaken, it is unclear how the TA could have done all that work without a CA. The form may also only have been filled out after the TA had done the solicitation. Whichever it was, in this case, the form did not fulfill its function.
V. Other observations
COVID-19 and Emergency contracting
78. On March 11, 2020, the World Health Organisation had declared COVID-19 a public health emergency. On March 23, 2020,Treasury Board issued a Contracting Policy Notice increasing the emergency contracting limit for HC/PHAC to $3 million to be in effect until March 31, 2021. This was subsequently extended and in December 2022 the $3 million emergency contracting for HC/PHAC were converted to an exceptional contracting limit for emergency contracts. Regardless, HC/PHAC are required to continue to follow applicable provisions of the Government Contracts Regulations, the TBCP, the DMP and the Proactive Disclosure of Contract reporting requirements, with respect to awarding contracts using emergency contracting, unless there are security issues which can affect the information to be published.
79. Contract amendments are used to formally delete, modify, or introduce new conditions to the original contract. CAs must consider the need for an amendment versus the need to issue a new contract; CAs should avoid:
- inadequate initial funding, resulting in an amendment to increase the contract value;
- inadequate pre-planning, resulting in an amendment to the design, specifications or quantity involved; and improper administrative procedures, necessitating an amendment to the specifications and delivery or other requirement in order to protect the contractor or government agency involved.
80. In 4 files the contract was either amended far beyond the original amounts noted in the solicitation or it was amended with there being no notice of any extension/amendment in the solicitation. In 1 example the contract, dated June 10, 2020, defined the contract period as a one-year contract period and “the period during which the Contract is extended, if Canada chooses to exercise any options set out in the Contract.” However, there were no option periods listed in the contract or the RFP, which had specifically advised the RFP would “…result in the award of 1 contract for 1 year.” Five months after the Contract had expired, on November 10, 2021, HC/PHAC issued a “contract amendment” that revised the contract end date to February 1, 2022. As a contract cannot be amended after it has expired, this equates to a new sole source contract. A partially completed sole source justification was found in the file indicating that the nature of the work is such that it would not be in the public interest to solicit bids “…because the original contract was awarded as the result of a competitive process and the amendment is only to add time, not additional funding”. The sole source justification form was not signed by director level or higher as is required.
81. There was 1 file for the printing of COVID-19 handouts and posters for use at Canadian airports, land borders and other ports of entry which was amended 10 times with a 6-fold increase in value, from $542,400 to $3,749,999.47. The contract allowed HC/PHAC to extend the contract for 4, 3-month option periods, but HC/PHAC added another 3 months on top of these extensions and, by HC/PHAC’s own calculations, they added an additional 74 percent of the contract value as an additional and unanticipated increase. HC/PHAC informed OPO it was determined that amending the existing contract was the best approach, given the urgency and unpredictability of the evolving and urgent situation.
82. While OPO understands the impact of COVID-19, in this case, HC/PHAC could have run another solicitation or, easier yet, amended the other contract awarded pursuant to the same solicitation. Issuing this extra amendment lacks transparency—as other suppliers, including the other contract-awardee, would not be privy to the work being given to the contract awardee. Had other suppliers been aware at the start of the ultimate contract amount they may have bid differently or some who did not bid may have bid.
83. Suppliers can only use the information in the solicitation to create and cost their proposals. If suppliers are denied that information, they either choose to not bid, or their bid will not be based on the full requirement, because they did not know what that requirement was. Departments, in turn, will not obtain the best value because they have misinformed industry about what is required.
84. HC/PHAC’s procurement practices pertaining to evaluation and selection plans, solicitation, and evaluation of bids and contract awards were assessed for consistency with Canada’s obligations under sections of applicable national and international trade agreements, the Financial Administration Act and regulations made under it, the TBCP as well as HC/PHAC’s departmental guidelines, to determine if they supported the principles of fairness, openness and transparency.
85. Regarding LOE 1, overall OPO concluded that evaluation criteria and selection plans were established in accordance with applicable laws, regulations and policies. In three-quarters of the files the mandatory criteria were clear, none were overly restrictive and only 1 file had mandatory criteria which did not appear to align with requirements of the solicitation. Similarly, point-rated criteria were not overly restrictive; however, issues were identified with scoring grids/criteria in 5 of 24 applicable files. Finally, for files which had the solicitation documents, in 5 files the selection methodology did not clearly communicate the manner in which the contract would be awarded. There were also 4 files which were missing the solicitation documents; therefore, OPO could not conduct a full review of these files related to this LOE.
86. Regarding LOE 2, OPO found that, with 7 exceptions, solicitations were open to an appropriate number of suppliers and, except for 3 files, open for an appropriate period of time. For all but 1 file for which solicitation documents were on file, they provided a clear description of the requirements and provided clear instructions for posing questions and submitting bids. Communications with suppliers during the solicitation period appeared to be appropriate and supportive of the preparation of responsive bids; however, documentation of communication was incomplete in 8 files. OPO also noted HC/PHAC did not advise the unsuccessful bidders, or the general population-at-large, of the results in 14 files.
87. Regarding LOE 3, OPO concluded HC/PHAC’s bid evaluation processes did not consistently ensure contracts were awarded in accordance with the solicitation. OPO found that evaluation instructions were only provided in 17 of the applicable 35 files and that there was no conflict of interest declarations for any files. In addition, 9 files were missing signed consensus scoring results and 5 files did not have any formal evaluation results. There were also 5 files in which the technical evaluation was not conducted as described in the solicitation, as well as 2 instances where the financial evaluation was not done as per the solicitation.
88. In order to address issues identified, OPO made 5 recommendations. These recommendations can be found in Annex I of this report.
VII. Organizational response
89. In accordance with section 5 of the Procurement Ombudsman Regulations, the Procurement Ombudsman provided HC/PHAC with the opportunity to comment on the review’s findings and proposed recommendations.
90. All of the files that formed part of this review covered a time of immense challenge. HC/PHAC were faced with a need for urgent and more rapid procurements to address the unprecedented public health response to the COVID-19 outbreak, all while pivoting to remote work. HC/PHAC are pleased to have been able to continue to deliver on our critical mandates within this extraordinary context and recognizes the need for procurement practices to remain resilient in the face of adversity.
91. HC/PHAC support the recommendations contained in this report. Rigorous and well-documented procurement practices are a key factor in delivering on the HC/PHAC mandates in a fair, open, and transparent manner. These recommendations will be addressed in accordance with the action plan provided in this report with some of this work already underway.
92. HC/PHAC thanks OPO and the review team for their thoroughness, the professionalism extended during the review period, and the valuable feedback.
93. OPO wishes to express its appreciation to the staff of HC/PHAC’s Procurement Services division for the assistance and cooperation extended to the reviewers during this assessment.
Annex I—Organizational response and action plan
Procurement Practice Review of Evaluation and Selection Plans, Solicitation, and Evaluation of Bids and Contract Award at Health Canada/Public Health Agency of Canada.
|No.||Recommendation||HC/PHAC response / Action plan||Timeline for Implementation|
|1||HC/PHAC should review its policies, processes, guidelines, training materials and template library and update where appropriate to strengthen guidance to support the development and use of:
|2||HC/PHAC should review its procurement policies, processes, guidelines, training and template library and update where appropriate to describe and delineate the roles and responsibilities of the contracting and technical authorities to ensure solicitation processes are conducted in accordance with the relevant governing policies.||
|3||To support open and transparent procurement practices, HC/PHAC should review its policies, processes, guidelines, training, and template library and update where appropriate to assist in ensuring that:
|4||HC/PHAC should review its procurement policies, processes, guidelines, training and template library and update where appropriate to require contracting authorities to:
|5||To support fair and transparent evaluation processes and file documentation practices, HC/PHAC should review its procurement policies, processes, guidelines, training, and template library and update where appropriate to:
- Date modified: