Review of Complaints: Administration of Contracts for Interpretation Services

December 2024

Summary

On this page

The complaints

1. Between June 25 and July 11, 2024, the Office of the Procurement Ombud (OPO) received written complaints from 40 Canadian Suppliers (the Complainants) regarding the administration of 40 separate contracts awarded by the Department of Public Services and Procurement Canada (PSPC), specifically the Acquisitions Branch as the contracting office, on behalf of the Translation Bureau, as the project office (a separate group within PSPC). The contracts were for the provision of “Parliamentary and Conference Interpretation Services.” Three Complainants subsequently withdrew their written complaints, and therefore this report focusses on the 37 remaining written complaints.

2. Each of the 37 contracts were individually awarded to the Complainants between September 21 and 25, 2023 as a result of PSPC’s Request For Proposal (RFP) #EN960-231030/B, and the contract values ranged from $11,300.00 to $452,000.00 (taxes included).

3. The complaints were raised concerning a contract amendment proposed by PSPC. The amendment had two changes: first, to exercise the contract’s option year, and second, to introduce changes to Annex A, Article 5.3 of the contract regarding recognition of certain hours as non-interpreting time. Suppliers were asked to sign the amendment which included both changes. The proposed amendment would apply to all contracts awarded under the RFP.

4. Regarding the 37 contracts in question, the Complaints raised the following issues with regard to the administrative practices of PSPC:

5. Between June 26 and July 11, 2024, OPO confirmed the complaints met the requirements of the Procurement Ombudsman Regulations (the Regulations), and all 37 complaints were considered filed. As all 37 complaints raised the same key issues, this report amalgamates OPO’s analysis and findings regarding these common issues into one report.

Mandate

6. This review of complaint was conducted under the authority of paragraph 22.1(3)(c) of the Department of Public Works and Government Services Act and sections 15 to 22 inclusive of the Regulations.

7. Pursuant to subsection 18(2) of the Regulations, the Procurement Ombud requested the Complainants and PSPC provide all documents and information necessary for the review. PSPC was also asked to provide a written response to the issues identified in the complaints.

8. The documents and information were necessary to conduct the review in accordance with Section 20 of the Regulations, which specifies that the Procurement Ombud shall take into consideration, for the purpose of the review, any relevant factors, including the following:

9. In addition, Section 21 of the Regulations specifies the Procurement Ombud may not make recommendations:

10. PSPC provided OPO with a response to the issues highlighted in the complaints, as well as supporting documents. In addition to the complaints, the Complainants provided OPO with documents and written communications exchanged between the Complainants and PSPC associated with the administration of the contract.

Background

11. Between September 21 and 25, 2023, PSPC awarded 102 individual contracts, including the 37 contracts awarded to the Complainants, as a result of Request for Proposal #EN960-231030/B. The initial contract period for all contracts was set to expire on June 30, 2024 unless the PSPC Contracting Authority exercised the option year in the contract to extend the period to June 30, 2025.

12. PSPC, the Translation Bureau and the Suppliers refer to these contracts as “open contracts” in order to distinguish them from other contracts the Suppliers hold. The contracts are for the provision of interpretation services on an “as and when requested” basis through the issuance of individual Task Authorizations, which are non-binding orders.

13. The PSPC Contracting Authority is the named individual identified in all 37 contracts responsible for the administration of those contracts. Any changes to the contract must be authorized in writing by the Contracting Authority. The Contractor (i.e. Supplier) must not perform work in excess of, or outside the scope of the contract based on verbal or written requests or instructions from anybody other than the Contracting Authority.

14. Officials from the Translation Bureau are named individuals identified as the Project Authority in all 37 contracts. These officials are responsible for all matters concerning the technical content of the Work under the contract. The Project Authority cannot authorize contract changes, or changes to the scope of the Work. Such changes can only be made through a contract amendment issued by the Contracting Authority.

Chronology of Events

15. The chronology of events and findings in this report are based on the records provided to OPO by PSPC and the Complainants. The failure by either PSPC or the Complainants to disclose any relevant records or information could impact the findings of this report.

16. On May 27, 2024, the Translation Bureau emailed the Suppliers advising that PSPC would be sending an email regarding the option year of their contracts, and also advised that the Translation Bureau wanted to amend the contracts to clarify Annex A, Article 5.3, “Non-Interpreting working hours and grace period.” The proposed change to Annex A, Article 5.3 was attached to the email.

17. On May 28, 2024, PSPC emailed the Suppliers a written notice to confirm that “Canada will proceed with the option year of your contract.” In the email, PSPC also advised that new changes will be added to Annex A, Article 5.3 of the contract, and that an amendment for the Suppliers to sign would be sent within the next few days.

18. On June 5, 2024, the Translation Bureau emailed the Suppliers, stating that “on the advise [sic] of [PSPC], I am sending you a change to the amendment that I sent last week,” and that PSPC would be sending documentation for signature shortly. Attached to the email was a new version of Annex A, Article 5.3, which differed from the version that the Translation Bureau had sent on May 27, 2024.

19. On June 11, 2024, PSPC sent an email to the Suppliers marked “URGENT SIGNATURE REQUIRED.” The email contained the draft amendment and requested signature by June 13, 2024. Among other administrative changes, the amendment contained language to exercise the option year of the contract extending it to June 30, 2025, as well as changes to Annex A, Article 5.3, “Non-Interpreting working hours and grace period.” The changes to Annex A, Article 5.3 corresponded to the version sent by the Translation Bureau on June 5, 2024.

20. Between June 11 and 18, 2024, several Suppliers informed PSPC that they disagreed with the changes and refused to sign the amendment. For example, one Supplier questioned the amendment’s legality and validity, indicating that “your [PSPC’s] amendments violate clause 4.2 of our contract, which stipulates that any option year shall be exercised “under the same conditions.”

21. On June 17 and 18, 2024, PSPC emailed Suppliers who raised concerns about the draft amendment, indicating that consultation was not possible due to the upcoming contract period expiry on June 30, 2024. In the email, PSPC also stated that they included the changes to Annex A, Article 5.3 with the option year amendment to avoid launching a new solicitation process during the summer months. PSPC advised that Suppliers must sign the draft amendment by June 20, 2024, otherwise their contracts would expire on June 30, 2024.

22. On June 21, 2024, PSPC emailed Suppliers acknowledging the confusion concerning the draft amendment and offered clarification by laying out two scenarios to explain the changes to Annex A, Article 5.3 of the contract. PSPC also stated that the amendment wasn’t intended to change anything in regard to non-interpretation time, and that it was required in order “to ensure good financial stewardship for the Government of Canada.” In the email, PSPC repeatedly stated that there was no “ulterior motive” or “hidden agenda” behind the amendment. PSPC also stated that the amendment must be signed and received by end of day June 29, 2024, otherwise the Suppliers’ contracts would expire.

23. Between June 25 and July 11, 2024, OPO received 40 written complaints from Suppliers related to the Parliamentary and Conference Interpretation Services contracts.

24. On June 28, 2024, the Translation Bureau emailed the Suppliers to provide additional explanation, as well as examples detailing how the proposed draft changes to Annex A, Article 5.3 of the contract should be interpreted in calculating work time to be billed. The Translation Bureau further mentioned that “The deadline to sign the option year of your open contract is Sunday June 30, 2024 at 11:59pm.”

25. On July 23, 2024, PSPC emailed the Suppliers acknowledging that “some communications from PSPC subsequent to the 28 May, 2024 email may have included some contradictory information.” PSPC indicated that they considered the option period of the contract to have been exercised by the email they sent on May 28, 2024. The July 23 email also provided the Suppliers with three options: declining the option year (thereby ending their contract); maintaining the option year extension with the new terms (if Suppliers had signed the previous draft amendment); or, maintaining the option year with the original contract terms.

26. Between July 26 and August 2, 2024, three Complainants withdrew their complaints with OPO.

27. On August 23, 2024, OPO received PSPC’s departmental response to the 37 complaints. PSPC advised that 36 of the 37 Complainants signed the amendment exercising the option year and that, as of that date, one of the Complainants had not responded to PSPC.

Analysis of Issues and Findings

Issue 1: Did PSPC exercise the option to extend the contract in accordance with Article 4.2 “Option to Extend the Contract” of the contract?

28. In their complaints, the Complainants stated that based on PSPC’s emails, it was unclear whether the option year was successfully exercised on May 28, 2024 (when written notice was received), or whether the option would only be exercised by signature of both parties on the draft amendment sent on June 11, 2024. Additionally, the Complainants stated that PSPC’s incorporation of changes into the administrative amendment to acknowledge the option year extension caused confusion.

29. One Complainant stated:

“I was notified my contract would be extended on May 28th. No changes can be made to the contract within 30 days of the renewal date.”

30. Another Complainant stated:

“On May 28th 2024, PSPC …announced that they were exercising the Option Year of the Open Interpretation Contract…which they are entitled to do without modification.”

31. These issues were reflected in the Complainants’ 37 complaints.

32. The Department’s responses to OPO stated:

“On May 28, 2024, PSPC advised suppliers that it would be exercising the option year and amending Annex A, paragraph 5.3 of the contract, ‘Non-interpreting working hours and grace period.’ The intention was that the exercising of the option year was conditional on suppliers also accepting the amendment to paragraph 5.3… A supplier that did not agree to that change to paragraph 5.3 could have simply refused the amendment, including the option year. However, upon review of the complaints, PSPC acknowledges that the communications regarding the amendment may not have been fully clear. Under the contract, PSPC has rights to exercise the option year under the same terms and conditions of the contract, and therefore combining a change in terms along with exercising the option may have caused some confusion…Nevertheless, in light of potential confusion in earlier communications, and given the criticality of securing sufficient interpretation services, PSPC ultimately proceeded with exercising the option period without the intended change to paragraph 5.3, while providing flexibility to suppliers in both regards.”

33. Article 4.2 Option to Extend the Contract of the contract states:

“The Contractor grants to Canada the irrevocable option to extend the term of the Contract by up to one additional 1 year period under the same conditions… Canada may exercise this option at any time by sending a written notice to the Contractor at least 30 calendar days before the expiry date of the Contract. The option may only be exercised by the Contracting Authority, and will be evidenced for administrative purposes only, through a contract amendment.”

34. The “Notice” clause of Standard Acquisition Clauses and Conditions Manual General Conditions 2035 (2022-12-01), which was incorporated by reference in all 37 contracts, specifies that “Any notice under the Contract must be in writing and may be delivered by hand, courier, mail, facsimile or other electronic method that provides a paper record of the text of the notice. It must be sent to the Party for whom it is intended at the address stated in the Contract. Any notice will be effective on the day it is received at that address.”

35. On May 28, 2024, the PSPC Contracting Authority sent an email to Suppliers, stating “As per Article 4.2 of your contract, [the PSPC Contracting Authority] would like to advise you that Canada will proceed with the option year of your contract…You will therefore receive a contract amendment for your signature within the next few days.”

Analysis of Issue 1

36. Article 4.2 Option to Extend the Contract contains instructions for issuing a contract amendment to acknowledge the option extension in the contract: “The option may only be exercised by the Contracting Authority, and will be evidenced for administrative purposes only, through a contract amendment.” (emphasis added). The Contracting Authority needs only follow-up the written notice with a contract amendment to acknowledge the option extension for administrative purposes. In other words, the option is exercised at the moment when the email (the appropriate written notice) was received by the Supplier, not at the moment that the administrative amendment is signed by both parties.

37. The “Notice” clause of the contract’s General Conditions 2035 (2022-12-01) sets out conditions that must be met for a communication to constitute “Notice”: (1) the notice must be in writing; (2) the notice must be sent to the named party at the email address in the contract; and (3) the notice must be sent by the Contracting Authority identified in the contract. Additionally, the “Notice” clause states that the notice may be delivered by several methods including an electronic method (in this case, an email). PSPC’s May 28, 2024 email was in writing, was sent to the Suppliers at the email addresses identified in their contracts, and was sent by the Contracting Authority identified in their contracts. Additionally, the email was sent to the Suppliers more than 30 days prior to expiry of the term as required by Article 4.2 of their contracts. Therefore, PSPC effectively provided the necessary written notice to Suppliers of the extension via the May 28, 2024 email.

38. In order to conclude that the written notice was effective, it must have been successfully received by the intended recipients (in this case, the Suppliers). PSPC did not request a confirmation of receipt of the notice from the Suppliers. However, the Complainants responded to PSPC’s May 28, 2024 email, and made reference to that email in their written complaints, which evidences that the written notice was successfully received by the intended recipients.

39. On June 11, 2024, the PSPC Contracting Authority sent a follow-up email to include the revised draft contract amendment for the Suppliers to sign. The amendment included the option year extension language, basic administrative changes (such as updating contact information for Project Authorities), and also included new changes to the text of Article 5.3 Non-Interpreting Hours and Grace Period in Annex “A”, Statement of Work.

40. Article 4.2 Option to Extend the Contract, also indicates that any extension of the contract term is to be done “under the same conditions.” Therefore, attempting to make the exercising of an option year “conditional” upon a Contractor accepting changes to the terms and conditions, is inconsistent with the language of Article 4.2.

41. On July 23, 2024, following OPO’s launch of reviews into the 37 complaints, PSPC emailed Suppliers to advise that “PSPC considers that the option period per Article 4.2 of your contract was exercised by our email sent to all suppliers on May 28, 2024. As such, we consider that all contracts currently remain active.” PSPC’s email reaffirmed to Suppliers after the fact that the written notice sent on May 28 did indeed effectively exercise the option year.

Finding—Issue 1

42. In accordance with Article 4.2 Option to Extend the Contract, PSPC exercised the option year for each of the 37 contracts by sending the Complainants notice on May 28, 2024 which was received on the same day.

43. PSPC sent the notice more than 30 calendar days prior to the contract expiry date of June 30, 2024. In addition, PSPC’s email to Suppliers was sent by the Contracting Authority, who is authorized to exercise the option year as per Article 4.2 of the contract. Therefore, the contract option year was successfully exercised by PSPC on May 28, 2024.

44. Although OPO found that PSPC exercised the option year in accordance with Article 4.2 of the Contract, the language of the clause should have been clearer to avoid ambiguity regarding the purpose and timing of the amendment.

45. Given this lack of clarity, OPO recommends that PSPC undertake a review of Article 4.2, “Option to Extend the Contract” as used in their standard templates, in order to clarify precisely how an option period is to be exercised, including the process and the responsibilities of the parties.

Issue 2: Would the amendment proposed by PSPC have resulted in a substantive change to the terms and conditions of the contract?

46. In their complaints, the Complainants stated that the language of the draft amendment sent on June 11, 2024 would have constituted a substantive change to Annex A, Article 5.3 as it changed the way in which the Complainants invoice for hours worked, and introduced a new and cumbersome timekeeping methodology.

47. One Complainant stated:

Translation: “I am absolutely not prepared to show up to work with a stopwatch in hand for a job that, in principle, is billed by the day, not by the hour and even less by the minute. What is particularly shocking is the proposal to stop the clock for each suspension during the meeting. A meeting interrupted by numerous suspensions is often more stormy, more aggressive, and therefore more stressful for the interpreters. When the chair suspends the meeting, he does not announce a ‘15-minute break’ during which we are free to go get a coffee, he announces a suspension for an indefinite period. These suspensions are often used to negotiate a new text of an amendment to a motion, for example. It is unlikely that we would have this text before it is read at full speed. We therefore spend our time trying to anticipate the upcoming amendment.”

48. Another Complainant stated:

“We…had agreed to [a] slight modification but they [PSPC and the Translation Bureau] then pulled a bait and switch by announcing a very different modification on June 5th…[PSPC] ignored the key issue of introducing stop-watch interpreting.”

49. These issues were reflected in the Complainants’ 37 complaints.

50. The Department’s responses to OPO stated:

“PSPC is of the view that the proposed change to paragraph 5.3 was reasonable, and also necessary to ensure that these contracts provide value for money. PSPC and the Translation Bureau had also consulted heavily with an informal working group composed of representatives from the industry regarding the proposed change, but recognizes that this consultation does not replace the requirement for individual suppliers to review and respond to any proposed amendment.”

51. The “Amendment and Waivers” clause of the Standard Acquisition Clauses and Conditions Manual General Conditions 2035 (2022-12-01), which was incorporated by reference in all 37 contracts, specifies that “to be effective, any amendment to the Contract must be done in writing by the Contracting Authority and the authorized representative of the Contractor.”

52. Article 4.2 Option to Extend the Contract of the contract states:

“The Contractor grants to Canada the irrevocable option to extend the term of the Contract by up to one additional 1 year period under the same conditions…Canada may exercise this option at any time by sending a written notice to the Contractor at least 30 calendar days before the expiry date of the Contract. The option may only be exercised by the Contracting Authority, and will be evidenced for administrative purposes only, through a contract amendment.” (emphasis added)

Analysis of Issue 2

53. On May 27, 2024, the Translation Bureau sent Suppliers an advance copy of the proposed revisions to Annex A, Article 5.3. In OPO’s review of the complaints, the Complainants did not express any concern with this initial version of the text. Several Complainants noted in their written complaints that they had agreed to this May 27, 2024 modification. In their May 28, 2024 email, which provided written notice for the exercising of the option year, PSPC made reference to the May 27, 2024 version of the revisions sent by the Translation Bureau. However, on June 5, 2024, the Translation Bureau, “on the advice of [PSPC],” sent all Suppliers a revised version of the text, which is where the changes in question were first introduced, and then carried forward into the June 11, 2024 version sent by PSPC.

54. Annex A, Article 5.3 of the original contract included the following text regarding non-interpretation hours:

“Non-interpretation time includes sound testing and time without interpretation for sound testing and/or waiting time without interpretation, in cases where committees start late for technical or obstruction reasons, after which the contractor is entitled to invoice for an extension of the work.”

55. In the original contract, “non-interpretation time” covers only the time where committees start late for technical or obstruction reasons.

56. On May 27, 2024, the Translation Bureau sent the Suppliers a copy of the proposed revisions to Annex A, Article 5.3, which included the following text regarding non-interpretation time:

“Non-interpreting time includes sound testing and/or waiting time without interpretation, in cases where committees start late for technical or obstruction reasons, after which the contractor is entitled to invoice for an extension of the work in accordance with article 5.3.3 below.”

57. As with the original contract, the May 27, 2024 version of Annex A, Article 5.3 specifies that “non-interpreting time” covers only the time where committees start late for technical or obstruction reasons.

58. On June 5, 2024, the Translation Bureau sent the Suppliers a revised version of the text of Annex A, Article 5.3, to which the Complainants subsequently objected. These revisions were then incorporated into the draft amendment that PSPC sent to the Suppliers on June 11, 2024. The following is an excerpt of the modified text regarding non-interpretation time:

“Non-interpreting time includes but is not limited to sound testing and/or waiting time without interpretation due to delays or suspensions, in cases where committees start late for technical or obstruction reasons, after which the contractor is entitled to invoice for an extension of the work in accordance with article 5.3.3 below.” (emphasis added)

59. To break this down, the June 5, 2024 version of Annex A, Article 5.3 makes three changes to the language of the original contract, as outlined below.

60. First, the words “but is not limited to” were inserted after “non-interpreting time includes”. The phrase “non-interpreting time includes” implies that the list of inclusions is not exhaustive. Adding the words “but is not limited to” after “non-interpreting time includes” makes explicit what was already implicit – that the list which follows is not exhaustive. This is not a substantive change to the text.

61. Second, the word “/or” was inserted after the first item on the list of inclusions (“sound testing and”). Inserting the word “/or” after the first item (“sound testing and”) clarifies that both the time spent sound testing and the time without interpretation are considered as “non-interpreting time”. This is not a substantive change to the text.

62. Third, the words “for sound testing and/or waiting time without interpretation” were deleted and replaced with the words “due to delay or suspension” to qualify “time without interpretation”. This is a substantive change, as it changes “waiting” to “delay or suspension”. It expands the definition of non-interpreting time to include waiting time “due to delays or suspensions”.

63. The language of the draft amendment sent on June 5, 2024 and June 11, 2024 changed the way in which Complainants invoice for hours worked, and introduced a new timekeeping methodology. By expanding the definition of non-interpreting time to include waiting time “due to delays or suspensions,” the Complainants would now need to track the start and end time of every suspension throughout the course of a committee meeting. The impact of this substantive change to the terms and conditions of the contract would be that the Suppliers’ billable time would be reduced, resulting in less pay for the same hours worked. Such an amendment would be substantive and not administrative because it would reduce the number of hours for which the Complainants could invoice and subsequently reduce their pay.

64. On June 21, 2024, PSPC sent an email to Suppliers entitled “Clarification on contract amendment,” to “provide some context on the option contract year and the included amendment, since it resulted in confusion. Its purpose is not to change in practice anything in regards [sic] to non-interpretation time.” The email provides two scenarios to explain billable time and invoicing based on the changes. However, multiple Complainants highlighted errors in PSPC’s scenario calculations, which incited further confusion.

65. In the first scenario outlined in PSPC's June 21, 2024, email, PSPC states that interpreters should include one hour of sound testing in their billing for interpretation time. This is incorrect as the version of Annex A, Article 5.3 contained in the draft amendment states that “non-interpreting time includes, but is not limited to, sound testing.”

66. In the second scenario outlined in PSPC's June 21, 2024, email, PSPC calculated a 15-minute suspension as non-interpretation time twice, leading to an incorrect total number of billable hours.

67. The second scenario also illustrates how the proposed changes to Annex A, Article 5.3 would impact the interpreting hours that Suppliers were eligible to bill under their contracts. According to Annex A, Article 5.3 in the original contract (as well as the version sent by the Translation Bureau on May 27, 2024), the Suppliers would be eligible to bill for 2 hours, 10 minutes of interpretation time (2 hours of committee interpretation, plus 10 of the 30 minutes of overrun time – the other 20 minutes would be covered by a “grace period” stipulated in the contract). However, according to the version of Annex A, Article 5.3 contained in the June 5 and June 11, 2024 draft amendment, the Suppliers would only be eligible to bill for 1 hour, 55 minutes of interpretation time (1 hour, 45 minutes of committee interpretation, plus 10 of the 30 minutes of overrun time – the other 20 minutes would be covered by the aforementioned “grace period”). The Suppliers would no longer be eligible to bill for the 15-minute suspension, therefore the result would be 15 minutes less billable time for the same amount of work.

Finding—Issue 2

68. In OPO’s review of PSPC’s June 11, 2024 proposed amendment, the changes to Annex A, Article 5.3 expanded the definition of “non-interpreting time,” and were found to be substantive in nature because they ultimately reduced the hours that Suppliers were entitled to invoice, thereby reducing the amount they were eligible to be paid under their contracts for the same amount of work. These changes would have two major impacts on the conduct of work under the contract. First, a new burdensome timekeeping methodology would increase the Suppliers’ level of effort to track, report and submit invoices for payment. Second, the expanded definition of “non-interpreting time” would reduce the number of interpreting hours that Suppliers were entitled to invoice and be paid for. Both of these changes would have increased the Suppliers’ administrative burden while reducing potential payment available for the increased level of effort.

69. Therefore, OPO’s finding is that the proposed amendment would have resulted in a substantive change to the terms and conditions of the contract. The “Amendments and Waivers” paragraph of General Conditions 2035 (2022-12-01) indicates that amendments must be done in writing by both parties to the contract, rather than unilaterally in conjunction with an extension to the duration of the contract. As such, proposed substantive changes to the terms and conditions of a contract should allow for due consideration of potential impacts, as well as any negotiation required, by both the Contracting Authority and the Supplier.

Issue 3: Were PSPC’s actions during the negotiation of the amendment reasonable in the circumstances? Did PSPC’s actions constitute bad faith?

70. Within the 37 written complaints, the Complainants described PSPC’s actions during the negotiation of the amendment as intimidating, coercive and confusing.

71. One Complainant stated:

“Procurement and the Translation Bureau also tried, twice, to obfuscate by sending emails falsely claiming that we had misunderstood, and that the amendment was not a substantive change at all…In fact, the whole process has been one of intimidation, coercion and obfuscation.”

72. Another Complainant stated:

“Procurement Branch (PB) [PSPC (Procurement Branch)] and Translation Bureau (TB) [Translation Bureau] tried to intimidate the interpreters by giving an arbitrary and a very tight deadline twice (June 11, June 13 unsigned email, June 17th, June 20th). They refused to answer many of my colleagues [sic] questions…They also tried to gaslight us by sending emails falsely claiming that WE had misunderstood everything and that nothing was in fact changed.”

73. In PSPC’s written response to OPO on August 23, 2024, the Department acknowledged that communications with suppliers concerning the proposed amendment could have been more clear and more time could have been provided for review. However, up until July 23, 2024 (when PSPC sent their proposed resolution email), PSPC maintained that exercising the option year was only available to suppliers who also accepted the new terms:

“Upon review of the complaints, PSPC acknowledges that the communications regarding the amendment may not have been fully clear. Under the contract, PSPC has rights to exercise the option year under the same terms and conditions of the contract, and therefore combining a change in terms along with exercising the option may have caused some confusion. PSPC could have explained more clearly in its communications to suppliers that the exercising of the option year was conditional on the supplier’s acceptance of a change to paragraph 5.3, and that suppliers could refuse the option period. PSPC also acknowledges that the two-day response time was excessively short. The process should have been initiated earlier to allow for both a reasonable response time for suppliers and sufficient time for administration prior to the contract expiration date.”

74. For the purposes of this review, the Procurement Ombudsman Regulations state that the Procurement Ombud shall take into consideration any relevant factors, including the following:

  1. whether the administration of the relevant contract was conducted in a reasonable manner in the circumstances; and
  2. whether any of the parties acted in bad faith.

75. Section 3.2 of the Directive on the Management of Procurement (DMP) states:

3.2 The expected results of this directive are as follows:

…

3.2.4 Opportunities for collaboration are considered in procurement decisions;

…

3.2.6 Actions related to the management of the procurement are fair, open and transparent, and meet public expectations in matters of prudence and probity.

76. Additionally, Section 4.3 of the DMP states:

4.3 Contracting authorities are responsible for the following:

4.3.1 Conducting procurements on behalf of the department or agency, and establishing contracts and contractual arrangements based on sound procurement principles, including fairness, openness and transparency to obtain best value.

77. The principle of “bad faith” is defined in the Canadian Oxford Dictionary as an “intent to deceive.” (emphasis added) The Dictionary of Canadian Law similarly states “to constitute bad faith the actions must be knowingly or intentionally wrong. R. v. Smith, 2005 BCCA 334.” (emphasis added) Therefore, in order to determine whether a party’s actions constitute bad faith, an examination of the underlying intent of the party’s actions must be considered. A conclusion on bad faith cannot be drawn without a clear understanding of the intent of the actions and the circumstances surrounding them.

Analysis – Issue 3

78. PSPC and the Translation Bureau sent the following emails to suppliers between May 28, 2024 and July 23, 2024:

79. On May 28, 2024, PSPC emailed Suppliers advising that “Canada will proceed with the option year of your contract.” PSPC also stated that Annex A, Article 5.3 Non-interpreting working hours and grace period of the contract will be amended according to the May 27, 2024 email sent by the Translation Bureau. Lastly, in the email, PSPC mentioned “you will therefore receive a contract amendment for your signature in the next few days.”

  1. In Issue 1 above, OPO found that PSPC’s email of May 28, 2024 effectively exercised the option year on all supplier contracts since it met the conditions that constitute “written notice” as per the contract terms.
  2. As per Article 4.2 of the contract, PSPC was required to exercise the option year 30 days in advance of the contract expiry date (June 30, 2024). PSPC sent the notice to exercise the option year on May 28, 2024. This suggests that PSPC was aware that they had sent the notice in accordance with the contract terms, and that by doing so, they were exercising the option year.

80. On June 5, 2024, the Translation Bureau emailed Suppliers specifying that “on the advice of [PSPC], I am sending you a change to the amendment that I sent last week,” while also sharing new revisions to Annex A, Article 5.3 of the contract. The Translation Bureau Project Authority further indicated that “[The PSPC Contracting Authority] will send you the documentation for signature shortly.”

  1. As explored in Issue 2 above, the version of Annex A, Article 5.3 sent on June 5, 2024 differed substantively from the version sent on May 27, 2024, in that these changes would have increased the Suppliers’ level of effort while reducing the potential number of billable hours and associated payment.

81. On June 11, 2024, PSPC sent a follow-up email to Suppliers requesting urgent signature of the revised draft contract amendment by June 13, 2024 (within 2 days). Attached to the email was a copy of the draft amendment, which included text to exercise the option year of the contract as well as modifications to the language of Annex A, Article 5.3 of the contract.

  1. Article 4.2 of the contract indicates that the option year is to be extended “under the same conditions.” PSPC’s actions of proposing an amendment to exercise the option year while simultaneously changing the terms of the contract violate Article 4.2. Article 4.2 also states the purpose of the contract amendment is to “evidence” the option year “for administrative purposes only,” which would indicate it is not intended as an opportunity to revisit the contract’s terms and conditions.
  2. PSPC did not offer an explanation for the urgent, 2-day turnaround time, nor did they indicate whether there were consequences if Suppliers did not sign the amendment by the June 13, 2024 deadline.
  3. Between June 11, 2024 and June 18, 2024, several Suppliers responded to PSPC raising concerns with the new changes to Annex A, Article 5.3 included in the draft amendment. Some Suppliers rejected the amendment outright, stating their understanding that the option year was already exercised as per PSPC’s previous May 28, 2024 email with the same contract terms and conditions.

82. On June 17, 2024, PSPC responded to those Suppliers who raised concerns about the draft amendment indicating that “We have received your concerns regarding the amendment to exercise the option year, which involves changes to the non-interpreting working hours clause, more specifically, to waiting time without interpretation due to delays or suspensions. There was no consultation on this particular item, for lack of time, as the original contract period expires on June 30, 2024…We decided to send the amendment at the time of signing the option year, rather than launch a new call for tenders during the summer period. Under the terms of the contract, Canada has the right to amend the original contract to add new conditions in response to unforeseen circumstances….we understand that the approval of both parties to the contract is required…if you decide to accept this new condition, please sign the contract option year no later than Thursday, June 20, 2024. Otherwise, your contract will expire on June 30.” (emphasis added)

  1. Based on documentation provided to OPO, this email was the first time PSPC informed Suppliers (only those raising complaints with the draft amendment), that if they did not sign the amendment by a certain deadline, their contracts would expire on June 30, 2024. Given PSPC’s prior notice exercising the option year sent on May 28, 2024, PSPC’s actions could be perceived as a negotiation tactic to persuade Suppliers to either accept the revisions to Annex A, Article 5.3 or lose the option year of their contracts. This email wrongly led Suppliers to believe the option year was not yet exercised, when in reality it had been.
  2. This action therefore raises questions of fairness and transparency, as PSPC gave Suppliers an unnecessary ultimatum since the contracts were already extended.
  3. PSPC’s statement that “we decided to send the amendment at the same time of signing the option year, rather than launch a new call for tenders during the summer period,” indicates that PSPC understood that the proposed changes to Annex A, Article 5.3 were substantive. Substantive changes would either need to be negotiated and agreed to by both parties to the existing contract and reflected in an amendment, or Canada would be required to initiate a new tender process to incorporate the new changes and allow necessary contemplation by bidders in their proposals. Of particular note, PSPC stated that they contemplated issuing a new solicitation process to include these changes for these services. A new solicitation would have provided an opportunity for bidders to consider all elements of the requirement, including the new timekeeping methodology and any pricing or other impacts when submitting their proposals. PSPC’s admission that a new solicitation process was considered signals that they understood the need to allow Suppliers time to assess the changes and that it was a necessary step.
  4. Between June 11, 2024 and June 18, 2024, numerous Suppliers, including many of the Complainants, raised concerns with the new changes proposed in the June 11 amendment.
  5. In accordance with the previously mentioned DMP sections 3.2.4, 3.2.6, and 4.3.1, which reference collaboration, fairness, openness, and transparency, departments are expected to manage contracts in a way that is both fair to and collaborative with suppliers. PSPC’s decision to initiate substantive changes to the contract on a very short timeline undermined the Suppliers’ ability to properly consider those changes. This decision goes against the principles of fairness and collaboration in the DMP, and therefore was unreasonable.

83. On June 21, 2024, PSPC emailed Suppliers acknowledging the confusion concerning the draft amendment and offered clarification by laying out two scenarios to explain the changes to Annex A, Article 5.3 of the contract. PSPC also stated of the amendment: “Its purpose is not to change in practice anything in regards [sic] to non-interpretation time. One contractor’s interpretation of the clause led us to realize there was an ambiguity, or loophole in the wording of this provision…There is no hidden agenda.” PSPC further stated that the change is needed “to ensure good financial stewardship for the Government of Canada,” and “we trust you find this informative and it reassures you that there is no ulterior motive behind the contract amendment.” Finally, PSPC writes, “Please be aware that your contract expires on June 30, therefore it is imperative that your amendment be signed and received by (PSPC) before 23:59 Eastern Standard Time (EST) on June 29. Should your contract expire, you will not be given work under the open contract.”

  1. This email extends the deadline for signature of the draft amendment to June 29, 2024, giving Suppliers 9 additional days to review the draft. Otherwise, PSPC advises, Suppliers would forfeit the contract option year extension beyond June 30, 2024.
  2. PSPC indicates to Suppliers that the amendment is required to ensure good financial stewardship for the government, which aligns with the DMP’s principle of “sound financial stewardship.” Their email implies that there are financial implications associated with the amendment and likely require due consideration by the parties before signing. However, in the same email PSPC states that “its [the amendment’s] purpose is not to change in practice anything in regards [sic] to non-interpretation time,” which directly contradicts their previous statement describing the amendment as having a financial impact. Complainants noted that they felt this email was confusing and contradictory.

84. On July 23, 2024, PSPC emailed Suppliers with a proposal to rectify the situation, which stated “PSPC considered the situation…and in this communication we are providing a way forward that we trust will be satisfactory to all suppliers.” The email first clarifies to Suppliers that “PSPC considers that the option period per Article 4.2 of your contract was exercised by our email sent to all suppliers on May 28, 2024. As such, we consider that all contracts currently remain active.” The email goes on to offer Suppliers their choice of three options: to decline the option year (thereby ending their contract), to maintain the option year extension with the new terms (if they had signed the previous draft amendment), or to maintain the option year with the original contract terms. PSPC stated “This is being offered as an exceptional measure, given that some communications from PSPC subsequent to the 28 May, 2024 email may have included some contradictory information. Should you choose to decline the option year, you are not required to sign any amendment. Suppliers who have not already signed an amendment to exercise the option period will receive a revised amendment that administratively exercises the option period, and does not include any changes to Annex A, para. 5.3 Non-interpreting working hours and grace period.”

  1. PSPC sent this email following OPO’s launch of the 37 complaints, and over one month after PSPC’s last email to Suppliers based on response documentation submitted to OPO.
  2. This is the first time PSPC indicates to Suppliers that their May 28, 2024 email did in fact exercise the option year on all contracts, thereby making all of the contracts valid at the time this July 23, 2024 email was sent.
  3. As stated earlier, the timing of PSPC’s May 28, 2024 notice email, suggests that the department was likely aware that they had exercised the option year. However, documentation regarding the decision to proceed with the option year was absent from the files that PSPC provided to OPO. Therefore, OPO is unable to conclusively determine whether PSPC was aware that their May 28, 2024 email provided the appropriate notice.
  4. From a contractual standpoint, after PSPC’s initial communications created unnecessary confusion and applied short and artificial deadlines, PSPC’s proposed way forward to Suppliers of July 23, 2024 would allow them to accept the option year without simultaneously having to accept new substantive changes, which was the central concern raised by the Complainants.

85. Although, on two occasions, PSPC stated their understanding that their May 28, 2024 email exercised the option year, the department repeatedly advised Suppliers during negotiations that their contracts would expire if they didn’t sign the amendment. The two occasions were PSPC’s July 23, 2024 email proposing a solution to Suppliers, and PSPC’s August 23, 2024 departmental response to OPO. PSPC’s contradictory communications raise questions as to the fairness of the amendment process for the Suppliers, as the Department’s emails provided conflicting information and were not clear about the status of the option year extension.

Communications about the amendment came from both the Contracting Authority and the Project Authority

86. Throughout this process, Suppliers received communications regarding the amendment from both the PSPC Contracting Authority team, as well as the Translation Bureau Project Authority team. Each party would refer to the other’s separate emails in subsequent correspondence. For example, on May 28, 2024, as PSPC emailed the Suppliers for the first time regarding the amendment, they referred back to the advance copy of text sent by the Translation Bureau the previous day, stating, “Article 5.3…of your contract will be amended as mentioned in the Translation Bureau’s Message to [suppliers].”

87. On June 5, 2024, in an email titled “Change to the amendment,” the Translation Bureau contacted the Suppliers stating that “on the advice of the [PSPC Contracting Authority] I am sending you a change to the amendment that I sent last week.” As only the Contracting Authority has the authority to make changes to the contract, the Project Authority (the Translation Bureau) does not have the authority to initiate a contract change, regardless of whether they received direction from PSPC to do so. Based on the documentation received, OPO was unable to find any record of PSPC requesting the Translation Bureau to send further changes to the proposed text of Annex A, Article 5.3 of the contract.

88. When Suppliers were sent proposed text to review by the Translation Bureau, it was not made clear whether this was an official change for their review since it did not originate from the Contracting Authority. Additionally, there was no context given for the new changes, making it impossible for Suppliers to know whether the text was now the "final" version they would be expected to sign once PSPC sends the promised draft amendment document. At this stage, Suppliers had been told three separate times over the course of 8 business days that they would be provided with a formal document to sign, yet it was unclear what text that document would contain. In any case, PSPC as the Contracting Authority named in the contract does not have the authority to delegate its own authority or responsibilities to the Project Authority or other organization falling outside of their team

89. These alternating emails from PSPC and Translation Bureau blurred the lines between Contracting Authority and Project Authority roles and responsibilities noted in the contract.

90. PSPC and the Translation Bureau gave four separate deadlines for signature of the draft amendment text:

  1. The original email sent on June 11, 2024 noted a deadline of June 13, 2024.
  2. On June 17, 2024, the deadline was extended to June 20, 2024.
  3. On June 21, 2024, the deadline was extended to 23:59 on June 29, 2024.
  4. On June 28, 2024, the deadline was extended to 23:59 on June 30, 2024.

91. Despite the apparent urgency noted in their June 11, 2024 email, the deadline for signature was extended a total of three times after June 11, each time by only a few days. Several Complainants remarked that they felt pressured by the very short and changing deadlines, and noted confusion over what seemed to be an artificial deadline to create a false sense of urgency to agree to changes that were brought forward at the last minute. This left Suppliers confused and questioning the necessity of the changes, which ultimately were retracted by PSPC on July 23, 2024.

92. The short and fluctuating deadlines for review and signature of the draft amendment limited the Suppliers’ ability to properly evaluate the proposed changes. Furthermore, as noted by several Complainants, many of their specific clarification questions went unanswered by PSPC. Suppliers were required to review, evaluate, and decide upon substantive changes regarding the calculation and billing of their working hours under very short and shifting timelines, yet were not provided the opportunity to receive answers to their clarification questions. As contract amendments must be agreed to by both parties, it is important to provide sufficient time for both parties to review and assess any considerations.

Findings – Issue 3

93. Based on the documentation received in relation to the complaints, OPO found that the administration of the 37 contracts was not conducted in a reasonable manner under the circumstances. PSPC’s actions and communications with Suppliers regarding the revised amendment were constantly changing, and caused confusion while questions remained unanswered. Furthermore PSPC repeatedly indicated to Suppliers that they needed to accept changes to Annex A, Article 5.3 on an urgent basis, otherwise their contracts would expire, when in actuality, the option year had already been exercised by PSPC via the notice given in their May 28 email.

94. In addition, OPO found that PSPC did not allow sufficient time for Suppliers to consider the substantive changes being proposed in the revised draft amendment and an opportunity to negotiate any consideration in the contract. PSPC’s actions unnecessarily inflicted a sense of urgency upon the Suppliers around the contract expiry date, leaving Suppliers unsure of whether they were still in contract with PSPC after June 30, 2024.

95. Moreover, OPO found that the various alternating communications sent by PSPC and the Translation Bureau created an atmosphere of confusion for the Suppliers as to who had the authority to make changes to the contract, especially considering many of the Complainants’ clarification questions went unanswered.

96. It is clear from the above that PSPC’s actions over the course of negotiations of the amendment were unreasonable under the circumstances. However, due to the lack of documentation associated with PSPC’s decision to proceed with the revised amendment, there is insufficient evidence for OPO to determine an “intent to deceive” or that PSPC’s actions were “knowingly or intentionally wrong,” which is required to determine that a party acted in bad faith.

97. It should be mentioned that, despite their initial actions, PSPC took positive steps to address the contractual issues associated with these complaints in their proposed resolution sent to Suppliers on July 23, 2024, which was evidenced by the fact that 36 of the 37 Complainants signed the new amendment.

Conclusion

98. The Procurement Ombud found that PSPC exercised the option to extend the contract in accordance with Article 4.2 “Option to Extend the Contract.” PSPC sent written notice on May 28, 2024, 30 calendar days before contract expiry, as per the contract terms. The option year was therefore exercised upon the Suppliers’ receipt of the email on May 28, 2024.

99. The Procurement Ombud further found that the amendment proposed by PSPC would have resulted in a substantive change to the terms and conditions of the contract. The revised draft amendment sent by PSPC on June 11, 2024 was substantive in nature as it ultimately changed the hours that Suppliers were entitled to invoice, thereby reducing the amount of money they were eligible to be paid under the contracts for the same amount of work.

100. The Procurement Ombud found that PSPC’s actions during the negotiation of the amendment were unreasonable in the circumstances, as they included contradictory messages, excessively short turnaround times, unanswered requests for clarifications, and repeated extensions of what were said to be urgent deadlines. PSPC’s actions did not align with the spirit of the Directive on the Management of Procurement (DMP) to foster fairness, openness, transparency and collaboration with the Suppliers. However, OPO had insufficient evidence to determine whether there was an “intent to deceive” or that PSPC’s actions were “knowingly or intentionally wrong,” which would be required to find “bad faith.”

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