Acquisition of carpentry repair services by the Department of National Defence

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Catalogue number:
P114-45/2026E-PDF
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The complaint

  1. On September 11, 2025, the Office of the Procurement Ombud (OPO) received a written complaint from a supplier (the Complainant) regarding a contract awarded by the Department of National Defence (DND / the Department). The contract was for carpentry repair services for the Canadian Forces Housing Agency (CFHA), which is a Special Operating Agency within DND. The contract was awarded on August 26, 2025, and was valued at $79,000 (taxes excluded).
  2. The Complainant contacted OPO stating it believed that the contract was not properly awarded because the successful bidder is an active member of the Canadian Armed Forces (CAF) and did not have the proper Workplace Safety and Insurance Board (WSIB) coverage footnote 1.
  3. The complaint raised the following issues:
    1. Did DND conduct its procurement process in a fair manner by properly assessing the possible conflict of interest (COI) of the individual business owner of the successful bidder?
    2. Was DND required to evaluate a bidder’s WSIB coverage prior to contract award?
  4. On September 16, 2025, OPO confirmed the complaint met the requirements of the Procurement Ombudsman Regulations (the Regulations) and it was considered filed.

Mandate

  1. This review of complaint was conducted under the authority of paragraph 22.1(3)(b) of the Department of Public Works and Government Services Act and sections 7 to 14 of the Regulations.
  2. Pursuant to subsection 9(2) of the Regulations, the Procurement Ombud requested DND provide all departmental records associated with the procurement and the award of the contract in question, as well as DND’s procurement policies and guidelines in effect at the time of the solicitation. The Procurement Ombud also requested the Complainant provide any additional information not submitted as part of the complaint.
  3. The chronology of events and the findings in this report are based on the records provided to OPO by the Complainant and DND, as well as relevant publicly available information. The failure by either the Complainant or DND to disclose any relevant records or information could impact the findings of this report.

Chronology of events

  1. On August 13, 2025, DND issued a Request for Quotation (RFQ) number A3725-00015 to 5 selected suppliers. The scope of work was carpentry repairs for a residential housing unit located on Canadian Forces Base Trenton. The RFQ indicated that the solicitation would close on August 20, 2025, at 2 PM Eastern Time.
  2. On August 20, 2025, the RFQ closed. DND received 3 bids, including the Complainant’s and the successful bidder’s. The other 2 selected suppliers did not respond. When the RFQ was issued to the 5 selected suppliers, the successful bidder and two other suppliers were identified as individuals, not as a corporation or in partnership with someone else.
  3. On August 26, 2025, DND awarded a contract to the successful bidder. The successful bidder’s bid and the contract were done in the name of a business, but the individual signed both documents on behalf of the business as its owner.  
  4. On August 26, 2025, a regret letter was sent to the Complainant, notifying that a contract had been awarded to the successful bidder in the amount of $79,000 (taxes excluded). The Basis of Selection for the RFQ was the lowest evaluated price, meaning a contract would be awarded to the compliant bid with the lowest evaluated price. While the Complainant’s bid was found to be responsive to the mandatory requirements of the RFQ, it was the 2nd lowest-priced compliant bid submitted. 
  5. On August 28, 2025, the Complainant sent a request for debriefing to DND, stating that it understood that its bid did not offer the lowest price, but it met the required certifications and legal requirements to a greater extent than its competitors and that it was bidding against public service employees. The Complainant also alleged that it brought up these concerns in a previous RFQ issued by DND for Canadian Forces Base Trenton, but did not receive an adequate reply.
  6. On September 5, 2025, DND responded to the Complainant that Canada is legally obligated to award contracts to the lowest compliant bidder per the RFQ, and that all bidders were required to complete the Offeror Declaration Form which is mandatory and assessed on pass/fail basis. DND stated that real and perceived conflicts of interest were assessed and that no bidder was involved in the preparation of the solicitation or had access to information not available to others that could provide an unfair advantage. DND encouraged the Complainant to share its concerns from the previous RFQ, and asked the Complainant for availabilities and if the Complainant preferred a virtual debriefing. The Complainant replied that it would contact DND the following Monday to arrange a virtual meeting.
  7. On September 8, 2025, the Complainant told DND that it was flexible to meet that week, wanting to discuss RFQ clause “3.7 Former Public Servants”, and contract clauses “13.2 Compliance with Laws” and “19.1 Status of Contractor”. The Complainant stated that in the previous RFQ, it only received responses that “the Contractor is in compliance”. The Complainant believed that the compliance should be in place before bidding.
  8. On September 11, 2025, the Complainant followed up again. DND emailed the Complainant and declined the virtual debriefing, stating that a written debriefing had already been provided. DND stated that a debrief discussion had to focus solely on the contents of the Complainant’s bid, that the subject of the Complainant’s concerns did not pertain to its bid and therefore could not be addressed as part of the debrief. On the same date, the Complainant replied to DND that it would contact OPO.
  9. On September 11, 2025, OPO received a written complaint from the Complainant. On September 16, 2025, the written complaint was considered filed.
  10. On September 17, 2025, the DND Technical Authority asked the DND Contracting Authority whether a request had gone to the successful bidder for proof of WSIB coverage.
  11. On September 29, 2025, DND contacted the successful bidder about conflict of interest and WSIB coverage. The successful bidder responded that it was approved by its chain of command to do civilian work, and provided its WSIB clearance certificate. The WSIB clearance certificate only referred to category “238320 Painting and wall covering contractors”, and did not refer to the category “236110 Residential building construction”.
  12. On October 1, 2025, OPO advised both DND and the Complainant that it launched a review of the complaint.
  13. On October 2, 2025, the DND Technical Authority stated that there may be grounds for a work suspension against the successful bidder. DND issued a stop work order against the successful bidder due to insufficient WSIB coverage. The successful bidder responded that it would switch WSIB categories and would send confirmation the next day.
  14. On October 3, 2025, the successful bidder sent DND a WSIB clearance certificate referring to a new category “236110 Residential building construction”.
  15. On October 6, 2025, the DND Contracting Authority asked the DND Technical Authority whether contractors could just switch WSIB categories without changing the validity period. The DND Technical Authority responded that the new certificate looked appropriate and that the change would be similar to changing automobile coverage mid-term where the renewal period remained the same.
  16. On October 6, 2025, OPO received DND’s documentation pertaining to the solicitation number A3725-00015.
  17. On October 16, 2025, OPO received the Complainant’s additional documentation.
  18. On November 3, 2025, OPO received DND’s detailed response to the complaint and additional supporting documentation.

Analysis of issues and findings

Issue 1: Did DND conduct its procurement process in a fair manner by properly assessing the possible conflict of interest (COI) of the individual business owner of the successful bidder?

  1. In an email, dated September 5, 2025, from DND to the Complainant, DND stated that real and perceived conflicts of interest were assessed and that no bidder was involved in the preparation of the solicitation or had access to information not available to others that could provide an unfair advantage.
  2. In its response to OPO, DND stated:

“To assess potential conflict of interest (COI), the CFHA Manager of Procurement and Contracting interviewed the Technical Authority and the HSC [(Housing Services Centre)] Trenton Manager. It was confirmed that the owner of the winning company was not involved in developing or defining the requirement.

CFHA also reviewed compliance with DAOD [(Defence Administrative Orders and Directives)] 7021-0 that governs internal conduct and disclosure obligations for CAF members. While non-compliance may have administrative consequences for the individual within the CAF, it does not affect the legal eligibility of their business to participate in public solicitations. The owner of the winning company has provided confirmation of COI disclosure to their chain of command and written approval from their Commanding Officer to operate the business, contingent on it not interfering with CAF duties.

CFHA advised [the Complainant] that a COI assessment was conducted and no conflict was found. However, specific details could not have been disclosed.”

Analysis – Issue 1

  1. Obligations to identify and mitigate conflicts of interest are ever-present in federal public service, including throughout the federal procurement process. The importance of these obligations has been underscored by the Supreme Court of Canada. In Fraser v. Public Service Staff Relations Board, [1985] 2 SCR 455, Chief Justice Dickson notably emphasized the importance and necessity of maintaining an impartial and effective public service.
  2. This important obligation is confirmed and reiterated in numerous policy and guidance documents within the federal government. The following is a non-exhaustive list of documentation pertaining to conflict of interest that was referenced for the analysis of this report. References from the RFQ and the contract are also found below.
  3. Under section 4.3.2.2 of Treasury Board of Canada Secretariat’s Directive on the Management of Procurement (DMP), contracting authorities are responsible for ensuring that the integrity of the procurement process is maintained throughout, including “by monitoring, preventing, identifying and reporting any conflict of interest that may exist and taking appropriate mitigating action as required.”
  4. Section 3.3 of the RFQ states that “the Offeror must comply with Canada's Code of Conduct for Procurement.” Additionally, under section 3.5(a)(i), regarding Conflict of Interest - Right to Reject, the RFQ states “Canada may reject an offer if the Offeror, any of its subcontractors, or any of their respective employees or former employees was involved in any manner in the preparation of the solicitation of offers or in any situation of conflict of interest or appearance of a conflict of interest.”
  5. The Code of Conduct for Procurement, referenced from the RFQ, above, outlines expectations and obligations for vendors and their sub-contractors who respond to bid solicitations and/or provide goods and services to Canada. Section 5 of the Code of Conduct for Procurement states the following regarding COI:

“By submitting a bid/offer/arrangement, vendors warrant that no real, apparent or perceived conflict of interest exists or is likely to arise in the performance of the contract. If vendors become aware of any matter that causes or may cause a conflict of interest, they must immediately disclose the matter to the contracting authority in writing.”

  1. The contract issued by DND to the successful bidder, in sections 13.7 and 13.8 states the following regarding the successful bidder’s COI and ethics obligations:

“13.7. No Conflict. The Contractor warrants that, to the best of its knowledge after making diligent inquiry, no conflict exists or is likely to arise in its performance of the Contract. If the Contractor becomes aware of any matter that causes or is likely to cause such a conflict, the Contractor must immediately disclose it to the Contracting Authority. If the Contracting Authority is of the reasonable opinion that such a conflict exists, it may either (i) require the Contractor to take steps to deal with the conflict or (ii) terminate the Contract for default. In this section, “conflict” means any matter, circumstance, interest, or activity affecting the Contractor, its personnel, or its subcontractors, that may impair or may appear to impair its ability to perform the Work diligently and independently.

13.8. Ethics Codes for Public Service. The Contractor acknowledges that individuals who are subject to the provisions of the Conflict of interest [sic] Act, the Conflict of interest Code for Members of the House of Commons, the Values and Ethics Code for the Public Service or all other codes of values and ethics applicable within specific organizations cannot derive any direct or indirect benefit from the Contract.”

  1. The Department of National Defence and Canadian Forces Code of Values and Ethics sets out expectations for all DND employees and Canadian Forces members with respect to conflicts of interest. In particular, regarding prevention of COI, section 9.3.1 states:

“DND employees and CF [(Canadian Forces)] members maintain public confidence in the objectivity of the public service, which includes DND, and of the CF, by preventing and avoiding situations that could give the appearance of a conflict of interest, or result in a potential for a conflict of interest, or give rise to an actual conflict of interest. […]”

  1. Defence Administrative Orders and Directives (DAOD) are directives that apply to employees of DND and orders that apply to officers and non-commissioned CAF members. “DAOD 7021-1, Conflict of Interest” states the following in section 7.4 regarding contracts for services:

“If a contract is awarded to a DND employee or CAF member, it should not give rise to any suggestion of preferential treatment. The risk of COI must be given serious consideration and, if necessary, action must be taken to alleviate the COI prior to engaging the services of any person or entity. If a potential COI situation is discovered, the matter must be disclosed to a supervisor and the COI resolved. Advice or assistance may also be sought from the DDEP [(Director Defence Ethics Programme)].”

  1. The Treasury Board of Canada Secretariat’s Policy on People Management states the following for the definitions of conflict of interest in its Appendix D:
    • apparent conflict of interest: A situation that could be perceived as a conflict of interest by a reasonable observer, whether or not it is the case.
    • potential conflict of interest: A conflict of interest situation that could reasonably be foreseen to happen in the future.
    • real conflict of interest: A conflict of interest situation that exists at the present time.
Entity subject to COI assessment
  1. As DND awarded the contract to an individual business owner of the successful bidder and not to a corporation or a partnership, any COI assessment of the successful bidder would be a COI assessment of the individual business owner, who is an active CAF member.
Real conflict of interest
  1. In its response to OPO, DND stated that the owner of the winning company provided confirmation of a COI disclosure to their chain of command, obtained written approval to operate the business provided it did not interfere with their CAF duties, and was not involved in developing or defining the requirement after an interview with the CFHA Manager of Procurement and Contracting, the Technical Authority and the HSC Trenton Manager.
  2. Apart from DND’s statement and from the fact that the individual owner of the successful bidder’s business is an active CAF member, there is no other information in the documentation provided to OPO by the Complainant or by DND to demonstrate that a real conflict of interest did or did not exist.
Apparent (perceived) conflict of interest
  1. As an active CAF member, the individual business owner of the successful bidder had an obligation to declare any possible COI.  He did make such a declaration in 2024 when he requested permission to continue civilian employment as a home renovations contractor from his chain of command. His request was then granted by his chain of command solely for operating a civilian carpentry business, on the explicit condition that it not conflict with his CAF duties.
  2. However, that general approval alone was not enough to address the situation that became subject of this complaint. Conducting a carpentry work on DND premises for a DND funded project introduced a fundamentally different level of COI risk than conducting a carpentry business for external clients. The individual owner of the successful bidder’s business did not ask his chain of command to approve his carpentry work for DND and on DND premises. He only asked his chain of command about performing carpentry work in general.
  3. This is significant because the act of carrying out civilian business activities on DND premises and being funded by DND created a new and separate possible COI. This possible COI should have been declared independently of the original, general request from 2024. It raised questions regarding fairness and apparent (perceived) preferential treatment. These were all important COI concerns.
  4. While DND and the CAF are separate and distinct entities from each other, they work closely together and have complementary roles to play in supporting the Minister of National Defence and implementing government decisions regarding the defence of Canadian interests at home and abroad. DND is a federal department and carries out the work assigned to the Minister of National Defence. The CAF are responsible for the conduct of military operations and carry out tasks assigned by Parliament through the Minister of National Defence. In this case, DND awarded the contract for the CFHA, whose mandate is to provide housing solutions for the needs of the CAF members.
  5. In its response to OPO, DND stated that “the owner of the winning company is a current CAF member,” but did not confirm the CAF base where the successful bidder was posted. The CAF base where the successful bidder would provide its carpentry repairs services is within a radius of 45 kilometres of and is the closest CAF base to the successful bidder’s address.
  6. DND’s RFQ process was not open to the general public. DND sent the RFQ to 5 selected suppliers, including the successful bidder. No documentation provided to OPO by DND demonstrates how or why these 5 suppliers were chosen for the RFQ. A reasonable observer would perceive that DND awarding the contract to the successful bidder, being an active CAF member, could give rise to a suggestion of preferential treatment, thus deviating from DAOD 7021-1.
  7. Part of DND’s response to OPO was that the individual owner of the successful bidder’s business obtained approval from his chain of command in 2024. This general approval did not contemplate important aspects of the perceived COI, namely performing carpentry work on DND premises, for DND. It may have been an adequate mitigation to the risk of COI had the successful bidder’s chain of command expressly considered and approved the performance of the carpentry work on DND premises and for DND, but that did not occur. DND had the obligation to assess this apparent COI, and failed to do so.
  8. Furthermore, in accordance with Section 5 Conflict of interest of the Code of Conduct for Procurement, when the successful bidder submitted its bid, it had the obligation to warrant that no apparent or perceived COI exists or is likely to arise in the performance of the contract. If it became aware of any matter that causes or may cause a COI, it had the obligation to immediately disclose the matter to the DND contracting authority in writing. No documentation provided to OPO by DND demonstrates that the successful bidder disclosed such matter to DND in writing.
  9. Moreover, section 13.8 of the contract titled “Ethics Codes for Public Service,” which also formed part of the RFQ, prohibits the individual business owner of the successful bidder, who is subject to codes of values and ethics applicable to CAF members such as the Department of National Defence and Canadian Forces Code of Values and Ethics, from deriving any direct or indirect benefit from the contract.
  10. The application of this section 13.8 of the contract and the existence of an apparent COI gave DND sufficient reason to pause and reflect on the implications of awarding to the successful bidder.
  11. DND should have exercised, in accordance with section 3.5(a) of the RFQ, its right to reject the successful bidder’s bid because the successful bidder was involved in a situation of appearance of a conflict of interest. Instead, DND proceeded with awarding the contract to the successful bidder.
  12. As DND’s RFQ process was not open to the general public, not only did DND have the obligation to assess possible COI prior to contract award, but DND had a prior obligation to assess possible COI when it selected the 5 suppliers to be the recipients of its RFQ. The concerns of possible COI should have arisen and been considered when DND selected the successful bidder, an active CAF member, as one of the 5 suppliers who were invited to bid. However, no documentation provided to OPO by DND demonstrates a COI assessment was conducted for the successful bidder before being invited to bid on the RFQ.
Timing
  1. The timing of assessing possible COI is important because its result could affect the selection of the winning bid. Bids could be disqualified for apparent, potential or real COI. Therefore, assessing possible COI should be conducted prior to contract award. For contracts for services awarded to a CAF member, section 7.4 of DAOD 7021-1 specifically states that said contract award “should not give rise to any suggestion of preferential treatment. The risk of COI must be given serious consideration and, if necessary, action must be taken to alleviate the COI prior to engaging the services of any person or entity.”
  2. Although DND failed to assess possible COI before inviting the successful bidder to participate in the RFQ process, it nevertheless still had the opportunity to assess possible COI after receiving bids and prior to awarding the contract. However, DND did not do so in a timely manner as described below.
  3. DND stated to the Complainant on September 5, 2025, that DND assessed real and perceived COI. However, no documentation provided to OPO by DND demonstrates what was assessed or whether the assessment was conducted prior to contract award on August 26, 2025.
  4. In its response to OPO, DND stated that it was confirmed that the successful bidder was not involved in developing or defining the requirement after an interview with the CFHA Manager of Procurement and Contracting, the Technical Authority and the HSC Trenton Manager. However, no documentation provided to OPO by DND demonstrates that this interview occurred, or whether it occurred prior to contract award on August 26, 2025.
  5. The contract was awarded on August 26, 2025. The Complainant requested a debriefing and expressed concerns about the eligibility of a CAF member being awarded the contract on August 28, 2025. The documentation provided by DND demonstrates that an internal exchange was held on September 3, 2025 in which a DND official stated that no bidder was involved in the preparation of the solicitation or had access to privileged information. A COI assessment was then only conducted on September 29, 2025, when DND asked the successful bidder if there was any potential, real or perceived COI in relation to the awarded contract. This COI assessment was not conducted before contract award, but 23 working days after the date of contract award and after DND became aware that OPO received a complaint regarding the award of the contract.
  6. Not only did DND fail to conduct a COI assessment before contract award, it also failed to act properly when the Complainant raised the potential risk of the successful bidder’s ineligibility due to being an active CAF member. In its 2025 determination in Axxys Construction Group v. Department of Public Works and Government Services, the Canadian International Trade Tribunal (CITT) stated that when a government institution becomes aware of red flags raised during a procurement process, the government institution should verify the red flag at the first time it was raised. In this case, a COI assessment should have been conducted immediately after the Complainant raised its concerns on August 28, 2025 and prior to engaging the services of the successful bidder, in line with DAOD 7021-1.
  7. The failure to conduct a COI assessment regarding the successful bidder before contract award of August 26, 2025 jeopardized the integrity of the procurement process and explicitly deviated from DAOD 7021-1, which states that “the risk of COI must be given serious consideration and, if necessary, action must be taken to alleviate the COI prior to engaging the services of any person or entity.”

Finding – Issue 1

  1. The Procurement Ombud found that DND did not conduct its procurement process in a fair manner because it failed to properly assess and address the potential COI of the individual business owner of the successful bidder. While there was insufficient evidence to establish a real conflict of interest, the circumstances gave rise to an apparent COI. In light of this apparent COI, and consistent with DAOD 7021-1, DND should not have invited the successful bidder to bid on the RFQ, should have exercised its right to reject the successful bidder’s bid, and should not have awarded the contract to the successful bidder. Further, DND did not resolve the apparent COI prior to contract award, or afterward, as required by section 13.7 of the contract.

Issue 2: Was DND required to evaluate a bidder’s WSIB coverage prior to contract award?

  1. The Complainant stated:

“It has come to our attention that the competing companies have had several disqualifying issues that CFHA has ignored in the past and continues to ignore. It is publicly accessible to discover that a construction company does not have WSIB coverage. This is against the law to hire companies without proper insurances.

[…]

[T]he successful contractor does not have the proper WSIB classification.”

  1. In its response to OPO, DND stated:

“The RFQ did not explicitly require WSIB coverage. Section 13.2 of the RFQ states:

‘The Contractor must comply with all laws applicable to the performance of the Contract. The Contractor must provide evidence of compliance with such laws to Canada at such times as Canada may reasonably request.’

This includes compliance with various laws (e.g., immigration, tax, insurance, etc.). CFHA consulted legal advisors who confirmed that insurance is not required prior to solicitation and may be obtained at or after contract award. CFHA is not obligated to verify WSIB coverage during the solicitation phase.”

Analysis – Issue 2

  1. The RFQ states the following regarding insurance:

“3.6. Insurance. The successful Offeror will be responsible to meet insurance requirements in accordance with the resulting contract section entitled "Insurance".”

  1. The Resulting Contract Clauses in the RFQ and the contract includes the following identical clauses:

“12.1 Insurance Requirements. The Contractor is responsible for deciding if insurance coverage is necessary to fulfill its obligations under the Contract and to ensure compliance with any applicable law. Any insurance acquired or maintained by the Contractor is at the Contractor’s expense and for its own benefit and protection. It does not release the Contractor from or reduce its liability under the Contract.

13.2. Compliance with Laws. The Contractor must comply with all laws applicable to the performance of the Contract. The Contractor must provide evidence of compliance with such laws to Canada at such times as Canada may reasonably request.”

  1. The WSIB Operational Policy Manual, section Employer Accounts, Clearance Certificate in Construction states:

“Policy

A principal who directly retains a contractor to perform construction work must obtain a clearance certificate (hereafter clearance) that confirms the contractor is in good standing with the WSIB. The principal and contractor must ensure that a clearance is obtained before the construction work begins and that a clearance remains in effect for the entire time the contractor is performing the work. Starting the construction work without a clearance is an offence for both the principal and contractor.

Requirements for issuing clearances

Contractors must meet WSIB registration, reporting, and payment obligations to have their accounts in good standing, and to be eligible for a clearance.”

  1. The RFQ did not contain any requirement for bidders to submit proof of WSIB coverage. Consequently, DND was not required to evaluate before contract award whether a bidder submitted proof of WSIB coverage or whether a bidder had the necessary WSIB coverage.
  2. While outside of the purview of this review of complaint regarding the award of a contract, it is important to note that the requirement should still be assessed before work commences during contract administration. The successful bidder was required to comply with all applicable laws during the performance of the contract. DND had the right to request the successful bidder to provide evidence of such compliance and should do so in the future prior to the commencement of the work.
  3. DND exercised its right by asking the successful bidder to provide proof of WSIB coverage on September 29, 2025. The successful bidder then provided proof of WSIB coverage for the category “238320 Painting and wall covering contractors” with a validity period from August 20, 2025, to February 19, 2026. DND assessed that the successful bidder’s WSIB coverage was insufficient and issued a work suspension against the successful bidder on October 2, 2025. The successful bidder then responded on October 3, 2025, by submitting proof of WSIB coverage with the category “236110 Residential building construction” with a validity period from August 20, 2025 to February 19, 2026.
  4. While no documentation provided to OPO by DND demonstrates that the work suspension was lifted, DND’s response that the “CFHA placed the work on hold and requested proof of WSIB coverage from the winning bidder, which was provided […]” demonstrates that DND was satisfied with the successful bidder’s new proof of WSIB coverage. Ultimately, the Procurement Ombud cannot provide a conclusive finding on the issue of whether the appropriate coverage was held by the successful bidder pursuant to the requirements of the contract during contract performance as this issue falls outside the scope of review for a complaint regarding the award process.

Finding – Issue 2

  1. The Procurement Ombud found that based on the RFQ, DND was not required to evaluate whether a bidder submitted proof of WSIB coverage or whether a bidder had the necessary WSIB coverage prior to contract award. DND evaluated the submitted bids in accordance with the requirements of the RFQ.

Conclusion

  1. The Procurement Ombud found merit in the first issue raised by the Complainant. The Department had the obligation to assess and resolve the risk of COI prior to contract award. The Department failed to properly assess and resolve the perception of a COI presented by awarding a contract for work to be performed for DND, and on DND premises, to a business wholly owned by an active CAF member. As a result, its procurement process was not conducted in a fair manner.
  2. The Procurement Ombud did not find merit in the second issue raised by the Complainant. The Department evaluated the WSIB coverage in accordance with the requirements of the RFQ.

Other observations

  1. As per subsection 12(1) of the Regulations, the Procurement Ombud is required to consider any relevant factors related to the procurement process in question when conducting a review of a complaint on the award of a contract.
  2. The DMP emphasizes the importance of maintaining complete and accurate procurement records. Under section 4.10, contracting authorities are responsible for “[e]nsuring that accurate and comprehensive procurement records applicable to the contract file are created and maintained to facilitate management oversight and audit […]” (4.10.1) including “[a] record of individual assessments, consensus evaluation, relevant decisions, approvals, communications and dates.”  (4.10.1.2)
  3. The Procurement Ombud found that there were limitations in OPO’s capacity to review the Department’s COI assessments. Based on the contradictions between what DND stated and the documentation provided, it was clear that certain decisions were not being documented to the extent necessary to meet Section 4.10.1 of the DMP. The lack of documentation provided a challenge for OPO to conduct its analysis. As per the DMP, departments must keep proper procurement records and rationales for decisions.
  4. OPO takes note of the improvements committed to by DND after the launch of this review of complaint. In its response to OPO, DND stated:

“CFHA remains committed to ensuring fairness, transparency, and equal opportunity in all procurement activities. We continuously review and refine our processes to uphold these principles.
To enhance transparency and consistency, CFHA has implemented the following changes to its Procurements:

CFHA remains committed to investigating and resolving any potential or actual conflicts of interest.

Compensation

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

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

  1. As the Department solicited bids from multiple suppliers, including the Complainant, and the Complainant submitted a bid, the Procurement Ombud may recommend payment of compensation in accordance with subsection 13(1) of the Regulations.
  2. The RFQ states the following regarding the basis of selection:

“10.1. Lowest Evaluated Price. For Canada to declare an offer compliant, the offer must comply with the requirements of the solicitation of offers. Canada will consider the compliant offer with the lowest evaluated price for award.”

  1. As the Procurement Ombud found that the Department should not have invited the successful bidder to bid on the RFQ or awarded the contract to the successful bidder, the Department should not have received the successful bidder’s bid to evaluate or should have disqualified the successful bidder from contract award due to an apparent COI.
  2. The Complainant’s bid was found to be responsive to the mandatory requirements. It was the 2nd lowest-priced bid. After the exclusion of the successful bidder’s bid, the Complainant’s bid becomes the lowest-priced compliant bid available for contract award. As a result, in accordance with the RFQ’s basis of selection of lowest evaluated price, the Complainant should have been awarded the contract.
  3. As the Complainant should have been awarded the contract, the Procurement Ombud recommends payment of compensation based on lost profit.
  4. At OPO’s request, the Complainant provided the amount of its lost profit.

Recommendation

  1. In accordance with sub-paragraph 13(1)(a) of the Regulations, the Procurement Ombud recommends DND pay compensation to the Complainant in an amount equal to 10% of the value of the contract awarded, less the Complainant’s bid submission costs. The Procurement Ombud recommends DND pay the Complainant $7,650.00.
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