Investigate

What we did to examine and review procurement issues

Each written complaint received from a supplier about the award or administration of a federal contract is assessed against the Procurement Ombudsman Regulations (Regulations) to determine if a review must be launched. Once a review is launched, the Procurement Ombudsman is required to issue a report which includes findings and, where warranted, recommendations. In instances where the Ombudsman is unable to launch a review, the written complaints are assessed to determine if there are any potential systemic issues or potential risks to fairness, openness or transparency. Where such issues or risks are identified, the Procurement Ombudsman may launch a procurement practice review to examine the procurement practices of federal organizations. This section outlines what the Office did to review procurement issues, beginning with reviewing supplier complaints.

Reviewing supplier complaints

Suppliers who have concerns about the award or administration of a federal contract can file a written complaint with the Office. Once a written complaint has been received, the Procurement Ombudsman has 10 working days to make a determination on whether to undertake a review.

In making a determination, the Ombudsman is required to assess whether the complaint meets the requirements specified in the Regulations (see Table 1). If a complaint meets the regulatory criteria and it is determined to fall within the Procurement Ombudsman's jurisdiction, the Ombudsman must launch a review.

Of the 52 written complaints filed with the Office, 48 (92%) pertained to the award of a contract while the remaining 4 (8%) pertained to the administration of a contract. Of these 52 complaints, 39 (75%) did not meet the criteria specified in the Regulations, while 5 were withdrawn. The remaining 8 complaints fell within the Procurement Ombudsman's jurisdiction and reviews were launched.

For the period between December 21, 2015, and March 31, 2016, there was no Procurement Ombudsman meaning the Office did not have the authority to determine whether written complaints met the regulatory criteria, to launch reviews of complaints, or to issue reports. Of the 52 written complaints, 13 were submitted in 2015-2016 during the period without an Ombudsman and therefore were held for decision. Once the Interim Procurement Ombudsman was appointed, effective May 9, 2016, decisions on all 13 written complaints were made within 10 working days of his appointment. Of these 13 written complaints, 2 met the criteria specified in the Regulations and reviews were launched. Reports on these two reviews will be issued in 2016-2017.

Table 1

Criteria related to a complaint regarding the award of a contract include:

Criteria related to a complaint regarding the administration of a contract include:

Complainant is a Canadian supplier. Complaint is filed in writing, within prescribed timeframes. Contract has been awarded. Contract value is less than $25,000 for goods or less than $100,000 for services. Federal organization falls under the jurisdiction of the Ombudsman. Agreement on Internal Trade is applicable, except for dollar thresholds. Facts or grounds of the complaint are not and have not been before the Canadian International Trade Tribunal or the courts. Reasonable grounds exist to believe the contract was not awarded in accordance with the regulations made under the Financial Administration Act.

Complainant is a Canadian supplier. Complaint is filed in writing, within prescribed timeframes. Complainant must have been awarded the contract in question. Complaint cannot be about the application or interpretation of the terms and conditions or about the scope of the work of the contract.

For a complete list of criteria, please consult the Procurement Ombudsman Regulations on the OPO website.

Review of complaint summaries

The following are summaries of the 7 reviews of complaints completed in 2015-2016, including one review which was carried forward from 2014-2015.

Poorly written solicitations can cause confusion for suppliers

A complaint was received regarding the award of a contract against a standing offer for Temporary Help Services. The Complainant raised three issues regarding:

1. the period of work;
2. the minimum mandatory qualifications for education; and
3. the federal organization's communication during the solicitation period.

In reference to the first issue, the Complainant claimed the solicitation contained contradictory information regarding the period of work. The review determined the solicitation did contain contradictory elements, given it stated 6 weeks of work was required, yet the estimated start and end dates of the contract were less than 6 weeks apart.

Regarding the second issue, the Complainant claimed the solicitation contained questionable elements regarding the minimum mandatory qualifications for education. From the Complainant's perspective, the educational requirements were not relevant to the required service. However, the solicitation included the required minimum mandatory qualifications for education as prescribed by the standing offer. The review therefore did not validate this issue.

With respect to the third issue, the Complainant claimed it asked questions during the solicitation period to clarify the requirement and that no responses were provided. The federal organization acknowledged it did not respond to the Complainant's questions during the solicitation process.

While the review established two of the three issues raised by the Complainant had merit, an examination of the procurement process revealed the federal organization adhered to the procedures required by the standing offer and thus awarded the contract appropriately.

Was a supplier banned from bidding?

A complaint was received regarding the award of a contract for credit reporting services. The Complainant alleged it had been banned by a federal organization from bidding on the solicitation.

The review found that the federal organization had no basis to prevent the Complainant from bidding once it requested to be included in the procurement process. By not including the Complainant, the federal organization unjustifiably limited competition and in doing so did not adhere to the Treasury Board Contracting Policy requirement to provide equal opportunity for access to government business.

The review also found other issues with the procurement in question, including the use of undisclosed criteria to select the winning supplier. In doing so, the federal organization failed to adhere to the Treasury Board Contracting Policy and compromised the principles of fairness, openness and transparency.

As the federal organization prevented the Complainant from submitting a bid, the Ombudsman recommended the federal organization pay compensation to the Complainant. The Ombudsman also recommended the organization take the necessary steps to develop a procurement strategy for its ongoing requirement for credit reporting services.

The onus to demonstrate how a proposal meets the evaluation criteria rests with the supplier

A complaint was received regarding the award of a contract for professional services. The Complainant stated its proposal should have received one more point in the rated criteria and therefore should have been awarded the contract.

Given the scoring formula specified in the solicitation, the Complainant's assertion was correct in that it would have been awarded the contract had its proposal received one additional point. The Complainant contended its proposal fully demonstrated an experience criterion was met, and therefore should have received an additional point, whereas the federal organization found the Complainant's proposal failed to clearly demonstrate how it fully met the experience criterion.

The Regulations prevent the Ombudsman from substituting his opinion for the judgment of the organization unless there is insufficient written evidence to support that assessment or the assessment is unreasonable. The review found sufficient written evidence to support the assessment, and also found the assessment to be reasonable. Additionally, documentation provided by the federal organization confirmed that all rated criteria were evaluated in a consistent manner across bids.

The Ombudsman concluded the federal organization followed the established rules and applicable legislation, policies and guidance, and evaluated all proposals fairly.

Organization properly awarded the contract, but may have unnecessarily limited the pool of potential suppliers

A complaint was received regarding the award of a contract for research and analysis services. The Complainant raised the following issues regarding the evaluation and selection criteria used by a federal organization in awarding the contract:

1. a mandatory insurance criterion was highly irregular for the work to be carried out;
2. a mandatory insurance criterion required at bid closing was discriminatory;
3. a point rated sub-criterion was irrelevant to the work to be carried out.

In regard to the first issue, jurisprudence has established that federal organizations have the discretion to define their procurement requirements to meet their operational needs. As the federal organization provided a rationale as to why it required bidders to possess insurance, there was no basis for the Ombudsman to question this requirement.

With reference to the second issue, by establishing insurance as a mandatory criterion to be in place at the time of bid closing, the federal organization was obligated to declare any bids not meeting this criterion as non-responsive. However, the Procurement Ombudsman noted that by requiring proof of insurance at the time of bid closing, rather than at the time of contract award, the federal organization may have unnecessarily limited the pool of potential suppliers.

In regards to the third issue, the federal organization demonstrated a link between the sub-criterion in question and the work to be performed. Therefore, the Ombudsman had no basis to question the relevancy of this requirement. However, the Procurement Ombudsman noted the organization could have provided more informative responses to the Complainant's questions, raised during the solicitation period, related to this issue.

The review found the issues raised by the Complainant did not have merit, and that the federal organization awarded the contract in a manner consistent with the evaluation and selection procedures stated in the solicitation.

Compensation recommended for a supplier whose proposal was improperly rejected

A complaint was received regarding the award of a contract for Temporary Help Services. The Complainant raised an issue regarding the evaluation of its bid, specifically the results of a reference check conducted as part of the evaluation process.

The review identified concerns with the reference check conducted by the federal organization. The Ombudsman could not determine the grounds on which the organization claimed the reference check did not confirm the experience of the Complainant's proposed worker.

The review further concluded that had the federal organization assessed the Complainant's bid in a manner consistent with its assessment of the successful supplier's bid, the Complainant's bid would have been deemed responsive and would have been awarded the contract.

Based on these findings, the Ombudsman recommended the federal organization pay compensation to the Complainant.

Mandatory security requirement questioned

A complaint was received regarding a contract awarded for the provision of risk assessment services. The Complainant raised the following issues:

1. the solicitation's security requirement did not allow a proposed resource (i.e. an individual) with a higher level personnel security clearance to do work on a contract for a company with lower level of security clearance;
2. the need for a bid to demonstrate a valid security clearance at bid closing was detrimental to small businesses; and
3. there was a lack of communication and advice provided by the federal organization.

With respect to the first issue, the solicitation's security requirement should not have prevented an individual cleared at a Secret (i.e. higher) level from doing work at a Reliability (i.e. lower) level for a company with Reliability level security clearance because a process was available for such situations.

The process was to downgrade the individual's Secret level clearance to a Reliability level then duplicate the clearance so that it was held by the company submitting the individual. The Complainant was not informed of the correct process to modify security clearances.

For the second issue concerning the timing of the mandatory security requirement, jurisprudence has established that organizations have the discretion to define their procurement requirements to meet their operational needs. By establishing the security requirements as a mandatory evaluation criterion at bid closing, the federal organization was required to deem any bids not meeting this mandatory criterion as non-responsive. The Procurement Ombudsman noted that while the records provided by the organization for this review did not contain any indication that imposing a security requirement by bid closing was meant to intentionally disqualify any group, class, or size of businesses, by requiring security at bid closing the federal organization may have inadvertently deterred otherwise qualified suppliers from bidding.

For the third concern related to a lack of communication and advice, the review found communications were not timely and that the federal organization did not provide the proper advice to the Complainant.

While the review established merit on two of the three issues raised by the Complainant, an examination of the procurement process revealed the federal organization awarded the contract in accordance with the criteria in the solicitation. As such, the Ombudsman did not recommend compensation for the Complainant.

During the course of the review, the federal organization stated changes have been made to its procurement practices related to security requirements; if properly and fully implemented, these may help prevent situations like this from reoccurring in the future.

Were contractual obligations met by the federal organization?

A complaint was received regarding the administration of a contract for privacy impact assessment services. This was the first report issued by the Office related to the review of the administration of a contract.

The Complainant raised three issues that fell within the Ombudsman's mandate:

1. the federal organization did not respect its contractual obligations regarding payment and interest payment;
2. terminating the contract for default was not valid as the Complainant's work was delivered within timelines; and
3. the federal organization did not provide comments on draft deliverables within required timelines.

Other issues raised by the Complainant related to the application or interpretation of the terms and conditions of the contract, or to the scope of work of the contract; two areas that the Ombudsman is prohibited by the Regulations to examine as part of a review of complaint regarding the administration of a contract.

With regards to the first issue examined by the Ombudsman, during the course of the review the federal organization issued a payment and interest payment to the Complainant.

On the second issue, the federal organization was permitted, by the terms of the contract, to terminate the contract for convenience. However, in terminating the contract for convenience, the termination notice made a reference to “unsatisfactory” work which appears to have been the impetus for the issues that arose between the Complainant and the federal organization. The Complainant and the federal organization had divergent views regarding the quality of the Complainant's deliverables. OPO was not provided any records that demonstrated the organization communicated concerns about the quality of the deliverables in writing to the Complainant prior to issuing the termination notice.

Regarding the third issue, the federal organization acknowledged it did not provide comments on draft documents within the time frames as required by the contract.

The Regulations prohibit the Ombudsman from providing a remedy other than as specified in the contract. Given the issues raised by the Complainant, the only remedy in the contract was payment, which the federal organization issued during the review. As such, the Ombudsman could not recommend any other remedy.

Most common procurement-related issues

The Office assesses all written complaints to determine if they raise potential systemic issues as well as potential risks to fairness, openness or transparency. The potential issues and risks are tracked alongside issues raised through other procurement-related contacts to the Office. In 2015-2016, the top 5 most common issues raised by suppliers through contacts to OPO were:

1. Evaluation and selection plans
2. Evaluation of bids
3. Procurement strategy
4. Payment
5. Statements of work

The following provides examples of the concerns raised within the top issues brought to OPO's attention through procurement-related contacts and written complaints in 2015-2016:

1. Evaluation and selection plans: Concerns related to how winning bids were selected, more specifically regarding unfair, vague, or unclear evaluation criteria. In addition, suppliers raised concerns regarding:
   1. The view that federal organizations are focused on lowest cost, but may not be obtaining value for money.
   2. Concerns that evaluation criteria were restrictive:
      1. Requiring suppliers to demonstrate they held security clearances at bid submission instead of at contract award or prior to work commencing.
      2. Evaluation criteria that appeared to favour a particular supplier, including the incumbent supplier or a group of suppliers.
2. Evaluation of bids: Concerns regarding how bids were evaluated were often raised to OPO, including:
   1. Federal organizations were using criteria not specified in the solicitation (i.e. undisclosed criteria) to select the winning supplier.
   2. Evaluation criteria were applied inconsistently or subjectively by federal organizations across bids, or contracts were awarded to non-responsive bids.
   3. Some federal organizations did not have sufficient subject-matter expertise to adequately understand and properly evaluate bids, particularly for specialized or highly technical goods or services.
3. Procurement strategy: The methods federal organizations used to obtain the goods or services they required were also subject to supplier concerns:
   1. Standing offers and supply agreements were seen as difficult for small and medium-sized companies to respond to or qualify on, resulting in the view these favor large companies.
   2. National solicitations for work to be done in the regions were viewed as encouraging large companies to obtain work that would otherwise go to “local” small and medium-sized companies.
   3. The use of Advanced Contract Award Notice (ACANs) appeared inappropriate in instances where competing suppliers could provide the required goods or services, indicating to some suppliers that federal organizations were unfamiliar with their industry.
4. Payment: Concerns related to the timing of payments by federal organizations or instances where payments were being withheld:
   1. Payments by federal organizations were not occurring within the timeframes specified in contracts, even after work had been completed and invoiced.
   2. Organizations requested work to be completed, often verbally, that was not part of contracts and thereafter refused to pay once the updated costs had been invoiced.
5. Statements of work (SoW): Concerns in this area focused primarily on the requirements being biased or not aligning with the timeframes within which suppliers were expected to complete the work:
   1. SoW appeared to favour a particular supplier or group of suppliers, often by being unnecessarily specific or restrictive.
   2. SoW seemed to favour the previous or incumbent supplier, due to key information not being included in the solicitation and therefore only being known by the previous or incumbent supplier.
   3. The scope of the work was viewed as too big when compared to the timeframes within which suppliers were expected to complete the work.

Tracking the most common procurement-related concerns raised to our Office is important. Not only does it provide valuable information to support our Educate and Facilitate efforts, it also provides important data to help determine the topics for procurement practices reviews.

Reviewing procurement practices

The Regulations provide the Procurement Ombudsman with the authority to review the procurement practices of federal organizations when reasonable grounds exist. A procurement practice review (PPR) is an in-depth and objective review of the procurement practices used for acquiring goods and services. The Procurement Ombudsman assesses the fairness, openness and transparency of the organization's practices and may make recommendations for their improvement. To determine what topics to review, OPO assesses all the information gathered to identify potentially systemic issues as well as those posing higher risks to fairness, openness or transparency. The Procurement Ombudsman can then launch PPRs in consequence to examine these specific issues.

The following are overviews of the two PPRs launched in 2015-2016, as well as a summary of the Follow-up Report for the 2012-2013 Procurement Practice Reviews completed in 2015-2016. The Regulations require that a PPR report be issued within one year from its commencement and, as such, the reports associated with the two PPRs launched in 2015-2016 will be published in 2016.

Review of processes used for the evaluation of bids

Combining the top two most common issues raised to OPO by suppliers in 2015-2016 and in two of the three preceding fiscal years, this review is examining:

1. the development of evaluation criteria;
2. the selection of the evaluation rating system; and
3. the choice of supplier selection method to determine the successful bid.

The review is also examining whether bids were evaluated in a manner consistent with the criteria and selection methodology specified in solicitations. The objective of this review is to determine whether organizations' bid evaluation processes are conducted in a manner consistent with applicable sections of the Financial Administration Act and regulations made under it, the Treasury Board Contracting Policy, and support the principles of fairness, openness and transparency.

Review of non-competitive contracting

Procurement strategy – in general terms, the approaches used by federal organizations to conduct their procurements – has consistently ranked as one of the top three most common issues raised by suppliers to OPO. Within Procurement strategy, non-competitive contracting was assessed by OPO as the topic with the highest potential risks. This review is examining:

1. the manner in which non-competitive contracts and non-competitive contract amendments were issued; and
2. whether contract splitting or repetitive contracting were occurring for non-competitive contracts, and whether controls were in place to prevent these practices from occurring.

The objective of this review is to determine whether non-competitive contracts and associated amendments are issued consistent with applicable sections of the Financial Administration Act and regulations made under it, the Treasury Board Contracting Policy, and support the principles of fairness, openness and transparency.

Follow-up review

Since the 2011-2012 fiscal year, the Office has conducted Follow-up reviews to determine what action federal organizations have taken in response to recommendations made in previous practice review reports. Follow-ups are important because they:

• Inform interested stakeholders of specific actions organizations have taken to improve procurement processes.
• Facilitate other federal organizations' ability to introduce similar improvements, where applicable, by sharing information on changes being implemented.
• Provide an indication of the usefulness of OPO 's reviews in strengthening federal procurement practices.

In 2015-2016, one Follow-up review was completed for two reviews performed in 2012-2013, both involving the Canada School of Public Service (CSPS):

• Review of Procurement Practices for the Acquisition of Temporary Help Services by the Canada School of Public Service, originally published in March 2013.
• Review of Procurement Practices for the Acquisition of Training Services by the Canada School of Public Service, published in June 2012.

The CSPS response identified it had implemented a series of measures to improve its procurement practices, including the development of a functional procurement plan and the establishment of a Procurement Review Committee.

The Follow-up reviews undertaken by the Office during the past 5 fiscal years indicate the majority of recommendations were implemented by federal organizations and most planned actions were near completion. In all cases, OPO found federal organizations exhibited a commitment to improving their procurement practices.

Date modified:

2018-11-01