Bidders need to pay close attention to the details of procurement documents
April 2018 | SPECIAL REPORT: INFRASTRUCTURE & PROJECT FINANCE
Financier Worldwide Magazine
April 2018 Issue
As the infrastructure market matures and participants become more familiar with the procurement methods and, in many cases, the template procurement documents used, it is easy to lose sight of the need to pay attention to the details of what is being requested and respond accordingly. As markets become more competitive, a project can be won or lost by small margins and ensuring that maximum points are achieved is vital. While it is tempting to focus only on pricing and the design development that drives that pricing, paying attention to the details of the request for proposal (RFP) remains essential. This article will examine recent cases in the Canadian International Trade Tribunal (CITT), where bidders thought they had responded clearly to the procurement documents, but found themselves disqualified for failing to pay attention to the details.
For example, most owners are keen to ensure that the individuals who will be responsible for the project are well qualified, understanding that the quality of such individuals can make the difference as to how smoothly the project proceeds. Bidders will strive to put forward employees who meet the requirements stated in the RFP. However, care must be taken to ensure that the proposal clearly identifies how those individuals meet the stated requirements.
In GBCA-MTBA v. Parks Canada Agency, Parks Canada issued a request for standing offer (RFSO) seeking architectural firms with strength in heritage conservation project work in Ontario. Bidders were required to propose a core architectural services team, with minimum qualifications for each role. After some clarification, GBCA-MTBA proposed a core team, including an individual for the role of ‘contract administrator/construction reviewer’. The requirements for this role were: “(p)ersons who have minimum six (6) years of construction inspection experience, including minimum three (3) years of direct construction supervision experience on heritage projects / built heritage projects with a cumulative construction value of least $3M”.
GBCA-MTBA proposed an individual who they indicated had been involved in a particular project since 2009. His work was described as: “[h]e reviews work on site, including extensive mockups, and prepares and issues contract administration documents related to the heritage restoration work. He is responsible for preparing regular reports for Parks Canada, and maintains the heritage database, which tracks the disposition of several thousand artifacts. In this role he works effectively as part of the contract administration team and coordinates regularly with the different disciplines that are part of the team.”
However, the CITT, agreeing with the evaluators, held that this description did not provide sufficient information to show that the individual met the requirements. While part of the description included construction inspection (in particular, “reviews work on site”), other parts related to other types of work (such as preparing reports and maintaining databases). More information was needed in order to show six years of “construction inspection experience”. Without that information, the CITT held that the evaluators were reasonable in disqualifying the bid.
The important point to note from this case is the need to spell out exactly how an individual’s experience meets the stated requirements. Simply saying that a person has been involved in a project is not sufficient – bidders must take the next step and show exactly what work that person has been doing and how that work satisfies the requirements in the procurement documents.
Another detail that has caused issues for bidders recently is submitting bids electronically. One such example is in 8146292 Canada Incorporated, where the bidder submitted its bid by fax, relying on the front cover of the RFP which set out the address for the submission of bids and also included a “bid fax number”. However, the detailed terms of the RFP provided that bids transmitted by facsimile would not be accepted. The CITT held that despite the confusion, the specific prohibition on submitting bids by fax overrode the inclusion of a fax number on the cover sheet. While showing sympathy to the bidder, the CITT was clear “that the integrity of the procurement system depends, to an important degree, on the timely receipt of complete bids at the place specified, and in the precise manner stated, in solicitation documents”.
Another example is in Secure Energy (Onsite Services) Inc. In this case the bidder, Secure Energy, submitted its tender in accordance with the ITT, but also submitted an electronic copy of its bid bond. The bidder admitted that this method of submission was contrary to the express terms of the ITT. However, the bidder argued that the owner should have waived the irregularity as it was a minor issue and the owner had reserved the right to waive minor irregularities.
The CITT held that as the failure to comply with the tender documents was a clear breach of a mandatory requirement, it was reasonable for the owner to have disqualified the bidder, even if the issue did not impact pricing. The CITT stated that “[i]f anything, the acceptance of Secure Energy’s bid over other fully compliant bids might be seen as undermining the principles of openness, good faith and fairness of the procurement process”.
From these cases, we can see again that bidders must read the procurement documents as a whole and not make assumptions as to how an owner will treat what might be seen as an error that goes to the form of the bid, as opposed to its substance. If there is any doubt, there is always the ability to ask questions and seek clarification during the procurement.
The final case shows the need to avoid including information with a proposal that is not strictly requested. In Bio-Rad Laboratories (Canada) Ltd., the bidder included its own terms and conditions of sale with its quotation for the work. By submitting a bid, the bidder had agreed to comply with the owner’s contract. The CITT found that by also submitting its own terms and conditions of sale, the bidder introduced confusion into its quotation. In places these terms and conditions were contrary to the terms of the RFP; as a result, their inclusion created uncertainty. It was therefore reasonable for the owner to reject the bid as it amounted to a counter offer. For example, the RFP required firm pricing, while the terms and conditions said that the quote was subject to final approval by the national sales office. The RFP also required prices to be inclusive of all customs duties, while the terms and conditions said that prices were exclusive of “all taxes, fees, licenses, duties or levies”. Consequently, uncertainty was introduced into the price proposed.
Overall, these cases remind us of the need to pay close attention to the details of the procurement documents. Check and check again as to what is being asked and what the formal bid requirements are, and provide consistent information. Make it easy for owners to evaluate your bid by being fully responsive.
Elizabeth Mayer is a partner and Antony Cortese is an associate at DLA Piper (Canada) LLP. Ms Mayer can be contacted on +1 (604) 643 6438 or by email: firstname.lastname@example.org. Mr Cortese can be contacted on +1 (604) 643 2980 or by email: email@example.com.
© Financier Worldwide
Elizabeth Mayer and Antony Cortese
DLA Piper (Canada) LLP