Docket: T-494-08
Citation:
2014 FC 933
Ottawa, Ontario, October 2, 2014
PRESENT: The
Honourable Mr. Justice Zinn
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BETWEEN:
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TPG TECHNOLOGY CONSULTING LTD.
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Plaintiff
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and
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HER MAJESTY THE QUEEN
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Defendant
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JUDGMENT AND REASONS
TABLE OF CONTENTS
I. Introduction
[1]
TPG Technology Consulting Ltd. [TPG] provided
information technology services, specifically engineering and technical support
[ETS] services to the Information Technology Services Branch [ITSB] of Public
Works and Government Services Canada [PWGSC]. It did so from 1999 to 2007
under a contract [ETS 1].
[2]
In 2006, PWGSC issued a Request for Proposal
[RFP] with respect to the ETS services to be provided to ITSB following the
expiration of ETS 1. It specifically stipulated that it represented a “new
articulation” of the required services and that those who had previously
provided ETS services should not assume that its existing capabilities met the
requirements of the RFP:
Bidders who have previously satisfied this
requirement or similar requirements, in particular, should note that this
solicitation represents a new articulation of the requirement and no Bidders
should assume that past practices will continue, except to the extent that they
have been expressly articulated in this solicitation, or that the Bidder's
existing capabilities meet the requirement simply because they have met
previous requirements.
[3]
Three companies submitted proposals in response
to the RFP: TPG, IBM Canada Ltd. [IBM], and CGI Group Inc. [CGI]. The RFP
provided that the bidder who submitted a compliant bid and had the highest
combined technical and financial ratings would be the successful bidder [the
Contractor] and would be awarded the next contract [ETS 2]. TPG in this action
complains only of the assessment of its technical proposal. CGI was successful;
TPG and IBM came second and third respectively.
[4]
TPG seeks damages from the Crown for an alleged
breach of contract arising out of the RFP. TPG alleges that PWGSC breached its
duty of fairness in the evaluation of its bid for ETS 2. It also alleges that
the winning bid by CGI was non-compliant, that the Crown knew or ought to have
known that the bid was non-compliant, and ought to have either disqualified the
bid, or terminated the contract upon non-performance by CGI.
[5]
The value of the lost contract including the
option years was approximately $428 million. TPG claims damages in the amount
of $250 million.
II. The Law
Relating to Procurement
[6]
The fundamental principles of procurement law
are set out in a series of four decisions of the Supreme Court of Canada: Ontario
v Ron Engineering & Construction (Eastern) Ltd, [1981] 1 S.C.R. 111 [Ron
Engineering]; M.J.B. Enterprises Ltd v Defence Construction (1951) Ltd,
[1999] 1 S.C.R. 619 [M.J.B.]; Martel Building Ltd v Canada, [2000] 2
SCR 860 [Martel Building]; and Double N Earthmovers Ltd v Edmonton
(City), [2007] 1 S.C.R. 116 [Double N Earthmovers].
[7]
The fundamental legal principles expressed in
these authorities that are relevant to this action and upon which this Judgment
is rendered, are the following:
1.
Where a RFP is issued and a party responds with
a proposal, a contract forms between the party issuing the RFP and the party
responding to it. This contract (Contract A) is said to “come into being forthwith and without further formality.”
2.
The principal term of Contract A is that the
proposal of a responding party is irrevocable and the parties have a mutual
obligation to enter into a contract (Contract B) upon acceptance of the
proposal.
3.
The RPF document(s) provide the other express
terms of Contract A.
4.
Contract A may also contain implied terms.
5.
One implied term of Contract A is that only a
proposal that is compliant with the terms of the RFP will be accepted. It is
no defence to a claim that a non-compliant bid was accepted to say that the
acceptance was made in good faith or was based upon what was believed to be the
correct interpretation of the contract.
6.
Contract A contains an implied obligation
to treat all those who respond “fairly and equally.”
7.
Contract A contains an implied obligation to
assess competing proposals on the same terms and conditions and not to rely on
a criterion that has not been disclosed to those who have responded.
8.
Other terms may be implied in Contract A based
upon the presumed intention of the parties where necessary “to give business efficacy to a contract or as otherwise
meeting the ‘officious bystander’ test as a term which the parties would say,
if questioned, that they had obviously assumed.”
III. The RFP
[8]
The RFP was issued by PWGSC on May 5, 2006 and
closed on September 5, 2006. Between May 31, 2006 and June 24, 2006, PWGSC
responded to 206 questions from bidders. Some questions sought clarification
of ambiguous aspects of the RFP. Others described perceived unfairness as a
result of the structure of the RFP, or the wording of specific sections. As a
result of this question and answer process, 24 solicitation amendments were
issued. These amendments were incorporated into the RFP and were binding on
both PWSGC and the bidders. Throughout these Reasons reference to passages in
the RFP is to the RFP as amended by the solicitation amendments, entered at
trial as Exhibit P-6.
IV. Express Terms of
Contract A in the RFP for ETS 2
A. Requirements Stated in the RFP
[9]
Each requirement set out in the RFP was
identified to be a mandatory requirement, a rated requirement, or both. The
RFP specified: “Proposals must comply with each and
every mandatory requirement. If a proposal does not comply with a mandatory
requirement, the proposal will be considered non-compliant and be
disqualified.” TPG alleges that at least one mandatory requirement was
not fulfilled by CGI, to the knowledge of PWGSC, and therefore its proposal
ought to have been rejected as non-compliant.
[10]
Rated requirements were those which would be
assessed “in accordance with the evaluation
methodology” described in the RFP. TPG alleges that the evaluators
unfairly marked its proposal in 9 of the many rated requirements: Namely,
2.2.3.1, 2.3.1.1, 2.3.1.2, 2.3.1.4, 3.1.4, 3.3.3, 3.3.5, 3.4.2, and 3.6.1,
attached as Annex A. At trial, TPG led evidence only with respect to the
rating of requirements 3.3.3 and 3.3.5.
B. The Work
[11]
The Work, as defined in the RFP, was to provide
ETS services. The majority of these services were to be provided by the
Contractor’s resources directly to ITSB [ITSB Dedicated Services]; however,
some services, as in the past, would be provided by resources dedicated to
clients of PWGSC such as Transport Canada and the Canadian Intellectual
Property Office [Client Dedicated Services]. Article 2 of Part A of the RFP described
the Work as follows:
The Contractor shall perform the Work
specified in Annex A, Part I, II and III of the Statement of Requirement (SOR),
which describes the requirement for the following types of services:
a)
Enterprise Server Domain - various engineering and technical support services
in support of large mainframe computers;
b) Cross Platform and Network Domain
- various engineering and technical support services in support of UNIX and NT
Servers; and
c) Support Services Domain - various
general support services delivered in the two domains above and to other areas
of ITSB, including a Client Dedicated Resource Requirement.
The Contractor will be responsible
for Functions work that is comprised of services from specified resources on an
on-going basis for the Contract Period, and Project Work that will be
implemented on an "as and
when requested" basis through Task
Authorizations (TAs).
C. The
Resources
[12]
The RFP spoke of the “resources”
to be used to provide the ETS services. By this is meant the staff
(individuals, employees or contractors) retained by the Contractor to provide
the contracted services.
[13]
When TPG provided services under ETS 1, it did
so using approximately 150 resources, who were subcontractors to TPG. The
Statement of Requirements (Annex A, Parts II and III) annexed to the RFP and
referenced in Article 2 of Part A of the RFP listed the “staffing requirement” for the ITSB Dedicated Services
and Client Dedicated Services. In the initial RFP these totalled 145 staff;
however, in the RFP amended by the 24 Solicitation Amendments (Exhibit P-6), it
was increased to 159 staff, comprised of 133 providing ITSB Direct Services,
and 26 providing Client Dedicated Services.
[14]
A substantial component of this litigation
focuses on one mandatory requirement, Article A.24 of the RFP, headed “Status of Resources” which reads as follows:
By submitting a proposal, the Bidder is
certifying that either:
(i) all the individual resources proposed
are employees of the Bidder: or
(ii) in the case of any individual proposed
who is not an employee of the Bidder, the Bidder is certifying that it has
written permission from such person (or the employer of such person) to propose
the services of such person in relation to the work to be performed in
fulfillment of this requirement and to submit such person's resume to the
Contracting Authority in connection with this solicitation. During the bid
evaluation, the Bidder must upon the request of the Contracting Authority
provide a copy of such written permission in relation to any or all
non-employees proposed. Failure to comply with such a request may lead to
disqualification of the Bidder's proposal.
[15]
Bidders were not required to name all of the
resources that it was proposing to use if its proposal was selected. Annex D-1
to the RPF, the Evaluation Criteria Matrix [ECM], made it a mandatory
requirement that a bidder provide information on ten named individuals as
example resources:
ITSB
recognizes that over the course of its contract with the Contractor, the
specific resources that are supplied to deliver services to ITSB will change,
as individuals move and progress in their careers. Accordingly, ITSB does not
intend to examine and evaluate all individuals that the Bidder proposes to
provide to satisfy the initial Function, Client Dedicated, and Task
Authorization requirements defined in this RFP. However, ITSB will evaluate
ten (10) resources as an example of the resources that the Bidder is able to
supply.
[16]
The Crown takes the position that the mandatory
requirement in A.24 applies only to these ten specifically identified
resources. As will be discussed in detail below, TPG interprets A.24
differently and argues that CGI's proposal was not compliant with this
requirement.
D. Transition
[17]
Article B.10.3 of the RFP, the model contract
which the Contractor would execute, provided that “the
Contractor is required to plan, manage, and execute an effective transition of
ETS services from the existing resources to the Contractor’s resources and a
management structure provided by the Contractor.” That Article further
provided, subject to possible extensions, that the Contractor was to meet with
ITSB within five working days after the contract was entered into to review the
Transition Plan submitted, to adjust it as necessary, and to submit a finalized
Transition Plan within five days following that initial review. The successful
bidder was then to “begin to deliver services according
to the requirements in this RFP no later than 60 working days following the
acceptance of the Transition Plan.” TPG alleges that CGI was also
non-compliant with these requirements.
E. Framework
for Compensation
[18]
ETS 1 provided that the services rendered would
be compensated on a level of effort basis, i.e. on the basis of a set daily or
monthly rate, but it was also understood that the basis of payment could change
such that TPG would be paid in terms of deliverables or result.
[19]
This latter mode of compensation was described
at trial as performance based service delivery or results based service delivery.
For consistency, this compensation framework shall be referred to in this
Judgment as a results based framework. In a results based framework, one is
compensated based on the result achieved, regardless of the time or effort
required to achieve that result. It is agreed that the compensation framework
of ETS 1 never evolved from level of effort to a results based framework.
[20]
Article 4.6.5 of the RFP specified that the
successful bidder would be required to transition from a level of effort framework,
to a results based framework, soon after being awarded ETS 2.
At the outset of the Contract all services
shall be provided by the Contractor on a "level of effort" basis.
Where and when deemed applicable by ITSB, the Contractor may establish with ITSB
an evolving basis of payment for various services through which the Contractor
will be paid in terms of deliverables or results.
This will result in a scalable basis of
payment for a given Function or Project such that the actual amount paid,
during any period, will be based on the volume of services and/or deliverables
provided. It is also anticipated that the Contractor will be provided with a
high degree of flexibility with respect to how the services are provided and
will only be constrained by the acceptability of the deliverable and service
levels. This will provide ITSB with improved results-oriented costing.
ITSB will not undertake any such initiative if the resulting service
is more expensive than the provision of the service in accordance with the
previous basis of payment or where the initiative will result in increased risk
to ITSB. The migration to "Results Based Services" will only take
place when a Business Case is approved by ITSB.
Unlike what occurred with ETS 1, the
evidence at trial was that the compensation arrangement in ETS 2 did migrate
from a level of effort framework to a results based framework. It would appear
that this may not have been the success the government hoped for as Dominique
Gagnon advised the Court that the RFP for the next contract, which has been or
soon will be released, will provide for compensation on the basis of level of
effort, as had been done with ETS 1.
F. Contract
Period
[21]
The model contract incorporated as part of the
RFP provided that the contract would be effective from the date it issued for
an initial period of three years. It also provided that the period could be
extended at the option of the Crown by four one-year periods.
[22]
The contract the Crown entered into with CGI
issued on October 31, 2007, and it was extended for the full extent permitted.
It will end on October 31, 2014.
V. Other Relevant
Events Prior to the Evaluation
[23]
In June 2006, prior to submitting its proposal,
TPG entered into an agreement with most if not all of its subcontractors on ETS
1 [Authorization to Bid Agreement]. The Authorization to Bid Agreement had two
key provisions. First, the subcontractor, either directly or through his or
her company, agreed not to “offer services to, or
assist in any way, another entity that is competing with TPG” on the
RFP. Second, TPG agreed that if it was the successful bidder on the RFP,
subject to the approval of PWGSC, it would contract with the subcontractor to
provide services under ETS 2.
[24]
Initially, the Authorization to Bid Agreement
provided that it would end on the first of (i) TPG fulfilling its promise to
enter into a subcontract for ETS 2, (ii) December 31, 2007, (iii) four months
after the completion of the transition from ETS 1 to ETS 2, and (iv) PWGSC not
approving TPG entering into the subcontract for ETS 2. Subsequently, in June
2007, the Authorization to Bid Agreement was amended to provide that the
parties’ obligations continued until the latest of the four events, rather then
the first of them.
[25]
Mr. Powell testified in chief that TPG had two
reasons for entering into the Authorization to Bid Agreement: (1) “we knew who we could provide at the time that the contract
was awarded, that we would actually have the people to do the work,” and
(2) “we believe[d] that no matter how things turned
out, we would all be in a stronger position as a team rather than
individually.” In cross-examination, he frankly admitted that these
agreements also put TPG in a stronger position vis-à-vis others bidding for ETS
2:
Q. Of course. You locked them up so they
can't commit to work with CGI during the bid process, right, during the RFP
process; that's number one?
A. Right.
Q. You lock them up so they can't commit to
CGI during the transition process, which is you, and I have talked about is
when CGI is to deliver the names of the resources.
A. Right.
Q. And so that helps you competitively in
the bid to win?
A. Absolutely.
Q. But then you lock them up for 4 months
after that.
A. So if in fact CGI, as I said, had been
even slightly ethical, they would have called me and said, "Let's work out
a deal. We haven't got the people." And then Mr. Fleming and everybody
else would have been far better off than dealing with CGI directly, so that was
a benefit to them, a benefit to me.
[26]
In addition to these agreements, TPG also came
to an agreement with IBM – one of the other bidders. That agreement permitted
both parties to bid some of the other’s subcontractors. This increased the
opportunities for both companies to participate to some degree on the new
contract should either of them win the bid.
VI. The Evaluation
of the Technical Proposals
[27]
Between September 12 and 27, 2006, PWGSC
conducted a technical evaluation of the proposals, facilitated by Mr. Robert
Tibbo of Partnering and Procurement Inc. [PPI]. PPI guided the evaluation
process. Mr. Tibbo’s role was to ensure fairness in the process. Mr. Tibbo
had assisted in developing the RFP itself, working closely with Mark Henderson,
Director, Administrative Services and Contract Management, Business Planning and
Management Services, ITSB, PWGSC, and Pierre Demers, a manager who reported to
Mr. Henderson. Mr. Tibbo also assisted in developing answers to the questions
posed by the bidders.
[28]
The technical evaluation was conducted by a team
of five evaluators: Mr. Bartlett, Mr. Bezanson, Mr. Boudreault, Mr. Swimmings,
and Mr. Verma. These evaluators worked within various departments of ITSB and
brought diverse experience and expertise to the team.
[29]
The evaluation was conducted in two phases:
first, the evaluators evaluated the individual bids independently. Then there
was a consensus meeting where the individual scores were discussed and
discrepancies were resolved by way of discussion among all five evaluators,
leading to a single consensus score.
[30]
In the individual phase, each evaluator was
given an order in which to evaluate the bids that was independent of the others
in order to reduce the potential for bias as a result of which bid was
evaluated first, second, or last. At the consensus meetings the bids were evaluated
in alphabetical order: CGI, IBM, and then TPG.
[31]
At the kick-off meeting before the start of the
individual evaluations, the entire evaluation process was explained to the
evaluators, including the progression from the individual evaluation stage to
the consensus stage. The evaluators were instructed to: (1) read the RFP; (2)
read a proposal in its entirety; (3) re-read and score that proposal; and (4)
repeat steps 2 and 3 for the other two bids.
[32]
The evaluators were given binders with scoring
sheets to record their score for each of the criterion, and there was a section
for the evaluator to provide comments. A description of each and the basis for
its evaluation from the RFP itself were listed. For each mandatory criterion,
there were boxes that the evaluators were to check off labelled “yes” or “no” to
indicate compliance. For a rated criterion, there was a box for the evaluator
to record the score, and the range of possible scores was indicated in brackets
to the right of the box.
[33]
At the kick-off meeting, evaluators were told to
keep in mind that during both the individual and consensus sessions, they
should consider that a losing bidder would expect a “justifiable
reason for the assigned score that any other reasonable person would concur
with,” for any instance in which “the proposal
did not receive the maximum rated points available.”
[34]
Evaluators were also given a code of conduct and
instructed not to discuss any of the evaluation process or the results with
anyone outside of the team. During the evaluation, the evaluators attended at
the MacDonald Cartier Data Centre. The evaluators were seated in the same room
with all of their materials during the evaluation process; however, there was
no discussion (other than to ask questions at scheduled progress meetings)
during the individual phase of the evaluation. None of the evaluators’
materials left the room until the entire evaluation was completed.
[35]
During the first three days of the individual
evaluation stage (September 13-15), there were meetings where the progress of
each evaluator was noted and identified issues were discussed. After September
15, no further issues were identified. Progress meetings continued to be held,
but only to monitor the progress of the evaluation.
[36]
After all of the evaluators had completed their
individual evaluations of each of the bids, the evaluation moved to the
consensus phase. At this stage, Mr. Tibbo led the team through each of the
bids, criterion by criterion and a single consensus score was reached for
each. This score was recorded in a master record which was displayed on a
screen for the evaluators to see as the consensus meeting progressed. Where
there was no discrepancy between the scores of the individual evaluators,
little or no discussion ensued. Where there was a discrepancy, Mr. Tibbo led
the evaluators in a discussion of the results and the group arrived at a score
on which all of the evaluators agreed. This score was displayed on screen and
a paper backup copy was maintained by Mr. Tibbo. In most instances, the
individual evaluators also recorded the consensus score in their individual
scoring sheets.
[37]
During consensus, each bid was evaluated start
to finish before moving on to another bid. No bid was explicitly compared to
any other bid at any time.
[38]
The entire technical evaluation process ended on
September 27, 2006. The master copy of the consensus scores was printed out on
October 2, 2006 and provided to Mr. Hamid Mohammad, the Contracting Authority
for PWGSC.
VII. Post-Technical Evaluation
[39]
Following the technical evaluation, there was a
meeting on October 27, 2006 with Hamid Mohammad and the evaluators to discuss
the results of the evaluation and to clarify issues raised by Mr. Mohammad with
the substantiation of some of the scores. During this meeting the evaluators
provided some comments supporting their scores but at no time were any of the
scores changed.
[40]
Following the technical evaluation, the
financial component of the evaluation was completed on November 9, 2006. No
one involved in the technical evaluation was involved in the financial
evaluation.
[41]
On February 26, 2007, TPG first became aware
that CGI was the winning bidder and was to be awarded the contract for ETS 2.
VIII. CITT Complaints
[42]
Between March 23, 2007, and October 31, 2007,
TPG launched four complaints with the Canadian International Trade Tribunal
[CITT] alleging: unfairness and reasonable apprehension of bias (complaint 1
filed March 23, 2007), alteration of evaluation methodology after bid closing
(complaint 2 filed June 27, 2007), unfair process and reasonable apprehension
of bias in the evaluation of the bids (complaint 3 filed August 29, 2007), and
failure to conduct the evaluation in accordance with the RFP in relation to
reference checks (complaint 4 filed October 5, 2007).
[43]
The first complaint was rejected as being
time-barred: [2007] CITT No 21, April 3, 2007. The Federal Court of Appeal
ultimately allowed TPG’s application for judicial review, but it was determined
that TPG’s complaint was premature.
[44]
The second complaint was found to be valid:
[2007] CITT No 91, November 2, 2007. The CITT found that the evaluation
methodology had been changed after bidding closed for seven requirements:
1.3.2.4.11.4, 1.3.2.11.10, 1.3.3.4.11.4, 1.3.3.4.11.10, 1.3.4.2.11.4,
1.3.4.2.11.10, and 3.6.3. It found that the evaluators had allotted scores of
0, 1, or 2 for those seven requirements despite 0 or 2 being the only
permissible scores. However, no remedy was recommended because the changed
methodology was applied equally to all 3 proposals and because even if one
scored TPG’s proposal most favourably and CGI’s proposal least favourably, the
ultimate result did not change. The CITT also determined that there was no
indication that PWGSC did not correctly follow the appropriate respective
rating scheme for any other requirements.
[45]
The third complaint was rejected without the
tribunal conducting an inquiry: [2007] CITT No 108, September 12, 2007. In
its view, the issues raised had already been dealt with in TPG’s first
complaint, and there was no reasonable basis for alleging bias or a conflict of
interest.
[46]
The fourth complaint was rejected on its
merits: [2007] CITT No 116, December 20, 2007. The CITT found that PWGSC was
required to check the references of all bidders to determine whether the
mandatory requirements had been met, but that it was not unreasonable for PWGSC
to check the references in the manner it did. There was nothing in the RFP
that described how or when the reference check should have been performed,
other than requiring that the references be checked before the contract was
awarded.
IX. Transition
[47]
The new contract was officially awarded to CGI
on October 31, 2007. Letters informing both IBM and TPG of the contract award
were sent on November 5, 2007.
[48]
As required by ETS 2, CGI submitted its
transition plan dated November 15, 2007. The plan was revised following
feedback and the final transition plan was ultimately accepted on November 28,
2007, marking the start of the transition period.
[49]
ETS 1, the contract with TPG, ended on December
21, 2007.
[50]
ETS 2 provided CGI with 60 working days to
complete the transition of all functions, with the option for up to three, 15
calendar day extensions. Two extensions requested by CGI were granted by
PWGSC. CGI completed the transition of all functions on March 26, 2008.
X. History of
this Litigation
[51]
In 2008, TPG commenced this action for damages.
The claim as then constituted was based on allegations relating to the RFP and
the hiring of TPG’s subcontractors by CGI. TPG claimed damages for breach of
contract, inducing breach of contract, intentional interference with economic
interests, and negligence.
A.
Motion for Summary Judgment
[52]
In March 2010, the Crown filed a motion for
summary judgment. Justice Near granted the motion and dismissed the claim in
its entirety: TPG Technology Consulting Ltd v Canada, 2011 FC 1054 [TPG
v Canada No 1 FC]. That decision was reversed by the Federal Court of
Appeal on the basis that the motion judge misapplied the test for summary
judgment: TPG Technology Consulting Ltd v Canada, 2013 FCA 183 [TPG
v Canada No 1 FCA].
[53]
The Federal Court of Appeal was of the
view that the motion judge failed to appreciate that the claim for breach of
contract was based not only on allegations of bias and inexplicable changes to
the evaluations but, in substance, on an allegation that the bids were not
fairly evaluated. Contrary to the motion judge’s finding, the Court of Appeal
concluded that the evidence adduced “did not squarely
answer all questions about the fairness of the evaluation process.”
[54]
The motion judge, relying on Double N
Earthmovers concluded that events that occurred during the transition could
not form the basis of a breach of contract claim by TPG. The Federal Court of
Appeal took the view that this finding was based on a misapprehension of the
claim of TPG. In its view, the claim of TPG was that the Crown breached the
RFP in failing to declare that CGI’s bid was non-compliant because, to the
knowledge of the Crown, CGI had failed to accurately certify that the persons
to perform ETS 2, were its employees or persons who had consented to being
named by CGI. In the opinion of the Federal Court of Appeal, TPG was relying
on events that occurred during transition to prove this non-compliance by CGI.
It found that the RFP was ambiguous and therefore the “merits
of TPG’s proposed interpretation cannot be determined in the absence of a full
evidentiary record.”
[55]
After it was awarded ETS 2, CGI actively
recruited the resources who were then working for TPG on ETS 1. Each had
executed an Authorization to Bid Agreement agreeing that they would not work on
ETS 2, except for TPG, for sometime following the transition. TPG alleged that
the Crown induced these persons to breach this retention agreement and accept employment
with CGI. The motion judge, on the basis of Double N Earthmovers, found
that once the contract was awarded to CGI, the Crown’s obligations to TPG were
discharged and the claim was not sustainable. The Federal Court of Appeal
described this as a “relatively weak claim” but
found that it involved no additional evidence from the breach of contract claim
and thus ought to be permitted to proceed.
[56]
Lastly, the motion judge dismissed the
claims in tort for inducing breach of contract, unlawful interference with
economic interests, and negligence on the basis that there was no evidence to
support them. The Federal Court of Appeal found that these “claims appear to be substantially weaker than the claims in
contract, but they too are based largely on the same factual allegations … [and
there is] no practical reason at this stage not to permit them to continue to
trial if TPG is so advised.”
[57]
The motion judge made one other important
finding that was not the subject of the appeal. He dismissed the submission of
the Crown that TPG was precluded from bringing the action on the basis of the
doctrine of res judicata, or issue estoppel. The Crown submitted that
these doctrines applied because of the four previous CITT complaints filed by
TPG against the Crown relating to the RFP. The Crown asserted that these
complaints challenged the fairness of the evaluation and awarding of ETS 2 to
CGI, the very issues raised in the litigation.
[58]
The motion judge stated that although he found
some merit to the Crown’s submission, he was “not
comfortable granting a summary judgment to the Crown on the basis of issue
estoppel without examining the submitted evidence.” He also dismissed
the submission that the action was precluded by cause of action estoppel, or res
judicata, because:
TPG could not have, and it cannot be said
that TPG should have, raised all of the causes of action that constitute the
present litigation before the CITT. TPG’s present action is based on breach of
contract (for which I would be more likely to accept the res judicata
argument) and tort, including the tort of inducing breach of contract, unlawful
interference with economic interests, and negligence. The tort claims could
not have been raised before the CITT, for the CITT clearly does not have the jurisdiction
to deal with them. TPG’s position with respect to the breach of contract claim
is much weaker since the obligations of the contract that TPG argues existed
between itself and the Crown consist almost entirely of the duty to deal
fairly. This issue was essentially before the CITT. However, TPG submits that
all of the facts relating to the evaluation of the bids were solely in the
possession of the Crown, and were not obtained by TPG until 2008, after the
complaints to the CITT. I accept TPG’s submission that in this respect, TPG
relies on “fresh” evidence that was not capable of being discovered at an
earlier stage.
B.
Consent Order Restricting Claim
[59]
An Order issued on February 19, 2014, by the
Case Management Prothonotary, on consent, “in consideration
for the trial commencing prior to September, 2014” [Consent Order]. The
Consent Order provided that the trial was set down for 25 days beginning on May
12, 2014. TPG agreed to limit the action to its claim that the Crown had
breached Contract A. Fresh as Amended pleadings were filed by the parties.
The Consent Order reads, in relevant part, as follows:
[T]he following claims have been formally
withdrawn by the Plaintiff, with prejudice, and shall form no part of the
allegations against the Defendant, notwithstanding any ambiguous language in
the pleadings that may be capable of a contrary interpretation:
(i) all allegations of conflict of
interest;
(ii) all claims for punitive damages;
(iii) all allegations of negligence;
(iv) all allegations of bad faith,
including all claims of misconduct, bias, fraud or unconscionability;
(v) all allegations related to
process as it relates to the evaluation of the TPG Technology Consulting Ltd.
(“TPG”) bid;
(vi) all allegations that the RFP was
drafted, or re-drafted, to favour CGI or prejudice TPG; and
all allegations that the Defendant induced a
breach of contract or interfered with the Plaintiff’s economic interests.
XI. Witnesses
at Trial
[60]
TPG called six fact witnesses (Donald Powell,
Stan Estabrooks, Brian Fleming, Valerie Bright, David Watts, and Perry
Henningsen) and two expert witnesses (Tom McIlwham and Greg McEvoy). Following
a voir dire, the court made the following ruling regarding the scope of
evidence and qualifications of Mr. McIlwham:
I am satisfied, based on the evidence
adduced in the voir dire, that Mr. McIlwham through experience in the
implementation, delivery and management of IT services for roughly 40 years has
gained specialized knowledge and the court qualifies him as an expert in
performance metrics and Service-Level measures for IT services, and as such, he
may provide opinion evidence on the following: One, what "performance
metrics" and "Service Level measurements" are understood to be
in the IT industry; two, the application of performance metrics and
Service-Level measurements to Service-Level contracts; and three, whether the
performance metrics and Service-Level measurements proposed by the Plaintiff
were relevant and could reasonably be expected to be used by ITSB in the
Service-Level contractual framework.
[61]
The Crown called 10 fact witnesses (Mark
Henderson, Robert Tibbo, Don Bartlett, Vikas Verma, Jim Bezanson, Louis
Boudreault, Paul Swimmings, Michele Charette, Dominique Gagnon, and Luc
Boileau) and one expert witness, Dave Clarke.
[62]
Both Mr. McEvoy and Mr. Clarke are chartered
accountants and chartered business valuators and were both qualified as experts
in business valuation and damages quantification.
[63]
There were occasions when a witness was
argumentative or evasive; however, all of the witnesses, except Luc Boileau,
were found to be generally credible. Mr. Boileau’s credibility was damaged
when he repudiated some, but not all of the express words written by him in his
notebook with the explanation that notwithstanding what he wrote, it was
merely an aide memoire to say the exact opposite of what he had written:
As I said, this is to remind me, right? I'm
very busy. I write stuff without thinking. As long as I have a word or two that
reminds me what I should say, then I talk about it, but don't take my notes as
being black and white.
I do not accept that explanation. It flies
in the face of common sense and logic that one would write entries that express
exactly what one intends and others that express exactly the opposite of what
one intends - all in the same record and made on the same day.
[64]
The five evaluators each testified and did their
best to recall the events and discussions that occurred some eight years
before. Each appeared proud of the work he did in the evaluation process and
accordingly, on occasion, bristled when it was suggested that he had failed in
that task. Such a response is not unexpected. Similarly, it was not
unexpected when Mr. Powell, who has spent a considerable amount of time and
money in this litigation, occasionally offered a strong opinion on the
deficiencies of the process.
[65]
The consensus sessions which formed a great part
of the evidence was attended by the evaluators, Mr. Tibbo who acted as the
facilitator, and Mr. Henderson. The uncontradicted evidence was that Mr.
Henderson took no part in these sessions, except to be present. He testified
that his role was to “oversee the process.” He
was the senior executive primarily responsible for the RFP and its resulting
contract. In fact, he retired the very day he recommended to Treasury Board
that ETS 2 be accepted by the government. Because he had no direct involvement
in the consensus process, the Court prefers the evidence of the five evaluators
over his evidence where there is any disagreement.
[66]
The evidence of the five evaluators differed
from time to time on minute detail; however, on the broad picture, their evidence
was largely consistent.
[67]
In the end, given the Court’s interpretation of
the RFP, and conclusions on the issues raised, much of the evidence presented
was not relevant. Neither party could have known that at the commencement of
trial.
XII. Issues To Be
Determined
[68]
The following questions arise in the action as
now framed:
1.
Does the CITT have exclusive jurisdiction to
hear and determine TPG’s complaint and, if so, is this a complete defence to
this action?
2.
Was TPG’s proposal evaluated unfairly?
3.
Was CGI’s bid non-compliant, and if so, did the
Crown have an obligation to disqualify it or terminate the contract it had been
awarded?
4.
If TPG is entitled to damages, what is the
appropriate quantum?
XIII. CITT as a Defence
to the Action
[69]
For the reasons that follow, judgment must be
awarded in favour of the Crown. The Federal Court has concurrent jurisdiction
with the CITT in actions against the Crown related to procurement matters;
however, in this case, the Court will decline to exercise that jurisdiction.
The CITT is a specialized tribunal dealing specifically with government
procurement issues and it has a wide discretion in terms of available
remedies. The appropriate recourse in the Federal Court, given the limited
scope of the action as now constituted, is judicial review of a decision of the
CITT on the breach of Contract A issues raised herein.
A.
Jurisdiction of the CITT
[70]
The Crown’s primary defence is that the CITT has
exclusive jurisdiction to deal with TPG’s allegations in this action. The CITT
derives its powers from the Canadian International Trade Tribunal Act, RSC
1985, c 47 (4th Supp) [CITT Act] and the Crown submits that Parliament intended
it to be a complete and exhaustive statutory code for dealing with procurement
complaints. The Crown points out that the Federal Court of Appeal has
determined that the CITT is a specialized administrative tribunal with
expertise in procurement matters and that recent decisions from the CITT
address allegations similar to those raised by TPG in this case.
[71]
TPG responds that Justice Near in TPG v
Canada No 1 FC has already determined that the CITT does not have exclusive
jurisdiction to resolve disputes regarding allegedly unfair or improper
procurement processes, particularly where the cause of action is breach of
contract or tort. It points out that the Crown did not appeal that part of his
decision to the Federal Court of Appeal. It submits that the issue of the
jurisdiction of the CITT as a complete defence to this claim is res judicata:
It has already been decided.
[72]
The Crown replies that the issues in the
litigation differ substantially from those when the matter was before Justice
Near. Specifically, it notes that there are no longer any claims of tort or
bad faith; the action has been narrowed solely to a claim for breach of
Contract A. Additionally, it says that TPG had all of the information it
needed with respect to the current allegations by February 26, 2008, when it
received all of the scoring sheets and the list of the criteria where CGI’s
winning proposal obtained a higher score than TPG and the rationale for those
results. It submits that TPG could and should have brought a complaint to the
CITT at that time rather than instituting a claim in the Federal Court. The
Crown submits that failing to engage with the more efficient CITT process has
delayed the adjudication of the claim until the eve of the end of ETS 2. This,
the Crown asserts, puts it in a position where it may have to pay both CGI and
TPG when the claim could have been resolved much sooner, potentially reducing
its liability.
B. The Effect of TPG v Canada No 1 FC
[73]
As noted above, the issues before this Court are
much narrower in scope than those before Justice Near in TPG v Canada No 1
FC. He found that the facts of the action, as it was then constituted, did
not fall within the jurisdiction of the CITT because TPG was alleging “causes of action not provided for under the CITT Act.”
He further found that the causes of action then alleged had no adequate
alternative remedy other than a suit in the Federal Court. As a consequence,
the principle that the Court should not assume jurisdiction if there is an
adequate alternate remedy provided by statute did not apply.
[74]
Justice Near also noted that the CITT Act does
not expressly state that no civil proceedings lie against the Crown, whereas in
other statutes that intention is made explicit. Finally, he noted that the
CITT itself has held that issues of “contract
administration or contract performance do not fall within its jurisdiction;”
rather, its primary function is to determine compliance with Canada’s
obligations under specific international and domestic trade agreements, not the
resolution of common law claims against the Crown.
[75]
While I agree with many of Justice Near’s
observations, in my view, where the only claim being raised is a breach of
Contract A because of unfairness in the procurement process and the acceptance
of a non-compliant proposal, the Federal Court should defer to the CITT which
has jurisdiction to deal with both.
C.
Framework for Determining Jurisdiction
[76]
The analytical framework for determining issues
of jurisdiction in the administrative context was recently set out by the
Federal Court of Appeal in Assoc des compagnies de téléphone du Québec Inc v
Canada (Attorney General), 2012 FCA 203, [2012] FCJ No 1162 at paras 26-29
[Assoc]. In that case, the appellants brought a motion in the Federal
Court of Appeal to stay an order of the Canadian Radio-television and
Telecommunications Commission [CRTC], pending an appeal of its decision to the
Governor in Council, without bringing an appeal on the merits to the Federal
Court of Appeal. While the context of Assoc differs from that here, the
arguments addressed by the Court are similar to those raised in this case in
that the respondent argued that there was an adequate alternative forum.
[77]
The Federal Court of Appeal stated that one must
ask three questions. First, does the Court have jurisdiction such that it can
consider the matter placed before it? Second, are there any discretionary bars
against exercising jurisdiction (such as adequate alternative relief or the
existence of another forum which possesses superior expertise)? Third, what
result should the Court reach on the merits? That is the framework within
which the Crown’s defence will be assessed.
D.
Does the Court have jurisdiction such that it
can consider the matter placed before it?
[78]
The Crown accepts that that the Federal Court
has jurisdiction over the action as framed. Section 17 of the Federal
Courts Act, RSC 1985, c F-7 vests the Federal Court with “concurrent original jurisdiction in all cases in which
relief is claimed against the Crown,” except as otherwise provided in
other sections of the Federal Courts Act, or any other Act of
Parliament. There is nothing in the CITT Act which explicitly ousts the
concurrent original jurisdiction of the Federal Court in relation to
proceedings against the Crown – the Crown concedes as much. This is similar to
what the Federal Court of Appeal concluded on the facts in Assoc. Consequently,
the question is whether this Court should nevertheless decline to exercise that
jurisdiction.
E.
Are There Any Discretionary Bars against
Exercising Jurisdiction
[79]
The Crown submits that the Court should decline
to exercise its jurisdiction in CITT matters related to procurement. In its
view, despite the absence of an explicit ouster of jurisdiction in the
legislation, it can be inferred that Parliament intended that the CITT be a
complete and exclusive body to hear and determine complaints related to
procurement: Vaughn v Canada, 2005 SCC 11, [2005] 1 S.C.R. 146 at paras 2,
59-61 [Vaughn].
[80]
The Federal Court of Appeal in Lebrasseur v
Canada, 2007 FCA 330, [2007] FCJ No 1365 at para 18 [Lebrasseur]
interpreted Vaughn as saying:
[W]here an individual has recourse to a
statutory grievance scheme such as Part III of the Royal Canadian Mounted
Police Act to seek a remedy for a complaint arising from a workplace event, the
Courts generally should decline to deal with claims for damages arising out of
the same event, even if the statutory grievance scheme does not expressly oust
the jurisdiction of the courts. Although the courts retain the discretion to
hear such claims, they should exercise that discretion only in exceptional
cases. The scope of the exception remains
undefined, although it is suggested that an exception might be found if the
integrity of the grievance procedure has been compromised (which may occur, for
example, in certain cases where a whistleblower is alleging employer
retaliation). [emphasis added]
[81]
The CITT Act provides a scheme under which
parties may seek a remedy for complaints arising out of alleged breaches by the
Crown of its procurement processes. As noted in Assoc, however, the
mere existence of an alternative administrative scheme does not, by itself,
oust the Court's jurisdiction: Assoc at para 26. The CITT is a tribunal
which specializes (among other things) in procurement issues. This is
exemplified by its decision in TPG’s second complaint where the CITT expressly
found unfairness in the application of specific requirements in the RFP – a
reincarnation of the very argument that TPG is making here.
[82]
The Federal Court of Appeal has held that
Parliament has conferred on the CITT a “broad remedial
discretion” and that it has “expertise in
selecting an appropriate remedy:” Envoy Relocation Services v Canada
(Minister of Public Works and Government Services), 2007 FCA 177, [2007]
FCJ No 627 at para 7.
[83]
In Siemens Westinghouse Inc v Canada
(Minister of Public Works and Government Services), 2001 FCA 241, [2001]
FCJ No 1184 [Siemens] at para 21, the Federal Court of Appeal also
stated that the CITT was created to deal with:
complex legal and factual issues that demand
specialized expertise in the fields of economics, business and procurement
practices. The detailed criteria in the RFP and the second evaluation handbook
have to be interpreted in addition to intricate contractual and legislative
provisions. In other words, in this case the CITT had to decide whether the
tender documents properly identified the requirements and evaluation criteria
in the RFP and whether the procurement was conducted according to them and the
applicable contracts, trade agreements and legislation. This complex
exercise demands unique expertise and experience and is the everyday work of
the Tribunal. [emphasis added]
[84]
In Siemens, the applicant brought an
application for judicial review of a decision of the CITT dismissing a
complaint that a re-evaluation of the technical merits of the proposals for the
procurement in issue was conducted unfairly. The Federal Court of Appeal’s
comments occurred in the context of determining the standard of review of a
CITT decision, but it noted certain factors that are relevant to the
jurisdictional analysis, as they relate to the adequacy of the CITT as an
alternative forum:
The expertise of the CITT in these
matters is undoubted. Since 1995, it has dealt with
more than 375 procurement complaints. The CITT became Canada's bid challenge
authority pursuant to Article 1017 of the North American Free Trade Agreement
(NAFTA) on January 1, 1994, replacing its predecessor under the Canada-United
States Free Trade Agreement, the Procurement Review Board of Canada. The CITT
also became the bid challenge authority for the Agreement on Internal Trade
(AIT) on July 1, 1995 and for the World Trade Organization Agreement on
Government Procurement (AGP) on January 1, 1996. Legislation has been enacted
to ensure that procurements are conducted openly and fairly, and the CITT is
responsible for overseeing all of this activity. The CITT consists of a
Chairperson, two Vice-Chairpersons and not more than six other permanent members
appointed for terms of up to five years. Assisting the members are staff
experts with in-depth knowledge of procurement practices.
Hence, it is clear that Parliament meant
this expert tribunal to be responsible for overseeing the procurement activities
of the government and that the Courts' review of their decisions, except
for jurisdictional and other exceptional cases, ought to be on the standard of
patent unreasonableness, which means that, unless they are clearly irrational,
they must stand.
Also to be considered, in addition to
comparative expertise, is the legislative language. The power granted to the
CITT to review the procurement process demonstrates that it is to be afforded
wide latitude. In order to comply with the AIT, which requires governments
to promote "fair, open and impartial procurement procedures"(see
Article 514(2)), bid protest procedures were created. Section 30.11 of the
CITT Act allows complaints to the Tribunal on "any aspect of the
procurement process". Subsection 30.14(2) of the CITT Act also
mandates that the Tribunal shall determine the validity of a complaint on the
basis of whether the procedures and other requirements prescribed in respect of
the designated contract have been or are being observed. Section 11 of the
Canadian International Trade Tribunal Procurement Inquiry Regulations,
SOR/93-602 (the Procurement Regulations) further specifies that, in conducting
an inquiry into a complaint, the CITT is to determine whether the procurement
was conducted in accordance with the NAFTA, AIT, or AGP, whichever is
applicable. This is a broad authority indeed.
The language of the CITT Act also indicates
that the Tribunal was designed to grapple with issues affecting the
interrelated and interconnected rights and interests of different
constituencies. In this connection, the CITT has been granted certain policy
and advisory functions in addition to its supervisory role in the procurement
field. For example, section 18 of the CITT Act provides that the Tribunal is
to conduct inquiries into, and prepare reports on, any economic, trade or
commercial matters referred to it by the Governor in Council. This advisory
function is clearly distinguishable from the regular functions of a court in
adjudicating legal rights. Although the Tribunal was not acting under section
18 or an analogous section of the CITT Act in the matter presently under
review, its legislated role in policy formation, as suggested in Mattel (at
para. 31), reflects upon the scope of the CITT's expertise and suggests a
degree of deference be accorded to that Tribunal by this Court.
There is no privative clause in the statute
creating the CITT. Nor is there any specific right of appeal given. It
appears, therefore, that the usual judicial review provisions of sections 18 to
18.5 (except subsection 18.4(2)) and section 28 of the Federal Court Act
govern the scope of review of the CITT's decisions on procurement. [emphasis
added]
[85]
In short, the CITT is a highly specialized
tribunal which deals daily with complex issues relating to procurement and the
relationship between RFPs, legislation, and domestic and foreign trade
agreements.
[86]
On the other hand, as Justice Near observed at
para 43 of TPG v Canada No 1 FC, unlike other federal statutes, there is
nothing in the CITT Act that specifically prohibits civil proceedings against
the Crown. Moreover, the comments of the Federal Court of Appeal above come in
the context of a judicial review application. The CITT’s primary function is
the determination of whether Canada has breached its obligations under
specified international and domestic trade agreements. This is clear from
section 11 of the Canadian International Trade Tribunal Procurement Inquiry
Regulations, SOR/93-602, which states that “if the
Tribunal conducts an inquiry into a complaint, it shall determine whether the
procurement was conducted in accordance with the requirements set out in
whichever of NAFTA, the Agreement on Internal Trade, the Agreement on
Government Procurement, the CCFTA, the CPFTA, the CCOFTA or the CPAFTA applies”
[emphasis added].
[87]
This primary role is also evident in the
decisions in relation to the four complaints initiated by TPG prior to this
action. The CITT itself states that it is “required to
determine whether the procurement was conducted in accordance with the
applicable trade agreements, which, in this case, are the Agreement on
Internal Trade, the North American Free Trade Agreement and the Agreement on
Government Procurement” [NAFTA]: [2007] CITT No 91 at para 11.
[88]
However, certain articles of those agreements
incorporate concepts of the fairness of the evaluation – for example, Article
1015(4)(d) of NAFTA provides that “awards shall be made
in accordance with the criteria and essential requirements specified in the
tender documentation.” Therefore, fairness of the evaluation of the
bids and compliance with the terms of the RFP are all within the specific
jurisdiction of the CITT.
[89]
Although breach of the terms of the RFP give
rise to a civil “breach of contract claim” by virtue of breaching the terms of
Contract A, the thrust of TPG’s claim is that it was evaluated unfairly or not
in accordance with the terms of the RFP. The thrust of the claim is set out in
the written summary of its closing argument as follows:
The express terms of Contract A are based on
the tender documents. In this case, the tender documents establish an express
obligation to terminate Contract B if the winning bidder does not have the
required resources at transition. This express term of Contract A was breached
in this case.
Contract A also includes implied terms:
i) a duty to treat all bidders
fairly and equally;
ii) a duty not to accept a
non-compliant bid;
iii) a duty not to rely on
undisclosed terms in evaluating bids;
iv) a duty to enter into contract B
based on the terms in the tender documents.
All of these implied terms were breached in
this case.
[90]
TPG argues that the CITT has itself held that
issues of contract administration or contract performance do not fall within
its jurisdiction: Airsolid Inc v Canada (Public Works and Government
Services), PR-2009-089 (18 Feb 2010) [Airsolid]. In that case, a
bidder discovered after the procurement process and after the contract was
awarded to the winning bidder, that the winning bidder supplied a boat that was
10 cm shorter than the one requested in the RFP. PWGSC was notified, and it
responded that the bid was compliant on its face (the winning bidder submitted
a picture of the boat which indicated its length met the requirements set out
in the RFP), and that in any event, PWGSC would abide by the contract in force
between it and the winning bidder. The CITT determined that failure to provide
the boat required by the awarded contract went to issues of contract
performance and not to issues of procurement. It was on that basis that the
CITT held it had no jurisdiction to determine the complaint.
[91]
This suggests that the Court should at least
exercise its jurisdiction in relation to TPG’s allegation that PWGSC accepted a
non-compliant proposal. However, unlike the situation in Airsolid, the
non-compliance of CGI’s proposal is alleged by TPG to have been known by PWGSC
prior to contract award. Moreover, TPG concedes that it has no claim in
relation to Contract B between PWGSC and CGI. TPG’s evidence of the transition
phase goes only to the allegation that PWGSC accepted a non-complaint bid and
it knew it.
[92]
Accordingly, this evidence goes to the
unfairness of the overall evaluation during the procurement process. In
Airsolid, there was no evidence to suggest that PWGSC knew that the bid
was non-compliant and therefore there was nothing unfair about the procurement
process itself. Once the contract was awarded, any non-compliance would be
dealt with as between PWGSC and the winner of Contract B. By contrast, in this
case, TPG alleges that CGI was non-compliant (as demonstrated by its actions
after contract award) and that at all material times before contract
award, PWGSC was aware of CGI’s non-compliance. As TPG’s claim relates to the
unfairness of PWGSC’s actions during the procurement process itself, the
CITT has jurisdiction to hear this aspect of TPG’s claim as well.
[93]
I find therefore that no aspect of TPG’s claim
falls outside of the jurisdiction of the CITT. The Federal Court of Appeal has
consistently commented on the specialized nature and expertise of the CITT.
TPG ought to have brought a complaint before the CITT, as it had done four
previous times. Its proper remedy before the Court in this case is applying
for judicial review of the CITT’s decision.
F.
Adequate Alternative Remedies
[94]
The second discretionary bar to exercising
jurisdiction is the adequacy of alternative remedies.
[95]
The CITT has been empowered with a broad
remedial discretion; however, the CITT only has the power to “recommend” remedies and it is up to the government
institution to implement those recommendations to the greatest extent
possible. It is unclear whether or not the CITT’s recommendations would be
enforceable by a complainant as against the government institution. However,
in my view, TPG still had an obligation to exhaust its possible avenues of
recourse with the CITT and show that it could not obtain an adequate remedy
before proceeding to this Court.
[96]
The Federal Court of Appeal set out the doctrine
of alternative remedies in the administrative context in CB Powell Ltd v
Canada (Border Services Agency), 2010 FCA 61, [2010] FCJ No 274 at paras
30-33 [CB Powell]:
The normal rule is that parties can proceed
to the court system only after all adequate remedial recourses in the administrative
process have been exhausted. The importance of this rule in Canadian
administrative law is well-demonstrated by the large number of decisions of the
Supreme Court of Canada on point [references omitted].
Administrative law judgments and textbooks describe
this rule in many ways: the doctrine of exhaustion, the doctrine of adequate
alternative remedies, the doctrine against fragmentation or bifurcation of
administrative proceedings, the rule against interlocutory judicial reviews and
the objection against premature judicial reviews. All of these express the
same concept: absent exceptional circumstances, parties cannot proceed to
the court system until the administrative process has run its course. This
means that, absent exceptional circumstances, those who are dissatisfied with
some matter arising in the ongoing administrative process must pursue all
effective remedies that are available within that process; only when the
administrative process has finished or when the administrative process affords
no effective remedy can they proceed to court. Put another way, absent
exceptional circumstances, courts should not interfere with ongoing
administrative processes until after they are completed, or until the
available, effective remedies are exhausted.
…
Courts across Canada have enforced the
general principle of non-interference with ongoing administrative processes
vigorously. This is shown by the narrowness of the "exceptional
circumstances" exception. Little need be said about this exception, as the
parties in this appeal did not contend that there were any exceptional
circumstances permitting early recourse to the courts. Suffice to say, the
authorities show that very few circumstances qualify as
"exceptional" and the threshold for exceptionality is high: see,
generally, D.J.M. Brown and J.M. Evans, Judicial Review of Administrative
Action in Canada (looseleaf) (Toronto: Canvasback Publishing, 2007) at 3:2200,
3:2300 and 3:4000 and David J. Mullan, Administrative Law (Toronto: Irwin Law,
2001) at pages 485-494. Exceptional circumstances are best illustrated by the
very few modern cases where courts have granted prohibition or injunction
against administrative decision-makers before or during their proceedings.
Concerns about procedural fairness or bias, the presence of an important legal
or constitutional issue, or the fact that all parties have consented to early
recourse to the courts are not exceptional circumstances allowing parties to
bypass an administrative process, as long as that process allows the issues to
be raised and an effective remedy to be granted: see Harelkin, supra;
Okwuobi, supra at paragraphs 38-55; University of Toronto v.
C.U.E.W, Local 2 (1988), 52 D.L.R. (4th) 128 (Ont. Div. Ct.). As I shall
soon demonstrate, the presence of so-called jurisdictional issues is not an
exceptional circumstance justifying early recourse to courts.
[emphasis added]
[97]
These comments from the Federal Court of Appeal
were made in the context of determining whether the Court had jurisdiction to
judicially review a decision of the President of the Canada Border Services
Agency; however, its comments may be interpreted broadly and are applicable
when determining whether the Court should entertain this action. This is
supported by para 4 where Stratas J.A. states, “Absent
extraordinary circumstances, which are not present here, parties must exhaust
their rights and remedies under this administrative process before pursuing any
recourse to the courts, even on so-called ‘jurisdictional’ issues.”
[98]
In this case, as in CB Powell, the
parties did not argue that there were any exceptional circumstances permitting
early recourse to the courts. Mr. Powell reiterated throughout his testimony
that the CITT was not useful:
A. I decided that CITT was not a useful mechanism
because it has no discovery capability at all.
Q. In your words, Mr. Powell, you decided
that CITT wasn't too interested in getting to the bottom of this matter and you
decided it was a waste of time?
A. That would be about right.
Q. And instead of bringing a complaint to
the CITT then you launched the action that brings us here to this court today?
A. Yes, I concluded we needed a lot more
information about what happened to make our scores go from almost perfect to
terrible, and I didn't think we would get that through the CITT process.
[99]
Mr. Powell may be right about the differences
between court proceedings and proceedings before the CITT; however, I note that
section 17 of the CITT Act vests the CITT with all of the powers of a superior
court of record including the power to compel witnesses to attend, and “other matters necessary or proper for the due exercise of
its jurisdiction.”
[100] In any event, the doctrine of adequate remedies does not inquire as
to how close the administrative proceedings mirror court proceedings. It only
requires that there be an adequate remedy available to the complainant.
While Mr. Powell was of the view that “CITT is about
trade agreements, it's not about civil damages,” the reality is that the
CITT is empowered to recommend that damages be paid as a remedy.
[101] Section 30.15 of the CITT Act empowers the CITT to “recommend such remedy as it considers appropriate”
including: issuance of a new solicitation for the designated contract;
re-evaluation of the bids; termination of the designated contract; award of the
designated contract to the complainant; or compensation in an amount to
be specified by the tribunal” [emphasis added]. Undoubtedly this is a wide
discretion, and compensation for any found breach is a remedy open to the CITT.
[102] Subsection 30.15(3) of the CITT Act sets out the factors the CITT is
to consider in recommending a remedy including: the seriousness of any
deficiency in the procurement process; the degree to which the complainant or
other interested parties were prejudiced; the degree to which the integrity and
efficiency of the procurement system was prejudiced; whether the parties acted
in good faith; and the extent to which the contract was performed.
[103] Section 30.18 reads that “where the [CITT]
makes recommendations to a government institution under section 30.15, the
government institution shall, subject to the regulations, implement the
recommendations to the greatest extent possible” [emphasis added].
While this is mandatory language, there is also a caveat as to the extent to
which a government institution would have to implement a remedy. Further,
subsection 30.18(2) contemplates a situation where a government institution may
not implement the recommended remedy at all. In such a situation, the
government institution must advise the CITT of the extent to which it intends
to implement the recommendations, and if it does not intend to implement them
fully, the reasons for not doing so.
[104] Mr. Powell’s testimony reveals his reservation as to the
enforceability of damages that the CITT might be able to award TPG and his
overall impression of the value of the CITT process:
Q. My point was simply this, sir: You got
the material again in July, you knew you could bring a CITT complaint, you knew
you had to do it within 10 days and you declined.
A. I would reserve judgment on that, but
it's clear that CITT is a very minimum mechanism. They can't impose damages
really, or at least not enforceable damages. You get no power of discovery.
You can't compel testimony. It was a waste of time.
Q. I wonder if I could ask for a short
reserve on your judgment and get an answer to that question now.
A. Which question?
Q. You agree with me that when you received
the material again in July, the financial and the technical scores, you knew
you could bring a complaint to CITT within 10 days and you declined to do so?
A. Yes, it was a waste of time.
[105] Irrespective of Mr. Powell’s views of the value of the CITT process,
it was an avenue of recourse available to TPG. By February 26, 2008, TPG had
received scoring sheets for each of the five evaluators, consensus scores for
the evaluation of the technical proposal, and a list of those rated criteria
where the winning proposal obtained a higher score than TPG together with the
rationale for those scores. TPG had all of the information it needed to launch
a complaint with the CITT on the same grounds on which this action is based,
and in the words of its owner, it declined to do so because, in its view, “it was a waste of time.”
[106] With respect, the qualms Mr. Powell had about the CITT process are
not the types of exceptional circumstances contemplated by the exception to the
adequate alternative remedy discretionary bar. He had the opportunity to bring
a complaint to the CITT, and if he felt that either the process or the remedy
were unreasonable he could have brought an application to this Court for
judicial review of the CITT’s decision. Instead, TPG declined to engage with
the process at all with respect to the matters of which it now complains. This
voluntary refusal to engage with the administrative process does not entitle
TPG to bypass it and choose the Court as the preferred forum.
[107] Given that there was an adequate alternative remedy available, which
TPG chose not to employ, it is irrelevant that the CITT Act does not explicitly
prohibit parallel civil proceedings against the Crown.
[108] In summary, I find that the Federal Court has jurisdiction to hear
this claim against the Crown by virtue of section 17 of the Federal Courts
Act. However, this is a case in which the Court should not exercise its
jurisdiction because the CITT is a more appropriate forum that specializes in
dealing with all of the issues raised by TPG in this action. Further, it is
capable of recommending the remedy being requested by TPG – compensation. TPG
therefore had an obligation to exhaust its potential remedies before the CITT
before launching an action in the Federal Court. In the face of a refusal to
exercise that avenue of redress, this Court ought not to intervene.
[109] Notwithstanding that this finding disposes of the action, I shall
consider the two principal claims of TPG relating to a breach of Contact A, in
the event that there is an appeal and my view is not upheld.
XIV. Was TPG’s Proposal
Fairly Evaluated?
[110]
TPG alleges that its bid was evaluated unfairly
and consequently, its scores on 9 of the rated requirements were unreasonably
reduced in the consensus process from those initially awarded individually by
the evaluators. TPG submits that for the 9 requirements in issue, there was
ambiguity in the language of the RFP which led to inconsistent approaches to
evaluation. It says that in such a situation, the evaluators ought to have
given the benefit of the doubt to all bidders and awarded the maximum number of
points available. Under the benefit of the doubt approach, TPG would have won
the technical evaluation. TPG further alleges that the score reductions were
not adequately substantiated and it asks the Court to draw an adverse inference
against the Crown.
[111] The Crown submits that the majority of TPG’s allegations as to the
evaluation have largely been abandoned by the Consent Order pursuant to which
the following allegations were abandoned:
1.
all allegations of conflict of interest;
2.
all claims for punitive damages;
3.
all allegations of negligence;
4.
all allegations of bad faith, including all
claims of misconduct, bias, fraud, or unconscionability;
5.
all allegations related to the process of
the evaluation of the TPG bid;
6.
all allegations that the RFP was drafted, or
re-drafted to favour CGI or prejudice TPG; and
7.
all allegations that the Defendant induced a
breach of contract or interfered with the plaintiff’s economic interests.
[emphasis added]
[112] Further, at trial the parties reached an agreement and read into the
record that there would be no allegation that the Master Evaluation Record did
not reflect the comments of all five evaluators, no allegation that the scores
were changed at any time following the final consensus meeting on or about
September 27, 2006, and no allegation with respect to the chain of custody of
the Master or individual evaluation records.
[113] Given these abandoned allegations, the Crown submits that in the
absence of bad faith, the Court should not substitute its evaluation for that
of the evaluators, who were highly skilled experts in their field, and came
from a diversity of backgrounds within ITSB. In any event, it is submitted
that the evaluators followed the instructions given to them in the evaluation
process and evaluated all of the bids fairly and equally. It says that any
ambiguity arising from the RFP language was resolved either in the progress
meetings or during the consensus meetings and the same evaluation methodology
was applied to all three bidders. Further, the Crown submits that TPG is cherry-picking
which requirements it takes issue with and there is no logical relationship
between 3.3.3, 3.3.5 and the other 7 in issue.
[114]
The Evaluation Criteria Matrix sets out the
3.3.3 and 3.3.5 requirements in the RFP and their evaluation criteria, as follows:
|
#
|
Requirement
|
Evaluation
Criteria
|
Weight
|
|
3.3.3
|
[R] The proposal should include a list of the performance metrics and
service level measurements that the Bidder believes may be relevant to the
ETS services, and that may be effectively employed in the “Service-Level”
contractual framework.
|
The proposal will
be rated on the extent of relevant measurements proposed.
One (1) point for every relevant and measurable performance metric
/ service level measurement that can reasonably be expected to be used by
ITSB in a “Service-Level” contractual framework.
Maximum 100 points
|
3.4892%
|
|
3.3.5
|
[R] The proposal should include a description of a previous project
or contract in which the Bidder delivered services within a “Service-Level”
contractual framework that employed similar, to the ones proposed under 3.3.3
above, performance metrics and service level measurements.
The proposal should include the name and contact information for
an individual representing the client in the example project who the
Evaluation team can contact to verify the information provided.
Answer 147: The
evaluation will be performed at a high level and if any specific detail of a
response is required the evaluator will ask the reference to provide a
specific contacts [sic] that can confirm the information required
(e.g. the number of Intermediate Cabling Technical Analysts).
Amendment #16,
Answer 156: The use of Consortium (Prime with subcontractor(s) ) references
are acceptable.
Answer 162:
The reference must be an individual who
was considered "the Client' during the period of the contract.
|
The proposal will
be rated on the extent of relevant measurements employed in the example
project.
One (1) point for
every relevant and measurable performance metric / service level measurement
that can reasonably be expected to be used by ITSB in a “Service-Level”
contractual framework.
Maximum 50 points
|
3.4892%
|
[115] The individual scores and consensus score given the three bidders
for these two requirements were as follows:
Scoring
for 3.3.3
|
Bidder
|
Individual Scores
|
Maximum Score
|
Consensus Score
|
|
CGI
|
Mr. Bartlett
………………………100
Mr. Bezanson
……………………100
Mr. Boudreault …………………..100
Mr. Swimmings
…………………...98
Mr. Verma
………………………...90
|
100
|
99
|
|
IBM
|
Mr. Bartlett
………………………..94
Mr. Bezanson
……………………..85
Mr. Boudreault
…………………..100
Mr. Swimmings
……….…………100
Mr. Verma
……………………….100
|
100
|
65
|
|
TPG
|
Mr. Bartlett
………………..……....80
Mr. Bezanson
……………….…….77
Mr.
Boudreault…………………...100
Mr. Swimmings
…………….……..46
Mr.
Verma…………………..……100
|
100
|
49
|
Scoring for 3.3.5
|
Bidder
|
Individual Scores
|
Maximum Score
|
Consensus Score
|
|
CGI
|
Mr. Bartlett
………………………..50
Mr. Bezanson
……………………..45
Mr. Boudreault
……………………50
Mr. Swimmings
…………………...49
Mr. Verma
………………………...44
|
50
|
50
|
|
IBM
|
Mr. Bartlett
………………………..18
Mr. Bezanson
……………………..35
Mr. Boudreault ……………………50
Mr. Swimmings
…………………...50
Mr. Verma
………………………...16
|
50
|
35
|
|
TPG
|
Mr. Bartlett
……………………......10
Mr. Bezanson
……………………..32
Mr. Boudreault
……………………50
Mr. Swimmings
…………………...22
Mr. Verma…………………………50
|
50
|
22
|
[116] While I agree with the Crown that the average or mean of the scores
given individually is not determinative, it is informative. The average of the
individual scores as shown on the chart below reveals, on average, that CGI
scores improved during consensus, that only TPG suffered a reduction in rating
for both requirements, and that it suffered a significant reduction in
assessment during the consensus process.
Criterion
3.3.3
|
Bidder
|
Average of Individual Scores
|
Consensus Score
|
Change
|
|
CGI
|
97.6
|
99
|
+1.40
|
|
IBM
|
95.8
|
65
|
-30.5
|
|
TPG
|
80.6
|
49
|
-31.6
|
Criterion
3.3.5
|
Bidder
|
Average of Individual Scores
|
Consensus Score
|
Change
|
|
CGI
|
47.4
|
50
|
+2.60
|
|
IBM
|
33.8
|
35
|
+1.20
|
|
TPG
|
32.8
|
22
|
-9.20
|
[117] The evidence of the evaluators, Mr. Henderson and Mr. Tibbo
establishes that there was confusion among the evaluators surrounding the
evaluation of these two criteria and the meaning of the terms 'performance metrics', 'service
level measurements', and 'Service-Level
contractual framework'. There was also confusion as to the methodology
to employ when a bidder listed more than 100 metrics for 3.3.3, given that the
maximum number of points that could be awarded was capped at 100. Furthermore,
there was significant confusion among them about what constituted a “relevant and measurable performance metric/service level
measurement that can reasonably be expected to be used by ITSB.”
[118] During the progress meeting on September 14, 2006, a decision was
made by the evaluators that they would only evaluate the first 100 performance
metrics or service level measurements listed by a bidder in response to 3.3.3.
Despite that agreement, Mr. Boudreault and Dr. Verma continued to evaluate all
of the metrics at the individual evaluation stage, whereas the other three
evaluators stopped after the first 100 metrics listed.
[119] At some point during the consensus sessions, the evaluators
concluded that all of the metrics proposed should be evaluated and not just the
first 100 because, as Mr. Boudreault testified, “if a
part of the answer is in the bid somewhere even though it’s in another heading
or if it’s somewhere else, if it provides an answer to the question… if it’s in
there, you have to consider it.”
[120] Only Mr. Henderson testified that when this decision was made, the
consensus meeting was adjourned and the evaluators re-evaluated the metrics of
each proposal individually before continuing consensus. None of the evaluators
supported that account. Their evidence, which I accept, was that the consensus
meeting was not adjourned; they simply re-evaluated all of the metrics as a
group while arriving at consensus. In my view, this remedies any
irregularities in the individual evaluation stage in this regard. This is part
of the reason there is a consensus stage – to address issues in the individual
phase. I simply do not accept the submission of TPG that it was treated
differently than the others because its metrics (or at least those in excess of
100) were not assessed individually by three of the evaluators but were
assessed only during the consensus sessions. What matters is that all of TPG’s
metrics were eventually evaluated. There is no evidence that in this respect
TPG was treated differently than the others.
[121] The issues relating to terminology and the basis upon which the
proposals were evaluated in regard to 3.3.3 and 3.3.5, are different matters.
[122] Confusion surrounding the terminology used in the RPF surfaced early
on during the question and answer phase, as is illustrated by the following:
Question 55:
Annex D-1, 1.3.2.4.9
The Requirement states, “Was the Bidder
responsible for delivering specific performance, service or function Metrics or
Service Levels?” but the Evaluation Criteria only evaluates Performance
Metrics.
a)
please define Performance Metrics
b)
why are service or Function Metrics or Services
Levels mentioned?
c)
why does 2. mention performance measurements,
not performance metrics? Are they identical?
Answer 55:
The following are the definitions:
a)
Performance metrics are units of measure
utilized to describe and measure work. For example, performance metrics for
engineering could include but not be limited to: number of change requests
completed, number of problem tickets solved.
b)
Service levels are used to describe the
application of Performance metrics to deliver an acceptable service. For
example, Change Management service level could be set at 12 completed change
requests per week, or Problem Management service level could be 50% of all
problem tickets must be resolved and closed within 30 minutes of notification
of the problem.
c)
Function metrics are those units of measure used
to describe and measure work delivered by a specific function. For example,
number of database modification requests completed by the function unit
supporting database administration.
d)
Yes.
Question 140
…
At various places within the RFP documents
the terms ‘Results Based Delivery’, ‘performance-based service delivery
approach’, ‘Results Based Services’ and “Service-Level” approach’ are used.
As far as we can determine all these phrases are used to refer to the same
concept. Can PWGSC confirm that they do indeed all refer to the same thing?
Answer 140:
Yes – Performance-base service delivery
approach, Results Base Services Delivery and Service Level are all similar and
should be treated the same.
[123] An email from Mr. Bartlett following the evaluation suggesting
improvements in the process also reveals the difficulties that the evaluators
had with these concepts:
The evaluation team needs to agree on
definitions of terminology used in the RFP. Definitions for terminology like
“metric”, “performance metric” and “service level metric” need to be agreed
upon by the team.
[124] The evaluators discovered during the consensus sessions that they
were not of one mind as to the test for awarding a point for a metric. The ECM
in the RFP to be used by the evaluators was quite specific with respect to
3.3.3 that a proposal would be awarded “one (1) point
for every relevant and measurable performance metric / service level
measurement that can reasonably be expected to be used by ITSB in a
‘Service-Level’ contractual framework.” Mr. Henderson best described
the different approaches used and the resolution of the evaluators to focus on
the “quality” of the metric:
Some of the evaluators just went through a
list and said, "Okay. We asked for 100. Yes, there is 100 there" and
that was it. Others looked at each metric to determine whether it could in
fact be applied to a future Service-Level agreement, et cetera.
Because of that
inconsistency, the marks were inconsistent, so the discussion ensued and a
consistent approach was determined which was to evaluate -- to go back,
re-evaluate that portion of the proposals, each evaluator was to do that,
looking at the, I guess, quality of the performance metric based on how the
requirement was articulated in the RFP, and that occurred.
Apparently this
focus on the “quality” of the metric was based
on the evaluators rereading the Requirement, and focusing on its statement that
the metrics were those the bidder believed to be relevant and “that may be effectively employed in the ‘Service-Level’
framework [emphasis added].”
[125] All of the evaluators testified that with this adjustment (and with
the decision to assess all criteria), as a group they then assessed TPG’s bid
for 3.3.3 and later for 3.3.5. I find that the evidence supports that this was
done in the consensus meeting and not done individually by the evaluators and
then in consensus. The evidence also supports that the evaluators also went
back and revaluated the IBM bid. There is no clear evidence that a revaluation
of the CGI proposal was done.
[126] I agree with TPG that the record of the consensus meetings and
decisions made therein is quite simply incomplete. In fact, I find it woefully
inadequate to answer some basic questions, such as when the evaluators became
aware that they were not of one mind as to the standard to be employed in
rating 3.3.3, and what was then done regarding the proposals that had already
been rated in a consensus process. Further, the record is quite simply not
sufficient to respond to questions by a losing bidder as to why its proposal
was rated as it was. This sort of detail, Mr. Tibbo testified, was what he
told the evaluators they must supply – yet Mr. Tibbo failed to maintain exactly
that sort of record in the sessions that mattered most – the consensus
sessions.
[127] Based on the evidence of the evaluators, and particularly the
different ink colours used by some of them in their rating sheets, it is most
likely that the decision to focus on the “quality”
of the metric was a decision made after the CGI bid had been assessed at
consensus. If the evaluators did not go back and reassess the CGI bid in the
same manner that it did TPG’s bid, then TPG was not treated in a fair and
consistent manner. This is so even if, as the evaluators testified, CGI’s
proposal and its metrics were attuned to the requirement that the response had
to be focused on a results based framework, and TPG’s was not. It is not for
the Court to make the assessment that the evaluators ought to have made – the
Court’s role is to determine whether TPG was treated equally and fairly with
CGI, and in this respect, I find that it was not.
[128] TPG having proved that there was a change in the evaluation process
when its bid was rated, the burden must lie on the Crown to satisfy the Court
on the balance of probabilities that the same was done for the other bidders.
The Crown has failed to meet that burden – in large part as a consequence of
the incomplete and imprecise record of the discussions and decisions made
during the consensus sessions.
[129] The Court also finds that the evaluation of TPG with respect to the
3.3.3 and 3.3.5 requirements was not fairly made because the evaluations are
not consistent.
[130] The Crown has established that in response to these two
requirements, TPG merely responded with the metrics it had developed for ETS
1. Despite the fact that such metrics were developed in collaboration with
PWGSC, the reality is that those metrics were developed in the context of a
per-diem or level of effort framework contract, not a results based framework
which was what was asked for in these requirements.
[131] There is no basis for TPG to assume that metrics it developed under
a per-diem contract would be relevant to a results based contract, especially
when the evaluation criteria specifically indicates that the metrics must be
relevant to a results based contract. PWGSC’s intention to move to a results
based model was stated clearly in the RFP and these requirements were of
obvious relevance.
[132] Mr. McIlwham gave evidence that all of the metrics proposed by TPG
mapped onto Information Technology Infrastructure Library [ITIL] disciplines.
Mr. McIlwham described ITIL as a “framework for people
on how they should deliver services.” ITIL “created
assessments and knowledge base and process improvement initiatives to take
organizations from a maturity level of one to maturity level five, five being
very expensive.”
[133] Mr. McIlwham described his process in preparing his report as
follows:
[W]hat I did was I took all of the elements
of the responses that were supplied by TPG and mapped them to the ITIL
discipline that they were actually relevant to, so the third column in there
was -- the first column was what area of performance are you evaluating, and
the other column is the ITIL discipline that is actually relevant to that.
Every single one of them fell into ITIL elements and disciplines, so I couldn't
figure out why things were not evaluated as relevant.
[134] I give little weight to Mr. McIlwham’s evidence. First, he only
evaluated TPG’s bid and did not consider CGI or IBM’s bid. Second, that TPG’s
proposed metrics map onto ITIL disciplines is irrelevant. ITIL does not
provide metrics or indicate what metrics would be relevant for each of its
disciplines. Mr. McIlwham described the significance of ITIL as follows:
Q. Yeah. And going on: "The role of
the ITIL framework is to describe approaches, functions, roles and processes,
upon which organisations may base their own practices. The role of ITIL is to
give guidance at the lowest level that is applicable generally. Below that
level, and to implement ITIL in an organisation, specific knowledge of its
business processes is required to tune ITIL for optimum effectiveness."
And you agree with all of that?
A. Yeah.
Q. And the point of that is, as I understand
it, and I think you and I can agree on this, is just as it says, you apply
those baseline guidelines and then you use your expertise and judgment to
tailor them to meet the needs of the organization to which they're being
applied, right?
A. That's the way it works, yeah.
[135] Accordingly, ITIL just provides a baseline of best practices in the
industry. To the extent that it is even relevant information; that TPG’s
metrics mapped onto ITIL disciplines only shows that they met the baseline
industry best practice standards. Mr. McIlwham conceded that whether or not
the metrics map onto ITIL disciplines does not answer the question of whether
the metrics proposed were responsive to the RFP:
Q. What you say in your chart here is every
one of these performance metrics aligns with an ITIL discipline, right?
A. Correct.
Q. And I'm suggesting to you that's all that
chart says.
A. This chart?
Q. Yeah.
A. Correct.
Q. And then phase two, or stage two, if I
can put it this way and put words in your mouth, you're saying then in your
opinion all of those performance metrics are responsive to 3.3.3 as well.
A. Correct.
Q. Okay. And I'm simply saying to you, your
opinion is those two lists are the same, they may or may not be. This wasn't
meant to be controversial, simply just because a metric aligns with ITIL doesn't
help us at all whether it's responsive to an RFP. To decide that we have to
look at the RFP?
A. The total RFP.
Q. Right. Are we agreed on that?
A. Yeah.
[136] Mr. McIlwham also conceded that different metrics would be needed
for a results based contract than for a per diem or level of effort contract:
Q. Right, you get paid for an outcome, and
it follows logically, just as you have said then, that the metrics by which you
measure that would be different because it's a different proposition, right?
A. Yeah.
Q. In other words, if it were results based,
it's not enough to measure how many widgets were made, but you'd have to
measure how many were made within a time defined period or as against a certain
requirement or metric, right?
A. Yeah.
Q. Because you've got to measure, there's a
need to measure, in your words, whether and how the job is done in order to see
if you performed, right?
A. Correct.
Q. And then you've got to see if you
performed in order to see whether or not you get paid because, as you told us,
you measure that against your commitment in the contract, right?
A. Right.
Q. So if I get paid when the job is done,
we've got to measure whether or not the job is done in order to decide whether
or not I get paid, right?
A. It's results based, yeah.
Q. You got it. And because in a results
based environment you get paid not on a per diem, in other words, whether you
worked X hours times Y people, but just if the job is done and not otherwise,
right?
A. Yeah, it's based on the result.
Q. And that's why the metrics would be
different?
A. I'm trying to figure out how you would
measure it but, yes, the metric would be different. You have to have some sort
of measurement somewhere.
[137] Mr. McIlwham’s evidence is not probative of anything. That metrics
could be mapped to ITIL disciplines is an independent issue from whether or not
those metrics are responsive to the specific requirements in the RFP. He
conceded that different metrics would be needed between a per diem contract and
a results based contract. His mandate was limited to examining only the
metrics submitted by TPG and not those from any of the other bidders.
[138] Nevertheless, in my view, TPG’s metrics in response to 3.3.3 and
3.3.5 were not evaluated properly. At trial, TPG pointed out that some of the metrics
which were considered relevant and awarded points in 3.3.3 were not awarded
points in 3.3.5. Mr. Boudreault could not provide an adequate explanation as
to why a metric might be assessed as relevant for 3.3.3 but not for 3.3.5:
Q. These were considered not relevant or
duplicates. And if you go to the first grouping you'll see the listing of the
items that were found to be irrelevant or duplicate. If you look at that list,
you'll see that items number 29 to 32, which is what we were just looking at,
are not on that list. Do you see that?
A. I see that.
Q. In other words, for items 3.3.3 what we
have here in the bid at page 611 were found to be relevant. Do you see that?
A. I do.
Q. For the same metric for 3.3.5 they were
found to be irrelevant. Do you see that?
A. Yes.
Q. And my question is actually a very simple
one. Why?
A. I would say question 5 is referring to a
previous project in which the bidder delivered services within a service level
contractual framework, so -- and again, my recollection of eight years ago is
what it is, but the fact that this contract was used as a reference, which was
not a service level based contract, would suggest why these were not accepted.
Q. Do you know that for certain or is that
your best guess?
A. I'm speculating.
Q. I understand.
A. I can't recall 100 per cent.
Q. It's fair for me to say in that a
relevant metric is a relevant metric? If it's relevant in 3.3.3 it should be
relevant in 3.3.5; doesn't that make sense?
A. It does, except the fact that this question
was about providing previous experience and the experience cited in the
response was not in itself valid. We still attributed a number of points, from
what I can see, but essentially the reference was not valid, because it was a
resource based example as opposed to a service level based contract.
[139] Mr. Boudreault’s explanation does not make sense. Given the
relationship between 3.3.3 and 3.3.5, it is nonsensical that a metric would be
relevant and awarded a point for one requirement but not the other. Further,
if TPG’s reference project was truly not valid because it was not a service
level contract, then it should have been awarded 0 points, or even
disqualified. In my view, the above shows that there was a flaw in the evaluation
of the metrics.
[140] The Crown submits that it is not for this Court to substitute its
opinion for that of highly skilled evaluators. The evaluation of 3.3.3 and
3.3.5 required subjective assessments and the judgment of the evaluators should
be given significant deference: Monit International Inc v Canada, [2004]
FCJ No 59 at paras 277-278.
[141] Contrary to what the Crown suggests, the observation that the
evaluation of 3.3.3 and 3.3.5 was deficient is not equivalent to the Court
substituting its evaluation for that of the evaluators. No particular
expertise is required to see the deficiency in the evaluation process, nor
would the special expertise of the evaluators justify the way in which 3.3.3
and 3.3.5 were evaluated (as Mr. Boudreault’s testimony reveals). Given that
there is no explanation for why metrics relevant to 3.3.3 would not be awarded
points in 3.3.5, this does not rise to the level of reasonableness: there is no
justification, transparency or intelligibility.
[142] In conclusion, the move to a results based contractual framework was
a significant change for PWGSC and required different metrics. It may be that
TPG submitted metrics that were entirely irrelevant in such a framework.
However, the evaluation of 3.3.3 and 3.3.5 was itself deficient.
[143] However, although it has been found on the balance of probabilities
that TPG was not treated fairly and equally in the evaluation of its proposal,
and while this is a breach of Contract A, TPG cannot succeed in this action
unless it can prove that it has suffered damages as a consequence of that
breach. For the reasons that follow, I find that it has failed in that
respect.
[144] Even if it is accepted that requirements 3.3.3 and 3.3.5 were
unfairly evaluated, there is no evidentiary basis for finding that the other 7
requirements upon which the Claim is based were also unfairly evaluated. In
fact, TPG’s only basis for calling those other 7 requirements into question is
that “the consensus scores [are] substantially lower
than the median of the individual scores.” There is no other evidence to
suggest that these other 7 requirements were evaluated unfairly. As was noted
by the Crown in its written submissions: “The
plaintiff led no evidence, and did not cross-examine any of the five
evaluators, with respect to any alleged unfairness in the evaluation of the
nine criteria in issue other than 3.3.3 and 3.3.5.”
[145] In its written submissions, TPG claims that these 7 requirements were
“the most important evaluation criteria in addition to
3.3.3 and 3.3.5.” It suggests that since sections 3.3.3 and 3.3.5 were
evaluated unfairly, it follows that the whole bid was evaluated unfairly and it
cites the comment of the Federal Court of Appeal in TPG
v Canada No 1 FCA at para 10 that if 3.3.3 and
3.3.5 “were unfairly evaluated, it is probable that the
entire bid was unfairly evaluated.” Further, TPG says that where there
is not a clear basis for awarding scores, the bidder should be given “the benefit of the doubt.” Under TPG’s analysis, if
it was awarded the “benefit of the doubt” for
all 9 of the criteria in issue, it would have won the bid.
[146] The Crown has proven that even if TPG were awarded full marks for
3.3.3 and 3.3.5 and the other bidders’ scores remain unchanged, the result of
the RFP would be the same. In addition to having failed to lead evidence
regarding the 7 other criteria in issue, it says that the 9 criteria complained
of were not selected on any principled basis and there is no logical connection
between them. I agree. TPG has not discharged its burden of showing that any
unfairness in the evaluation would have changed the ultimate result of the
evaluation.
[147] The Federal Court of Appeal’s comment came in the context of an
appeal from a decision on a motion for summary judgment. The determinative
question was whether there was a genuine issue for trial. In stating that “if they [3.3.3 and 3.3.5] were unfairly evaluated, it is
probable that the entire bid was unfairly evaluated” the Court cannot be taken
to have suggested that unfairness of the evaluation of the entire bid followed
automatically. The plaintiff would still have to lead evidence to show
that other parts of the bid were evaluated unfairly.
[148] Further, the Federal Court of Appeal did not have the evidentiary
record that is before this Court. There is simply no evidentiary basis for
suggesting that any other aspect of the evaluation was unfair. Further, the
Federal Court of Appeal’s decision was premised largely on the evidence of
James Over that criticized the evaluation of 3.3.3 and 3.3.5. That evidence
was not before this Court.
[149] I also agree with the Crown that there appears to be no principled
basis on which the 9 requirements were selected. TPG claims that they are the
9 most important requirements, but that position does not withstand scrutiny.
They are not the 9 requirements accorded the greatest weight, although they are
9 of 20 of the requirements with the greatest weight. They are not related to
each other in terms of what is being asked of the bidder – for example, 3.3.3
and 3.3.5 relate to performance metrics and service level measurements, whereas
2.3.1.4 relates to how closely the proposal matches the requirements set out
for cross platform engineering, while 3.1.4 relates to an example of a
transition plan that the bidder developed in the delivery of similar services
to another client. The only element linking these 9 criteria together is that
they represent those requirements for which there was the “greatest deviation” for TPG between the consensus
score and the median individual score.
[150] The top 20 requirements account for 62.2% of the technical
evaluation score. Interestingly, the 9 requirements that TPG complains of
account for only 22.2% of the technical evaluation score, roughly 1/3 of the
maximum allowable score of the top 20 criteria. By contrast, criteria 2.2.4.1
and 2.4.1 were unchallenged by TPG, and yet their consensus score in those
requirements deviated from the median individual scores in their favour.
2.2.4.1 and 2.4.1 together account for 9.1% of the technical evaluation.
Therefore, at the very least, these two criteria that are unchallenged already
outweigh 3.3.3 and 3.3.5 which were challenged.
[151] In my view, this suggests that TPG’s selection of the criteria they
are challenging is largely arbitrary. The basis for suspecting unfairness in
the evaluation - deviation from the median individual scores - is not a
sufficient basis for demonstrating unfairness.
XV. Was
CGI’s Proposal Non-Compliant?
[152]
TPG submits that the CGI bid was non-compliant,
that the Crown knew or was wilfully blind to CGI’s non-compliance at the time
it accepted CGI’s bid, and that the Crown had an obligation to disqualify CGI.
Specifically, TPG alleges that: (1) CGI bid the incumbents as its own team
without permission; (2) some of the evaluators raised concerns about CGI being
able to deliver the incumbents but did not investigate further; (3) CGI took
steps to recruit the incumbents with PWGSC’s help; (4) instead of disqualifying
CGI, PWGSC worked with CGI to address its non-compliance including changing the
requirements and timing for completing transition; (5) the transition was
disruptive; and (6) CGI did not supply the required number of resumes.
[153] The Crown responds that CGI’s bid was compliant at all times.
Specifically: (1) CGI submitted its own resources as part of its bid and never
submitted the names of the incumbent personnel at any time prior to contract
award; (2) PWGSC was entitled to change the required functions over time; (3)
the transition was effective, and in any event, TPG cannot rely on breaches of
contract after contract award; and (4) all required resumes were submitted.
A. Reliance on Events Post-Contract Award
[154]
The Crown submits that when TPG alleges that the
Crown failed to enforce the RFP requirement that CGI deliver the required
resources after contract award, TPG is really asserting a breach of Contract B,
and this it cannot do.
[155] In my view, TPG can rely on evidence of events that occurred after
the award of contract B, but only to prove unfairness or a breach of the terms
of Contract A. TPG has no right of action as against breaches of Contract B
between CGI and PWGSC; it claims none.
[156] In Double N Earthmovers, a losing bidder (Double N)
discovered after contract award that the winning bidder (Sureway) had submitted
a non-compliant piece of equipment. The tender documents called for 1980
machinery or newer for two specific items. On its face, Sureway asserted its
equipment for item 1 would be 1980 or newer, and 1977 or 1980 for item 2. In
reality, the serial number of the machine submitted for item 1 corresponded to
a 1979 machine, and a 1977 machine for item 2. Double N discovered this fact
before the contract was ultimately awarded and brought it to the attention of
the City. The City responded that it would insist on the winning bidder
supplying 1980 equipment and about a month later, awarded the contract to
Sureway.
[157] When Sureway attempted to register its non-compliant equipment with
the City, the City insisted on compliance with the 1980 requirement. Sureway
agreed that its equipment would be upgraded to 1980 machinery within 30 days,
but nevertheless supplied the 1979 unit temporarily. The unit was in fact
upgraded and the City was content to let the matter “lie
peacefully.”
[158] The Supreme Court held at paras 71-73 that:
The conduct Double N complains of (i.e. the
waiver by the City of the 1980 requirement) is conduct which occurred after the
award of Contract B. Where an owner undertakes a fair evaluation and enters
into Contract B on the terms set out in the tender documents, Contract A is
fully performed. Thus, any obligations on the part of the owner to unsuccessful
bidders have been fully discharged. Contract B is a distinct contract to which
the unsuccessful bidders are not privy. In Ron Engineering, Estey J. held that
the "integrity of the bidding system must be protected where under the law
of contracts it is possible to do so" (p. 121 (emphasis added)). The law
of contract does not permit Double N to require the cancellation of a
contract to which it is not privy in the name of preserving the integrity of a
bidding process, which is by definition completed by the time an award of
Contract B is made.
In the face of a failure to perform Contract
B on the part of one of the parties, the other party has the contractual rights
and remedies set out in the contract and at common law. Bidders may be held to
perform as promised, or the owner may have the right to cancel the contract. It
is this range of remedies that acts as a disincentive to submit deceitful bids
as, absent collusion, bidders cannot predict how the owner will respond. Where
an owner determines that it is in its best interests to waive a term of the
contract, that is within its contractual rights unless the contract stipulates
otherwise. In this case, Condition 9 conferred a right of cancellation upon
the City where the successful bidder did not comply with the specifications. It
did not oblige the City to cancel the contract.
Finally, we note that there are good policy
reasons for rejecting Double N's position. The observation of Russell J.A., at para.
56, is particularly apt:
[P]arties to
contract B might be subject to constant surveillance and scrutiny of other
bidders, challenging any deviation from the original terms of contract A,
thereby ultimately frustrating the tendering industry generally, and
introducing an element of uncertainty to contract B.
[emphasis added]
[159] It is of note that the trial judge held that the “City was unaware of Sureway's deceit until after it had
accepted Sureway's tender. In his words, 'no one in the City knew as a matter
of fact that [Sureway] had bid the 1979 unit until August 28 or 29, 1986 and
that is after the contract had already been let to [Sureway]’ (para. 27).” The
Supreme Court accepted the trial judge’s findings that the City “was not aware of Sureway’s deceit until after it had
accepted Sureway’s bid,” notwithstanding that a
month prior to contract award and “on several prior
occasions”, Double N told the City of its suspicions of non-compliance
by Sureway.
[160] More recently, the Federal Court of Appeal in TPG v Canada No 1 FCA at para 23 stated
that
In the circumstances of this case, it seems
to me arguable that it makes no difference that some of the evidence upon which
TPG relies to prove the breach of Contract A relates to events that occurred
during the transition phase. TPG is relying on CGI's post-award recruitment of
incumbent resources to establish that the bid of CGI was not compliant when
submitted. In my view, Double N does not necessarily bar a claim for breach
of Contract A merely because the breach is proved in part by evidence of events
that occurred after the contract was awarded.
[emphasis added]
[161] I agree with the Federal Court of Appeal. Double N stands
for the proposition that once Contract B is awarded, a losing bidder has no
ability to insist that the contracting authority terminate the contract; once
contract B is formed, all rights and remedies exist only between the
contracting authority and the winning bidder. However, evidence of events
occurring after Contract B is awarded can be used as proof of a breach of
Contract A.
B. Compliance with A.24
[162] TPG’s main complaint relates to requirement A.24 of the RFP which is
repeated for ease of reference:
By submitting a proposal, the Bidder is
certifying that either:
(i) all the individual resources proposed
are employees of the Bidder: or
(ii) in the case of any individual proposed
who is not an employee of the Bidder, the Bidder is certifying that it has
written permission from such person (or the employer of such person) to propose
the services of such person in relation to the work to be performed in
fulfillment of this requirement and to submit such person's resume to the
Contracting Authority in connection with this solicitation. During the bid
evaluation, the Bidder must upon the request of the Contracting Authority
provide a copy of such written permission in relation to any or all
non-employees proposed. Failure to comply with such a request may lead to
disqualification of the Bidder's proposal
[163] TPG submits that A.24 requires bidders to have written permission
for any resources submitted in the bid, whether named individually or
referenced as a group. In oral argument, counsel set out his client’s position
as follows:
But A.24 says if you're going to put anyone
in your proposal, if you're going to advance a name -- or not a name, because
there's this thing about example resources -- but rightfully if you're putting
somebody in your proposal and they identify the incumbents, not by name, but as
a group, then you have to have their written permission. In my respectful
submission, that is both the letter and indeed the spirit of the provision.
It's what IBM and TPG did. And there's a certain logic to that, and a logic to
that interpretation. I think it's a fair and reasonable interpretation,
because the procurement authority needs to know that you're in a position to
deliver. If you don't have the permission of the people, how can you deliver?
[164] There can be no question that CGI proposed, first and foremost, the
incumbents – the then current resources providing services to TPG on ETS 1, and
there is no question that at the time it submitted its proposal it did not have
any agreement from them to do so. Although it had committed to pre-qualifying
its own employees as resources, this was expressly stated to be only a
contingency in the event that it was unable to retain the existing resources,
and in that scenario it stated that it was counting on the cooperation of
ITSB. Its proposal stated as follows:
The most important element in transitioning
the function is the retention and transition of resources currently providing
ETS services. CGI's approach to transitioning resources is designed to maintain
current service levels. There are four steps to this approach:
1. CGI will pre-qualify resources for all 66
categories as a contingency for the following point (2) of our approach.
CGI will ensure it has resources available for all 145 positions.
2. CGI will work with ITSB to identify the
current resources that ITSB considers to be key in delivering ETS services. CGI
will recruit all of those resources identified by ITSB for retention. In
certain cases CGI might be able to suggest a CGI resource that is better
qualified than the existing resource.
3. CGI will identify the resource gaps after
completing point (2) above and will fill those gaps with resources already
identified and pre-qualified. This identification and pre-qualification of
resources started during the development of our response to this RFP as noted
in point (1) above.
4. CGI will proactively contact the current
Service Provider after Contractor Selection (CGI Winning Bid Notification
Phase) to establish an agreement between our companies for the purposes of planning
a transition strategy of current incumbents' resources to CGI.
…
The retention of the majority of the
incumbent resources significantly reduces the risks involved in transferring
service delivery from one provider to another. This approach will allow ITSB
to benefit from the knowledge held by the current resources and also to benefit
from the corporate knowledge CGI is able to bring to the engagement.
In the event the incumbents are not
available, CGI will use its pre-qualified resources to ensure all positions are
filled as required. CGI is confident it can fill every required role.
[emphasis added]
[165] The Crown submits that A.24 must be read in context with the rest of
the RFP and when so read, it is clear that A.24 only relates to the 10 example
resources that are submitted with the bid pursuant to Requirement 2.5.1. It
submits that provided those 10 resources are employees of the bidder or the
bidder has written permission to bid those resources, the requirements of A.24
have been met. In closing, it was submitted that all that was required of the
bidder was an ability to show that they had the capability to “recruit and staff” as required for ETS 2.
[166] For the reasons that follow, I agree with the Crown that when read
in context, A.24 only relates to the 10 example resources submitted in a bid.
[167] First, as the Crown notes, A.24 specifies that for “any individual proposed” the bidder must have
permission “to submit such person's resume to
the Contracting Authority in connection with this solicitation”
[emphasis added]. This wording more closely aligns with the Crown’s view that
what is required by A.24 is permission to bid that individual and submit their
resume in the bid than it does with that of TPG. Moreover, when closely
examined, and despite what one might think of the Crown not requiring that
bidders actually have its own resources at the ready, the express words can
only be interpreted as proposed by the Crown because the only resumes required
were those to be submitted for the 10 example resources. No other resumes were
required to be submitted “in connection with this
solicitation.” Therefore, these are the only “individual[s]
proposed.” It is not possible to propose an individual person if you
have not identified that person and do not know who that person is. In my
view, A.24 does not extend further to what occurs after the bidding process –
for example to transition – nor does it extend to the actual performance of
Contract B.
[168] This interpretation is further supported by the fact that the list
of names of the resources who would actually perform the work was to be
submitted with the transition plan after contract award and not before.
Requirement 2.5 and several of the Questions and Answers make this clear.
Requirement 2.5 reads:
ITSB recognizes that over the course of its
contract with the Contractor, the specific resources that are supplied to
deliver services to ITSB will change, as individuals move and progress in their
careers. Accordingly, ITSB does not intend to examine and evaluate all
individuals that the Bidder proposes to provide to satisfy the initial
Function, Client Dedicated, and Task Authorization requirements defined in this
RFP. However, ITSB will evaluate ten (10) resources as an example of the
resources that the Bidder is able to supply.
[emphasis added]
Question 42 states:
RE: RIO.3 Transition Functions, page 41 of
70, b) A finalized Transition Plan will be submitted for approval by the
Project Authority no later than five working days following the review.
Is the successful bidder required to
identify the resources proposed for each position within each function when the
bidder submits its finalized Transition Plan for approval?
Answer 42:
Yes
Question 170 further
states:
This response now requires the successful
bidder to prepare resumes and related grids for 145 resources within 5 days of
contract award. This is a new requirement, and an unrealistic request that
favors the incumbent. In the interest of starting the project in a manner that
allows both parties to succeed, we suggest that the Amendment 4 Question 42 and
Amendment 9 Question 82 requirements be removed. This will allow for the focus
to be on the Transition plan in the first few days rather than just on naming
resources.
Answer 170:
The Bidder is to provide resumes for all
145 resources and submit the resumes with their finalized transition plan, which is within 10 days of contract award. Each resume proposed
will be evaluated against the classification requirements detailed in Annex A
Part III for each positions. In order for Canada to properly evaluate the
transition plan after contract award it is imperative that Canada be assured
that the personnel performing the transition are qualified as per the
classification requirements.
[emphasis added]
Finally, Question
141 makes the timing explicitly clear:
Question 141:
In Reference to Answer 105: ... The
Contractor will be required to provide the name of the specific individuals and
their firm.
At what time precisely must the contractor
provide the name of the specified individuals and their firm (e.g. within their
proposal at RFP closing)?
Answer 141:
The name of the specified individuals and
their firm will be required upon submission of the proposed transition plan.
[169] These components of the RFP make it clear that the only time
the names of all of the resources had to be submitted was alongside the
transition plan after contract award. It is at this time that individuals
beyond the 10 example resources would be “proposed.”
[170] Further, in Question and Answer 61, PWGSC made clear that the bidder
is not required to demonstrate capacity at the time of contract award. It is
only through the transition plan that this capacity is verified:
Is it a mandatory requirement that the
bidder have the proven capacity of delivering the 145 resources described in
Annex A Part II within the National Capital Region (NCR) at the time of
contract award?
Since the 10 Example Resources represent
less than 7% of the required resources, they do not have to be resident in the
NCR, have government security clearance or, in fact, even be available at time
of contract award (re: RFP Amendment 001, Answer 7); it is unreasonable to
accept them as a demonstration of proven capacity to deliver 145 resources, of
the highly technical nature required, within the NCR.
Additionally, unless one or more of the
three corporate references provided are for a client within the NCR; the
corporate references will not demonstrate a proven capacity to deliver the
required resources within the NCR.
Given this situation, what criteria will
PWGSC use to determine that a bidder has a proven capacity to deliver the
required number and quality of resources within the National Capital Region?
Answer 61:
This RFP does not specifically require
that the Bidder demonstrate its capacity in the NCR at the time of contract
award. The RFP evaluates the Bidder's capacity to provide the resources
required, and also to demonstrate its recruiting and retention processes. This
capacity will be verified through the Transition Plan and acceptance exercise.
[emphasis added]
[171] PWGSC never intended to examine the full palette of resources
submitted – it recognized that its needs would change and that some of the
resources proposed may move on in their careers. It therefore wanted to
evaluate the bidders’ ability to supply qualified resources and it measured this
based on “corporate capability.” For example,
the answers to Questions 4 and 11 state, respectively:
The Request for Proposal is structured in a
way to examine the Corporate capability of the Bidder to provide the required
resources based on their capability and documented past performance. For
example, see Annex D-1, Evaluation Criteria, 1.3.2.4.3.
It is PWGSC’s intent to validate Bidder’s
ability to provide required resources ... during the Evaluation phase by way of
Corporate evaluation criteria. See Annex D-1, Evaluation Criteria, 2.5 Example
Resources for additional reasons for not evaluating every single resource prior
to Contract award.
[172] The position being advanced by TPG seems eminently reasonable - that
a party seeking ITS services should wish to be satisfied that those advancing
proposals have appropriate qualified resources available to fulfil its needs if
awarded the contract. Nevertheless, it is clear from reading the RFP as a
whole and particularly Question and Answer 12 that this was not the approach
that was being taken by the Crown in this RFP.
Question 12:
The current structure of the RFP makes it
possible for a bidder to be selected as the winner without having a single
qualified resource available to meet the service requirements defined in the
RFP. By arranging the RFP in this manner, PWGSC is providing an unfair
financial advantage to such a vendor since they can ignore the real costs for
such highly technical resources and propose fictional per diem rates, while
those bidders who are providing legitimate proposals must incorporate rates at
which they can be confident that they can deliver real resources.
Since PWGSC's and its OGD clients' core
business processes depend on the reliable and consistent delivery of these
services, this represents a significant risk to the Government of Canada.
What substantive steps will ITSB take to
protect its PWGSC and OGD clients, and mitigate this major risk, by preventing
a bidder from being selected without having the required skilled resources available?
Answer 12:
The Request for Proposal is structured in
a way to examine the Corporate capability of the Bidder to provide the required
resources based on their capability and documented past performance.
[emphasis added]
[173] As another example of how little if any reliance was placed on the
specific resources identified in the bid, PWGSC did not even require that the
example resources proposed in the bid be delivered to actually perform the
contract. Question 7 reads:
We can find no requirement that the bidder
must provide the services of the personnel submitted as example resources if
they are awarded a subsequent contract. We request that PWGSC clarify whether
or not the example resources are required to be provided ...
Answer 7:
The actual resources presented as ‘example
resources’ by the Bidder will not be required if the resource is not
available at contract award, as long as replacements are provided that meet the
minimum criteria...
[emphasis
added].
[174] Further evidence that it is only the bidder’s ability to recruit
that is being evaluated comes from rated requirement 2.4.1 which states:
The proposal should include a description of
the Bidder's recruitment management process to ensure the availability of
qualified and experienced resources during the Contract period. The proposal
will be rated on the extent to which the following is satisfactorily addressed:
1. Sources of potential candidates;
2. Process for identifying, documenting and
storing potential candidate experience, qualifications, and skills;
3. process for identifying resource
classifications in which knowledge of and experience delivering services within
an ITIL framework would be beneficial, and prioritizing candidates who are
ITIL-certified and/or who have experience delivering services within an ITIL
framework;
4. ability to respond to an urgent need for
additional resources for existing classifications of resources already detailed
in the Statement of Requirements - Part III, by identifying sources of
resources and the Bidder's proposed process that can reasonably be expected to
deliver candidates in an urgent manner;
5. ability to respond to an urgent need for
additional resources for new classifications of resources not detailed in the
Statement of Requirements - Part III, by identifying sources of resources and
the Bidder's proposed process that can reasonably be expected to deliver
candidates in an urgent manner;
6. Structured interview techniques and
skills evaluation processes including testing mechanisms.
I note in passing that criterion
2.4.1 was weighted at 4.35%,
higher than either 3.3.3 or 3.3.5. Clearly, PWGSC placed great emphasis on the
bidder’s ability to identify and recruit resources.
[175] In my view, the only reasonable interpretation of A.24 and the RFP
as a whole is that only 10 resources were expected to be specifically
identified, and those resources had to comply with A.24. CGI was compliant
with that requirement.
[176] It was CGI’s plan from the outset to attempt to retain as many of
the incumbent resources as possible in order to mitigate the risks to ITSB of a
transition to a new Contractor. It asserted that it had pre-qualified
resources and that it would have sufficient resources from its pool to ensure
that every role would be filled.
[177] At trial, the Crown argued that there is a distinction between
proposing someone’s services, and proposing to recruit their services. I
accept that fine distinction. In my view, CGI proposed to recruit the TPG
resources – it would offer the incumbent resources service contracts or
employment – but it was up to those resources to accept or decline the offers.
CGI did not promise that it would deliver all or even any of the incumbent
resources. Given that there had to be some voluntary act on the part of the
incumbent resources, it cannot be said that CGI “proposed
the incumbents” as TPG alleges. What CGI proposed was what several
witnesses including Mr. Powell confirmed was standard industry practice - a new
supplier would attempt to recruit incumbent resources.
[178] It was evident that Mr. Powell was frustrated by CGI’s recruitment
of TPG’s resources in light of the Authorization to Bid agreements it had in
place that restricted their ability to work for competitors. Because of these
agreements, TPG believed that any competitor who wished to recruit the TPG
resources would have to negotiate directly with TPG and not with the individual
resources.
[179] In my view, these agreements are irrelevant to the issues in this
litigation. They did not prevent CGI from offering these resources positions
to provide services under ETS 2. It was up to the individual resource to
accept or decline such offers from CGI. There was nothing in the agreements
which obligated CGI to deal directly with TPG if it wished to approach its
resources. If the individual resources wished to breach their agreements and
engage in discussions with CGI, that was their choice.
[180] To summarize, all bidders were required to certify that the 10
example resources, whose resumes were being submitted along with the bid, were
either employees of the bidder or that the bidder had written permission from
those resources, nothing more. PWGSC had no intention of evaluating any
resources other than those 10 examples until it received the winning bidder’s
transition plan. In any event, CGI did not “bid the
incumbents.” Instead, it proposed to recruit as many of the incumbents
as possible, but that in any event, it would draw on its immense pool of
resources to fill any gaps in recruitment.
C. Did CGI Submit the Required Number of Resumes?
[181]
TPG alleges that CGI did not submit the required
number of resumes with its transition plan. In its view, 159 resumes were
required and CGI only submitted 133 with its transition plan on November 14,
2007.
[182] TPG claims that the 133 resumes did not include the Client Dedicated
Resources. In its view, these resources were required to be submitted along
with the 133 resources that would fill the function positions. It points to
Question and Answer 76 which states:
Question 76:
Request for Proposal, page 41 of 70, section
B.10A outlines four methods to provide services:
o Provision of Services Authorized by Task
Authorization
o Provision of Work Authorized by Functions
o Provision of Work Authorized by Client
Dedicated Resources
o On-Call Services
a. i) Please indicate the current staffing
levels for each of these four methods. For example, how many of the resources
under the current contract are authorized by Task Authorization vs. Client
Dedicated Resources?
ii) The response to Question 2 provided in
Amendment 1 indicated that there are currently 47 resources fulfilling
requirements through Task Authorizations. Would these be considered
"Client Dedicated Resources" or Task Authorization services?
iii) Are these 47 part of the staffing
numbers provided in Annex A, Part II Scope of Work, Section 12 Engineering and
Technical Support Domains?
b. i) Does the table in Annex A, Part II
Scope of Work, Section 12 Engineering and Technical Support Domains include all
resources being contracted using all four methods?
ii)The Enterprise Server Domain includes
Client Dedicated Resources. Is this the only domain that will require these
resources?
iii) Is it the only domain that employs
these resources currently?
Answer 76:
a. i) Task Authorization 47, Function = 133,
Client dedicated = 26, On call = maybe all
ii) Task Authorization
iii) No
b. i) No, other Domains have Client
Dedicated resources
ii) No, all other areas may have
requirements for Client Dedicated resources
iii) No, all other areas may have
requirements for Client Dedicated resources.
[183] If the 26 Client Dedicated Resources identified in Question 76 are
added to the 133 required resources, the total number of required resources is
159. TPG’s position is further supported by the fact that the table requiring
145 resources in the original RFP was amended by the Question and Answer to a
table that included Cient Dedicated Resources for each of the ETS domains.
This number of resources identified in this table totalled 159.
[184] This issue treads very close to the line set out in Double N
Earthmoving because this evidence goes to events occurring after the award
of Contract B. In my view, even if it were true that 159 resumes were required
and only 133 of those were submitted by CGI, that fact does not tend to either
prove or disprove whether Contract A was breached. TPG has led no evidence to
suggest that PWGSC knew that CGI intended to deliver fewer resumes than
required.
[185] CGI’s bid indicated on its face that 145 resources would be
delivered (the number then required): “CGI will ensure
it has resources available for all 145 positions.” This is in
compliance with the requirements set out by question 170 in the RFP, reproduced
in full above: “The Bidder is to provide resumes for
all 145 resources and submit the resumes with their finalized transition plan,
which is within 10 days of contract award.” It cannot be said that 159
resumes were required when what was explicitly asked for was 145.
[186] Further, several provisions in the RFP make clear that the
requirements could change at any time and either grow or shrink. Requirement
4.6.1 provides such an example:
At the outset of the Contract all services
shall be provided by the Contractor through the provision of a team of
personnel to carry out various Function(s) and Project(s). ITSB shall retain
the option to change the scope of the work such that the change involves:
1) An increase to the scope of a Function or
Project.
2) An addition of a Function or Project.
3) A decrease to the scope of a Function or
Project.
4) A decrease through termination of a
Function or Project.
5) Acceptance and implementation of a
Business Case to improve the efficiency of a Function.
6) A change from "Level of Effort
Services" to "Results Based Services".
Under B.10.4, item 3 provides:
3. Provision of Work Authorized as Client
Dedicated Resource Requirements
a) Client Dedicated Resource Requirements
are requirements for one or more resources to provide Professional Services to
support a specific ongoing task over an indeterminate period of time within the
Contract Period. The specific Resources are normally required to perform work
on a Client site.
b) Client Dedicated Resource Requirements
may be specified at any time during the Contract Period.
c) The Contractor shall perform the work
associated with various Client Dedicated Resource Requirements which are
described in the Statement of Requirements Part Ill.
d) The Contractor acknowledges that over the
Contract Period, the work associated with any Client Dedicated Resource
Requirements may change such that there may be an overall increase or decrease
to the work requirements of the Contractor and a resulting change to the number
of Contractor resources required to provide Professional Services associated
with the Client Dedicated Resource Requirements.
e) Any changes to requirements associated
within any Client Dedicated Resource Requirements, including but not limited to
the termination of a Client Dedicated Resource Requirement or the
implementation of a new Client Dedicated Resource Requirement, shall be authorized
through a duly approved Contract Amendment.
f) Client Dedicated Resource Requirements
may be terminated by Canada, at its convenience, upon 10 days prior written
notice to the Contractor. Charges associated with Termination for Convenience,
as specified in the General Conditions, shall not apply provided such prior
notice is given.
Finally, 3.0.1 states:
3.0.1 Function Requirements Disclaimer
The requirements specified in this Domain
represent the Functions that exist at the time of releasing the Statement of
Requirements. It should be recognized that as a significant period of time
shall elapse between the release of the Statement of Requirements and the
ultimate award of a Contract, it is possible that:
• Functions as stated could be removed
• Functions could be added
• Function information as stated could be
changed
The requirements specified in this Domain
represent the staffing requirements of the Functions as specified at the time
of releasing the Statement of Requirements. It should be recognized that as a
significant period of time shall elapse between the release of the Statement of
Requirements and the ultimate award of a Contract, it is possible that:
• Staffing requirements as stated could be
reduced
• Staffing requirements could be increased
• Staffing requirements as stated could be
changed
• To amend the
number of resources by Classification
• To remove
certain Classifications
• To add
classifications.
The requirements specified in this Domain
represent the skills, experience and knowledge for the Classifications that
exist at the time of releasing the Statement of Requirements. It should be
recognized that as a significant period of time shall elapse between the
release of the Statement of Requirements and the ultimate award of a Contract,
it is possible that:
• Certain requirements defining experience
and knowledge could change to reflect the requirements that are appropriate
• Certain requirements defining experience
and knowledge could be eliminated as products and tools are retired, replaced
or eliminated
• Requirements of experience and knowledge
could be added to reflect changes in technology
[187] These provisions clearly indicate that PWGSC contemplated that
requirements could change between the issuance of the RFP and contract award
and the above provisions could explain the move from 145 resources to the
eventual 133 that were requested and accepted by PWGSC. Question 79 explicitly
set out what was expected of bidders:
Question 79:
Reference: page 40 of 70, B.I 0.3 Transition
Functions
The Bidder shall begin to deliver services
according to the requirements in this RFP no later than 60 working days
following the acceptance of the Transition Plan as detailed herein.
We can find no where within the RFP
documents where it is specified what exactly what must be delivered by the
winning bidder. Three domains, 19 functions and 145 resource positions are
detailed within Annex A Part III but the importance of the number and nature of
these domains, functions and resources is dismissed by clauses 3.0.1, 4.0.1 and
5.0.1, within Annex A Part III…
This ambiguity might be acceptable if the
RFP was for a supply arrangement where the government is not committing to any
volume of work; however this RFP is stated as being for a specific contract to
deliver specific resources to PWGSC to perform specific duties, Moreover, we
are required to propose a management structure that will be included as part of
the deliverables.
The nature of the RFP requirements mandates
that these management individuals be senior technical management resources.
Resources of this type are quite expensive to attract and retain. Additionally,
because the management team is not directly billable, their cost has to be
built in (as overhead) to the per diem rates for the technical positions.
Obviously, depending on the number of
resources required, this management overhead can have a very significant cost
impact on a bidder's financial proposal. However, the number and nature of the
management resources required to ensure that PWGSC receives the level of
service demanded is very much dependant on the number and types of functions
and technical resources to be managed. Should, as clauses 3.0.1, 4.0.1 and
5.0.1 allow, the number and nature of domains, functions and/or resources
change at contract award time; we could be required to allocate significantly
more management resources than originally estimated based on the RFP document.
Additionally, should any vendor have
information that the structure will decrease significantly by contract award,
they could lower their proposed per diem rates knowing they will never have to
cover the costs of a robust management team. This would obviously give them a
significant advantage in the financial evaluation.
Therefore, without knowing the specific
number and nature of domains, functions and resources that we must provide and
manage at contract award time, we are not being provided with enough
information to create competitive response to the RFP.
Additionally, this ambiguity could provide a
vendor with inside knowledge and unfair advantage. Therefore, in order for the
bidders to be able to construct informed and competitive proposals and to
ensure that the competition is fair and open, we request that PWGSC state the
exact number and nature of domains, functions and resources that must be
provided and managed at contract award time.
Answer 79:
For the purpose of this RFP the requirements
identified in Annex A part III are to be bid as if no changes will occur.
If changes materialized at contract award the Contractor will be notified and
given sufficient time to adapt to the changes.
[emphasis added].
[188] Under Annex A, Part III – Statement of Requirements, the staffing
requirements for each of the functions under the contract are explicitly set
out. These total 133. In the same Annex, the following details surrounding
the Client Dedicated Resources are included:
6.0 Client Dedicated Resources
Client Dedicated (CD) Resources are staffed
with resources that perform work for certain Other Government Department (OGD)
clients. Their roles and responsibilities will vary from client to client,
however they will only perform work for the clients they are assigned to. They
will be given the work assignment detail, including the reporting relationship,
once the service level agreement between ITSB and the Contractor has been
finalized to describe the functions, roles, and reporting relationship for the
CD staff on a per OGD team basis.
The CD resources generally work at the
client site.
The reporting relationship in the CD
Resources falls under one of the following two structures:
• One or two resources supplied to
OGD and can be managed by the contractors management team
• Larger unit that has a senior level
contractor supplied resource that would be in charge of this team at the OGD.
This senior level contractor is expected to complete his/her work as per the
service level agreement and to assist in the management of the Contractors
team, which includes determining their workload priorities and reviewing their
performance.
The work performed by the CD Resources can
be assumed to be similar to that described under the Functions in the three
Domains, being:
Enterprise Server Domain
• Enterprise
Server Migration and Customization
• Capacity
Planning
• Disaster
Recovery Plan Development
• Production
Centre Infrastructure Engineering
Cross Platform and Network Domain
• Cross
Platform Engineering
•
Production Network Support
•
Production Network Engineering
• PKI Secure
Applications
Support Services Domain
• Database
Administration
• Security
and logical Access
• Asset
& Infrastructure Management
• Web
Development
It therefore can be concluded that some of
the CD Resources would require a certain amount of the skills and experience
that cross the Functions as described in previous sections.
The clients serviced under this arrangement
include Transport Canada and Canadian Intellectual Property Office.
• Currently there are 12 resources performing work for the two
clients identified above.
• The details of the requirements
for this Function shall be provided to the Contractor upon contract award.
[emphasis added]
[189] Mr. Boileau confirmed that in some cases, PWGSC did not even know
the requirements for the Client Dedicated Resources and were not in a position
to provide these to the winning bidder until sometime after contract award:
Q. I'm going to ask you to explain this to
us. I will go back to Ms. McKeown's question. How was it that you weren't
aware of the Client Dedicated positions for CIPO and others?
A. From what I remember, when I first got on
the job, the first thing I did is I did what I called a “current state” meaning
tell me, give me the list of who is onsite and so on in terms of TAs, in terms
of Client Dedicated and in terms of incumbent. These two positions, they never
showed up in the current state, so it was a surprise to me and to other folks
in BPMS, the procurement support folks. Perhaps it was our fault, I don't
know, but I'm just saying that we were not aware of it.
…
Q. In relation to this issue, this e-mail we
were just looking at, you have described that you didn't know about those
positions. The 133 resources that CGI had to provide a list of, were they
aware of these positions? Had they been notified of them back when they had to
provide the 133 resources list on November 14th?
A. These two are not part of the 133. They
are Client Dedicated which is another group, and I believe it's in the contract
but it was not specified. We didn't ask for CGI, I believe, if I remember, to
name people for Client Dedicated.
[190] Ms. Charette confirmed that on November 20, 2007, ITSB had not fully
determined the extent to which Client Dedicated Resources were needed:
Q. Can you tell us: The 133 resources, does
that include Client Dedicated resources?
A. No, it doesn't.
Q. Why was that?
A. Because the requirement for Client
Dedicated wasn't fully fleshed out at that time by the client ITSB, they
weren't quite sure what that was going to look like, so the requirement was to
have the 19 functions fully staffed but the Client Dedicated would be done a
little bit later.
Q. How does that work?
A. They would have done the same process.
ITSB would have told CGI what the requirement was for the resource profile,
what kinds of resources were required and their credentials. They would have
asked them, then, to propose these individuals with their resumes demonstrating
that they meet the qualification grids.
[191] Mr. Powell himself acknowledged that the RFP did not define the
skills and qualifications required for the Client Dedicated Resources:
Q. So stopping there. There is no issue
between you and I about the 133 that are defined by function, the ones we just
looked at, right?
A. Right.
Q. And I'm going to suggest to you that a
winning bidder did not have to identify the remaining 26 client identified at
that time, and you disagree with me on that.
A. Where does it say that?
Q. We will talk about that.
A. The details, will be provided at contract
award. 10 days later you need the resumes and the people.
Q. You agree with me that at the time of
submitting a bid, certainly, none of the contractors knew what even the
requirements for the Client Dedicated were going to be, right?
A. Fair enough.
Q. They come later.
A. Yes.
Q. And if you don't know the functions,
obviously you can't name the individuals, right?
A. Fair enough.
Q. I'm going to suggest to you, Mr. Powell,
that it will be the evidence in this trial of Michele Charette and Mr. Pierre
Demers that the information about the 26 Client Dedicated resources was
ultimately provided in March 2008.
A. So they again violated --
Q. Do you have any reason to disagree with
me on that?
A. They violated the terms of the RFP again,
I guess. It says right there they are going to identify them at contract award,
so I guess they just ignored that, did they? I don't know.
[192] It would have been impossible for a bidder to provide a list of
individuals to fill requirements that were not known to them. As for Mr.
Powell’s concern that PWGSC violated terms of the RFP by not identifying Client
Dedicated Resources at contract award, this is simply irrelevant in light of
the RFP’s clear language that requirements could be changed at any time by
PWGSC.
[193] Further, the delivery of resumes following the award of contract was
intended to be a dialogue between the winning bidder and PWGSC. It was not
intended that all resumes submitted needed to be accepted immediately or the
contract would be terminated, nor was it intended that there be a strict number
of resumes submitted. The only requirement was that all functions be filled.
The transition plan was meant to be a fluid concept that changed according to
the needs of PWGSC, as expressed in the RFP and Question and Answer 60:
The Contractor shall meet with the Project
Authority (PA), at a mutually agreeable time within five (5) working days after
the Contract Start Date to review the Transition Plan submitted in the
Contractor's Proposal. Based on this meeting, the Contractor shall adjust the
Transition Plan to meet any detailed requirements specified by the Project Authority.
…Rejection would be a final action. As
opposed to rejection, the Transition Plan may require modification prior to
being accepted by the Project Authority.
[194] In short, if the number of resumes that were submitted were less
than the number set out in the RFP, that is a breach of Contract B, not
Contract A. Moreover, given the fluidity in the number that PWGSC might
request, that evidence does not establish that CGI’s proposal was in breach of
the RFP and thus non-compliant.
[195] In my view, on the totality of the evidence, the requirements for
Client Dedicated Resources changed as time passed (as they were entitled to)
and it is clear that the final details for the requirements for Client
Dedicated Resources were only to be provided to the contractor on contract
award and not before. This is supported by the fact that parts of the RFP
explicitly acknowledge that Client Dedicated Resources, and in fact,
requirements for any function, were subject to change in accordance with
PWGSC’s needs at that given time. It would be impossible to hold the winning
bidder to a particular number of resources given the fluid nature of the
requirements. In any event, bidders were requested to bid assuming the
requirements set out in Annex A Part III would remain unchanged. Those
requirements only identified 133 resources, which is what was submitted by CGI.
D. Did PWGSC Assist CGI in Recruiting TPG Resources?
[196]
TPG alleges that PWGSC improperly assisted CGI
in recruiting the incumbent resources. To be clear, TPG has not alleged any
improper conduct on the part of PWGSC. All claims of bad faith, misconduct,
bias, fraud, or unconscionability, as well as any claim related to inducing
breach of contract, have been abandoned. Therefore, TPG’s complaint of PWGSC’s
conduct is only relevant to the extent that it demonstrates PWGSC’s knowledge
of any non-compliance by CGI.
[197] TPG points to internal documents that show PWGSC was concerned about
the ability of CGI to deliver the incumbents after the contract was awarded.
In my view, these documents are irrelevant. First, delivery of the incumbents
is not a requirement of the RFP, nor was it a promise given by CGI. Again, it
emphasized that it would recruit as many incumbents as possible to mitigate
risk. Second, even if delivery of the incumbents was a requirement, these
documents do not show what TPG needs to show which is that PWGSC knew at the
time CGI’s bid was accepted that CGI was non-compliant. These documents
simply show that as the time for transition drew nearer, there were some concerns
about how many of the incumbents would be retained. This is not relevant for
determining whether the procurement process was carried out unfairly.
[198] TPG also points to evidence of PWGSC’s request for “interviews” to
transition the functions over to CGI, which TPG suggests were “thinly veiled attempts by PWGSC to assist CGI in recruiting
team TPG.” Again, given that all claims of bad faith and inducing
breach of contract have been dropped, the fact that PWGSC may have assisted CGI
in recruiting TPG resources after contract award does not prove one way or
another that it knew that CGI’s bid was non-compliant.
E. The Transition
[199]
TPG also alleges that CGI did not complete
transition in time and that the transition was disruptive, contrary to the
terms of the RFP. This, TPG suggests, indicates that PWGSC knew that “CGI could not produce a team for the purposes of
transition.”
[200] Like TPG’s allegation of improper recruiting of resources, evidence
of the effectiveness of the transition, in my view, is irrelevant. First,
whether or not the transition was actually successful does not prove one way or
the other that PWGSC knew that CGI would be unable to transition the functions
successfully. In my view, TPG has simply led no evidence that PWGSC could have
known at the time it accepted CGI’s bid that transition might be
unsuccessful.
[201] Second, TPG’s complaint of transition issues is exactly the type of
conduct that the Supreme Court of Canada warned against in Double N
Earthmovers at para 73: “[P]arties to contract B
might be subject to constant surveillance and scrutiny of other bidders,
challenging any deviation from the original terms of contract A, thereby
ultimately frustrating the tendering industry generally, and introducing an
element of uncertainty to contract B.”
[202] Third, although TPG pointed to evidence of panic and stress among
employees of PWGSC during transition and the transition being carried out in a
less-than-ideal manner, the record also shows that there was no disruption to
the ETS infrastructure or user community.
[203] TPG points to some PWGSC employees describing the difficulties with
the transition, for example, Don Bartlett:
Q. And the word "SWAT" does that
actually mean anything or is it supposed to refer to kind of like a SWAT police
team? Can you tell me?
A. It's an unfortunate term. That's what it
was called for whatever reason. I didn't coin it.
Q. It's like an emergency team?
A. It was like an emergency meeting, yeah,
just to manage the transition, which was rapidly becoming a difficult situation.
[204] However, the document being referred to in Mr. Bartlett’s testimony
reveals that at least some of the difficulty with the transition related to the
availability of documents and confusion surrounding the Crown’s obligations and
rights, aspects wholly unrelated to CGI’s role in the transition.
[205] Mr. Swimmings described situations where clients were unhappy and
alarmed in an email dated November 14, 2007 (the date CGI’s transition plan had
been submitted, but two weeks prior to its acceptance):
Hi Michel,
I am very concerned about parts of the PWGSC
transition strategy for the ETS contract. The biggest concern is the timeline
of 60 days or December 21, 2007 which I think exposes our clients to
potentially degraded service and PWGSC in a bad light especially in terms of
proceeding with Shared Services.
The RFP states transition in the following
manner: There is 10 days to get the resumes, 60 days to transition, several 15
day extensions if they do not meet the acceptance criteria and then if they
still do not meet the criteria the process can be repeated. The new vendor
does not get paid during this time. Obviously if incumbents decide to work for
the new vendor then this process will be smoother but I get the impression lots
of incumbents feel hostile to CGI due to the low per diem they offer.
The driving factor for the tight deadline is
the fact that PWGSC had to negotiate with TPG to get the extension to December
21, 2007. Their contract has been extended several times so it is not like we
can not do it again until we feel we can accept that the new contractors can
perform the functions our current contractors do. I am sure it will be
difficult to negotiate this but it is better to have people more prepared to
perform the functions than it is to just hold our noses and proceed with people
who do not understand the environments, the relationships of clients, the
technical intricacies, the many processes, the internal workings of PWGSC and
frankly it is not fair to them or our clients.
How many SLA's will suffer if we are
ill-prepared? The RFP was written so we could protect ourselves so we should
ensure we do. Let us test our functions' criteria thoroughly. Each function
manager can interview the new people and actually create specific tests for
them to perform to see if they understand the 'how to' of the function before
we accept the new contractors. This can be done several times during the
transition to see if they are gaining an understanding of the environments,
relationships and processes.
It has been a rocky road the last year
regarding the ETS contract, let us not make it rockier by rushing the
transition.
Other concerns: (which I believe are being
addressed?)
How do we find space to put the new
contractors with the old contractors for knowledge transfer?
Who vets their PCs before we allow them to
be connected to our network and where do they connect?
How do we do large group requests for
OSSRO's, security, badges, access to drives, specific software requirements
etc.?
What do we tell our clients?
[206] Again, while there is some indication of panic and concern, nothing
identified in Mr. Swimming’s email is attributable to CGI. In fact, Mr.
Swimmings notes that the main issue making the deadline seem tight is the
negotiation that occurred between TPG and PWGSC. Further, it must be
remembered that prior to November 2007, TPG had initiated numerous complaints
and brought several applications before the Federal Court and the CITT. Other
concerns relate to logistical concerns outside the responsibility of CGI such
as physical space, technology vetting, and security clearances.
[207] No doubt, transition was not occurring in an optimal fashion. There
were few people on site to shadow the incumbent resources – a practice that
several witnesses, including Mr. Bartlett described as the ideal way for
effective knowledge transfer to take place:
A. Well, not necessarily that, but I think
it was shadowing. We had thought that the new service provider would shadow
the TPG resources there, you know, sort of learn the ropes, so to speak.
Because I think it's simplistic to -- a very technical environment to just hand
somebody a bunch of binders and say: Here, do your job. In a perfect world you
might be able to do that, but there are always, you know, hidden things or little
-- I don't want to call them secrets, but things you only know by doing the
job. So we had hoped that there could be a period of shadowing, and I believe
that's what CGI wanted to do.
Q. Did you, in your own group, in your
function, did you see any shadowing?
A. No, no. No, I don't think TPG would
agree to that.
Q. Do you know whether they agreed to it or
not?
A. I'm positive they didn't.
[208] However, irrespective of the concerns expressed, the reality is that
the transition occurred without the disruptions that the functional managers
were concerned about. For example, an email chain starting on December 22,
2007 – the day after the transition – reveals what was accomplished as of that
date:
Ok our work is done for the day. This
concludes the end of phase 1 of the transition from the TPG team to CGI team.
Listed below are some of the activities that were completed as a result:
* All the teams (i.e. Functional Managers,
Domain Managers, Helpdesk support folks, LRA folks, Thin Client folks, Tech
Support folks, M/F Access folks, Infoman folks, facilities folks, Mid-Range
folks, Mainframe folks, Network folks, operations folks, etc.) provided 200%
supports, on-site and off-site;
* TPG resources vacated all sites as of 5 PM
yesterday;
* Everything has run smoothly... 50 CGI
resources were indoctrinated today at APDC, KEDC, and PDP;
* All proposed IBM resources are
indoctrinated as well;
* Dedicated clients are covered during the
holidays;
* Functional Managers have personally showed
up to provide oversight;
* The CGI Team were absolutely outstanding
as well…very well organized;
* IT Operations were on site to ensure
smooth transition and continuity of support;
* All CGI workstations has been delivered,
installed and tested;
* All accesses were tested and under control;
* On-Call resources are adequately equipped
with CGI pagers;
* Infoman and automated systems have been
updated with new pagers numbers;
* Any service impacted incidents will follow
normal operational processes;
* After hours support structure is intact
... on-call plan is now operational (attached);
* We are covered on all aspect of
operations;
* Staffing level through the Holidays period
is more than adequate (allows for additional trg time); and
* In case of extreme emergency situations,
CGI has a direct line to their call centre in Montreal.
I feel that we are in a very good posture
operationally as a result of the Crown/CGI working very well together. I
would like to add that CGI Domain managers and the Crown Functional managers
(Rita Jain and Dave Holdham) did an
outstanding job and are the cause of this weekend successful transition from
the TPG team to the CGI team. Also, a special thank to all of the Directors who
ensured (via their staff) optimum support through this phase.
Lastly, I feel very confident that all of
the bases are covered for the holiday season. Please note that there is still a
lot of work to be done such as the acceptance of the complete team of CGI
resources in the functions. We still need to formally accept the functions and
staff up on Task Authorizations as required, etc.
Thus we are going to be very busy still for
the next two months.
[209] There were no service interruptions despite the abrupt switch over
of personnel from the incumbents on December 21, 2007, to CGI on December 22,
2007.
[210] Further, by March 28, 2008 all 133 functions had successfully been
transitioned over to CGI, as outlined in an email from Mr. Boileau to Mr.
Rondeau:
Patrice, the ETS transition of all 19
engineering functions has formally and successfully been completed as of Mar
26th within the prescribed number of days of the contract (105 days ...
confirmed).
The transition of the 19 engineering
functions from the incumbent provider (TPG) to the new service provider (CGI)
was relatively transparent from an operational perspective. No major outages or
client impacts were recorded as a result of the transition. Despite the low
quality knowledge transfer from the incumbent service provider, the new service
provider managed to maintain all IT services at 100% capacity and day-to-day
incidents were resolved in a timely manner as per the approved SLAs
…
Additionally, the ETS resources were all
successfully trained with our newly implemented ITIL methodologies and
processes within our IT operations. The ETS transition overall was a complete
success!
[211] Mr. Boileau testified that transition occurred within the timeframe
contemplated by the RFP Questions and Answers:
[Subject to extensions provided for in the
RFP] The Bidder shall begin to deliver services according to the requirements
in this RFP no later than 60 working days following the acceptance of the
Transition Plan as detailed herein.
[212] In sum, despite initial frustrations and concerns regarding the lack
of knowledge transfer and the concerns about service interruptions, transition
of all functions was completed successfully by March 28, 2008, with no major
service interruptions. CGI was compliant.
XVI. Conclusion
[213]
For the reasons given above, the Court finds
that (1) TPG failed to fully utilize the avenues of redress provided for in the
CITT Act - and this is a full defence to the claim; (2) the evaluation of TPG's
bid by PWGSC was not done fairly and equitably however, there is no evidence
that this breach of Contract A resulted in TPG suffering any loss; and (3) CGI
was compliant with the RFP and there was thus no requirement that PWGSC
disqualify it and award the contract to TPG.
[214] Although TPG proved unfairness, it was not successful in this action,
and the Crown is entitled to its costs. As indicated at the close of trial,
the Court will retain jurisdiction on the issue of costs, if the parties are
unable to reach agreement. Failing agreement, the Crown is to serve and file
its costs submissions (not exceeding 15 pages), within 20 working days of the
date of these Reasons, TPG shall respond within a further 15 working days, and
the Crown may file a brief reply (maximum of 5 pages) within 5 working days
thereafter.
[215] I must express my appreciation to all counsel (including their law
students and clerks who undoubtedly had much involvement with this case) for
their most helpful submissions and, in particular, for the very professional
manner in which this trial was conducted.
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