Overview
If a procurement is covered by a trade agreement, the time limit within which an objection to a government institution or a complaint to the Canadian International Trade Tribunal must be made is short and strictly enforced. It is important to understand when and how these time limits are triggered to preserve your rights if your bid is unsuccessful.
Things Did Not Go As Planned - Now What?
Bidders on federal government procurements covered by a trade agreement[1] have access to the Canadian International Trade Tribunal (CITT) procurement complaints process. The CITT is an expert tribunal, providing a fast and efficient complaints process as an alternative or adjunct to legal proceedings in provincial or federal court.
Once the CITT accepts a complaint for inquiry, it is required to render a final decision within no more than 135 days. In order to maintain the efficiency of this process, the time limits that apply to procurement disputes are very short and strictly enforced.
Disputing a Government Institution Decision
The CITT Procurement Inquiry Regulations (Regulations) provide for a two-stage bid dispute process. However, there can be instances where the first stage is rendered redundant, and an unsuccessful bidder must proceed to stage two to preserve their rights.
Stage 1: Submit an Objection
Although the objection process is a less formal process than a complaint to the CITT, don't take it lightly - the timing and content of an objection can significantly impact the success of a future complaint to the CITT.
The objection process provides an opportunity for the bidder and the government institution to settle a procurement dispute in advance of the more formal CITT complaint process. The unsuccessful bidder submits their objection directly to the government institution and the government institution responds directly to the unsuccessful bidder.
An unsuccessful bidder must make an objection to the government institution within 10 working days from the day on which it knew, or ought to have known, the basis for an objection.
What Should the Objection Address?
There is no specific form that must be completed when submitting an objection. But the content of the objection is critical - all known grounds of objection need to be included. If a bidder later decides to submit a formal complaint to the CITT, the CITT may refuse to consider any grounds in the bidder's complaint that the CITT determines the bidder knew or reasonably should have known existed, but did not include, in the initial objection to the government institution.
The CITT reviews objections on a case-by-case basis and, thus far, has been generally disinclined to consider vague and non-specific objections that leaves the government institution with little understanding of what the complaint is concerned with, as meeting the substantive requirements for objections under the Regulations. The CITT has indicated that objections should:
- Expressly identify what is being challenged in the procurement process
- Provide enough detail so that the government institution can understand what the objection pertains to and address it
- Provide a level of detail that is responsive to the level of detail provided by the government institution. If, for example, the government institution has explained in detail why a bid did not fulfill a specific criterion, a bidder simply stating that it "disagrees" with the determination, without explaining why this is the case, is not useful
- Request relief - what is the desired outcome from the objection? Bid re-evaluation, contract award, and/or retendering of the requirements?
If the government institution response is not satisfactory or the government institution denies the relief requested in the objection, the second time limit begins to run. A bidder has only 10 working days after the day on which it received the government institution response to file a complaint with the CITT.
Stage 2: Filing a Complaint with the CITT
A complaint to the CITT must be made in writing, and comply with the requirements of the Canadian International Trade Tribunal Act. The complaint must contain a clear and detailed statement of the grounds of the complaint; state the form of relief requested; and include all information and documents relevant to the complaint, including supporting documents and communications related to the objection(s). Since the CITT does not usually hold oral hearings, the quality of the written submission to the CITT is paramount.
Beat the Clock - When Do the Time Limits Begin to Run?
Objections
Sometimes the beginning of the 10-day time limit to submit an objection is obvious. For example, if a tender specifies that the winning bid met all the mandatory requirements and had the lowest price, a regret letter from the government institution that provides the name of the winning bidder and the amount of the winning bid has been considered by the CITT to have provided the basis for an objection.
There is a difference between information that assists an unsuccessful bidder to better appreciate the situation, and information that, although not complete, has provided a bidder with enough information that the CITT can conclude the bidder knew or should have been able to reasonably understand that they had a basis to object.
In other situations, the basis of an objection may not be entirely clear and a bidder may require additional information to better understand whether or not they have a basis for an objection. For example, if a regret letter simply identifies that the unsuccessful bid scored lower than the winning bid, but provides no details explaining why the score was lower, it is difficult to know what the grounds of an objection are.
An unsuccessful bidder in such cases will need to seek additional information from the government institution in order to determine whether to submit an objection. However, bidders must remain aware of the fact that they must continue to assess the information as it is provided to determine when there was sufficient information to form the basis for a complaint (even if not all information promised by or expected from the government institution has been provided).
Complaints
The strategic and practical impact of a properly made objection is even more critical if a complaint is made to the CITT. As part of its decision whether or not to conduct an inquiry into a complaint, the CITT will look to see whether an objection was made (or should have been made) and whether or not the government institution responded to the objection.
A critical component of the CITT review at this stage is to determine if the objection and complaint were made within the applicable 10-day time limits - when did the bidder "know or ought to have reasonably known" it had a basis for an objection or a complaint, did the bidder make an objection, was there a real or constructive denial of relief by the government institution, and when did that denial occur?
Keep in mind that even if a debrief is scheduled with the government institution, any information exchanges or interactions between the bidder and the government institution in advance of the debrief can start the time clock.
What is "Actual or Constructive Denial of Relief"?
An actual denial of relief is exactly that - an explicit rejection by the government institution. For example, in response to an objection letter, the government institution identifies that its decision will not change and it has awarded the disputed contract to another bidder. An actual denial of relief can also be provided within a regret letter. The more details that are provided about the evaluation methodology and the more tailored the regret letters are to the particular requirements of the solicitation, the more likely it is to find that the regret letter starts the procurement clock.
In cases where the government institution hasn't expressly provided a denial of relief, the facts of a particular situation may give rise to what can be characterized as constructive denial of relief. Determining what constitutes constructive denial of relief is a case-by-case analysis.
The CITT found a constructive denial of relief occurred, for example, in a case where a bidder submitted a letter of objection but did not receive a response from the government institution after "the passage of a reasonable period of time". The CITT has, in other cases, set a time period for the government to respond to an objection, failing which a constructive denial of relief was deemed to exist (e.g. silence equated to a constructive denial of relief).
A denial of relief does not have to be in writing - a denial can be provided verbally, in person or over the phone. It does not have to be provided officially in a debrief although, if a debrief is provided, the CITT is likely to consider a bidder to be aware of the basis of their complaint at that time.
If there is a clear denial of relief, or if any response by the government institution may be interpreted as a denial of relief, even if accompanied by an assurance that the objection will be further considered, then the 10-day time limit begins to run and a bidder must file a complaint with the CITT to preserve its right to recourse.
Risky Business - Attempting to Extend the Time Limits with Ongoing Communications
Bidders who attempt to extend the limitation periods with on-going meetings and letter writing campaigns, when it is obvious that the basis of a complaint was already known, have not met with a high degree of success at the CITT.
Even if a debrief is scheduled or the government institution continues to discuss the matter, respond to calls or attend meetings, if a denial of relief has occurred, the time limit for filing a complaint will not be extended. Successive reiterations of essentially the same concerns, or submission of additional arguments regarding the same ground of complaint have all determined by the CITT to not extend the time limit.
Summary
Trade agreements provide bidders with an accessible and timely process to manage procurement disputes. However, in order to maintain the efficiency of this process, time limits are short and strictly enforced. Determining when the government institution has rejected a complaint – and the time limit clock for submitting a formal complaint to the CITT starts to run - is not always a straight- forward proposition. Working with a legal team that has knowledge and experience with the entire procurement process, including debriefing preparation, objections and CITT processes and procedures is crucial to preserving the right to recourse after being unsuccessful in a bid.
A special thanks to Novera Khan for her contributions to this bulletin.
[1] The applicable trade agreements for a procurement will be identified in the Tender Notice, usually under the section entitled "Details" or "Description".
