Nova Scotia

Cape Breton company's 'bid shopping' complaint deemed valid

Trade tribunal finds prejudice in the tendering process, but no evidence federal department acted in bad faith.

Joe Parsons Construction Ltd. lost out standing offer due to unfair competition

A Cape Breton company was given a standing offer for construction work at former mining sites on the island. The bid was later terminated and a tender reissued, after prices were published. (Jeff Stapleton/CBC)

A Cape Breton company missed its chance at a multi-year contract with the federal government due to a flawed bidding process, says the Canadian International Trade Tribunal.

Joe Parsons Construction Ltd. launched a complaint last December against Public Works and Government Services Canada, saying the department had engaged in "bid shopping," the practice of divulging an offer to other prospective bidders before the awarding of a contract, in order to secure a lower bid.

The Reserve Mines company said Ottawa reissued a tender for heavy-equipment work after the contractor had already received a standing offer, and award notices — including prices — were posted on a federal website.

'Seriously compromised'

The tribunal found the company was prejudiced by the disclosure and deemed its complaint to be valid, but found no evidence that the federal department acted in bad faith.

"The integrity of the particular process was seriously compromised," wrote Randolph W. Heggart, presiding member of the tribunal, in his decision. 

"As a result of these circumstances, it was possible for bidders to correct errors in their original bids and undercut the total evaluated prices of winning bids (in the original tender)."

The original tender was issued last September for remediation work in Cape Breton. The proposal involved hydro-seeding and landscaping for several former mine sites. 

Award notice posted online

Joe Parsons Construction was told on Oct. 14, 2020, that it was one of three bidders to receive standing offers for the project. 

About 24 hours later, the department published a contract award notice on Ottawa's procurement website, Buyandsell.gc.ca.

But less than two weeks later, successful bidders were told the tender was being reissued due to an ambiguity in its pricing language. 

A new solicitation notice was added on Nov. 4. Joe Parsons Construction reapplied to the reissued tender, but was outbid.

Pricing 'compromised' 

Joe Parsons, who heads the namesake company, said secondary bidders had an unfair advantage. 

"Doing this second tender without making any changes to the tender quantities compromised pricing for this second tender," Parsons wrote in a letter to the federal department last fall. 

"Known bids from the first tender that were made public can be easily figured out."

The tribunal found Parsons Construction was denied an opportunity to fairly compete for one of the standing offers that could have resulted in up to five years of work, for a portion of the total revenues that would likely have been in the range of $1.5 million. 

In the tribunal's decision, Heggart said one bidder who was not a part of the original tender went so far as to submit an offer that underbid all others.

Department urged to re-evaluate bids

Public Works and Government Services Canada said there was no prejudice toward Joe Parsons Construction. The department argued it had disclosed the total evaluated price, including adjustments to the extended pricing, but not its actual bid price.

A spokesperson for the department said it is reviewing the tribunal's decision and will "determine what actions are necessary and respond appropriately."

In its ruling, the tribunal urged the department to re-evaluate bids submitted as part of the first tendering progress. It also suggested cancelling all standing offers in relation to the second tender, pending a review. 

The tribunal also said compensation should be made for lost profit, but did not award costs as Joe Parsons Construction had not requested any.

When reached by CBC News, Parsons said he didn't know if he was able to talk about the matter. 

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