Wednesday, July 6, 2011

Changing Contract terms after public tender

Crosspost from NECI

Can you change the terms of a contract awarded after a Request for Proposals (RFP) process, or should you issue a new RFP to cover the desired changes? Test yourself with this recent Canadian International Trade Tribunal (CITT) case.

On October 18, 2006, Public Works and Government Services Canada (PWGSC) issued an RFP for six “streams” of mobile wireless products and services. Stream 1 was “Wireless Cellular/Personal Communications Service (PCS), Personal Digital Assistants (PDAs), and Aircard products and associated services.” PWGSC intended to select two suppliers for Stream 1. The resulting contracts were to be valid for two years with options to extend the contracts.

The final RFP included the following mandatory requirement: “Stream 1 Financial Proposal: Bidders must submit a completed version of Appendix 1B - Stream 1 Pricing Evaluation Tables.” Specifically, bidders had to provide a monthly flat rate per user for aircard services for 30 MB (megabytes) of data usage, and an additional per-MB rate for each MB used over and above the 30 MB by each user. The proponents included TELUS, Rogers, and Bell Mobility.

On February 26, 2007, PWGSC awarded contracts for Stream 1 to TELUS and Rogers.
Subsequently, after the original contract awards to TELUS and Rogers, PWGSC amended those contracts to include a “Monthly Flat Rate per User for Aircard Services with 1 GB Data Usage” and a “Rate per Megabyte for Aircard Additional Data Usage (over 1 GB).”

On March 7, 2008, PWGSC provided details of the contract amendments to Bell. Within 10 days, Bell made an objection to PWGSC about the contract amendments, saying that they constituted new sole-source procurements. On March 31, 2008, PWGSC advised Bell that its objection was refused, as the amendments were matters of contract administration.

In mid-April, Bell filed its complaints with the CITT. Bell was not contesting the original procurement process. Rather, it alleged that PWGSC improperly amended the two existing contracts to include new services, which had the effect of precluding competition. Bell asked the CITT to recommend that PWGSC award Bell a contract for similar services, and that PWGSC compensate it for lost sales.
Did PWGSC’s actions amount to sole-source procurements, and breach the Agreement on Internal Trade [AIT])?

View answer here

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