Challenging IT procurement awards

f you ever felt you didn't have enough acronyms to contend with in this industry, here's a new one: CITT. If you've never heard of the Canadian International Trade Tribunal, you are not alone. If you have, but don't know what it has to do with your current IT project, you are still part of a large crowd. In fact, the fate of your project may end up in the hands of the CITT. A disproportionate number of the procurement complaints filed with the CITT concern government IT projects.

The CITT recently issued a significant decision concerning a complaint by Corel about a major software procurement undertaken for Revenue Canada by Public Works and Government Services. The CITT determined that the procurement had been improperly conducted, to the detriment of Corel, and ordered that a new procurement be undertaken, or alternatively that financial compensation be paid to Corel. That decision is currently being appealed to Federal Court by the government.

The transaction involved an eightyear, enterprise-wide license for word processing and office automation software and associated integration, conversion and training services. The contract was awarded to Microsoft.

Corel alleged that the procurement violated the tendering procedures prescribed under the North American Free Trade Agreement (NAFTA), the Agreement on Government Procurement (AGP) and the Agreement on Internal Trade (AIT). The Canadian software vendor maintained that the Request for Proposal (RFP) was biased in favour of the incumbent, and that the procurement was carried out in a discriminatory fashion. In particular, software licensing and integration and training requirements were combined into a single RFP, conversion costs were unfairly imposed on some bidders, a bond requirement was inequitable, and the evaluation and selection methodology was unfair and violated government procurement policies and regulations.

The CITT agreed with Corel. It considered that the procurement documentation did not contain sufficient information to permit the submission of responsive bids and a reasonable time period for bidding was not provided. A new procurement was ordered to be conducted in accordance with the provisions of NAFTA, the AGP and the AIT CITT also recommended that the impact of conversion costs be diminished in evaluating proposals, to provide for effective competition against incumbent contractors.

Accordingly, if a department must make its selection without regard to the costs of switching, who pays those costs? This has major implications for the future tendering of existing IT outsourcing arrangements that can be extremely expensive to unwind if disentanglement is not properly planned. Clearly some new rules have been added to the game. At a minimum it will be necessary to learn the meaning of three more acronyms: NAFTA, AGP and AIT.

A side-effect of NAFTA has been to bring American-style government bid and challenge tactics to Canada. Now unsuccessful bidders are increasingly quick to file a complaint with the CITT, even if it is subsequently withdrawn.

The complaint stage may become a standard appendage to the procurement process, requiring an extension of the planned project timetable. Whatever time you save up front by using. an expedited procurement process may be lost at the back end due to the postponement of the award and a complaint hearing.

Copyright Plesman Publications Ltd. Mar 1999
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