I have written here previously about problems of risk aversion in a process driven public procurement culture which I think is a real problem. With that in mind, Jon expressed his concern about the decision in Envoy Relocation Services Inc. v. Canada (Attorney General), 2013 ONSC 2034 commenting that:
“In fact if anything, I am more adamant relative to my earlier stated belief, based on the fact that rather than serving justice, the […] ruling will actually further entrench the belt with suspenders risk averse mindset that has both dominated and limited public sector procurement effectiveness”.
I disagree with respect to this case. I think that on any reading the decision of Justice Peter Annis discloses what NATO forces would recognise immediately as a Charlie Foxtrot scenario.
The judgement, which runs to 1808 paragraphs, goes so far at one point as to describe the tendering provisions put in place by the Crown as “a scam” (para. 1312). There are further findings relating to a terminated tender process in 2002 of the same tenor. Annis J, who is now a Justice with the Federal Court of Canada, was also clearly aggrieved (para 13) that the Crown had “had misled the [Office of the Auditor General] and the court”.
On the basis of his findings in fact it is clear that Annis J was not only entitled to overturn the contract award decision but it would have been much more surprising had he not overturned it.
The findings in fact make grim reading for any procurement professional. Taking them at face value (they may yet be appealed I understand) they are that the incumbent’s bid should have been rejected as non-compliant; that both the incumbent and the Crown had significant conflicts of interest; that weightings in the evaluation criteria were biased towards the incumbent and, worse (para 1194) “constitute bad faith”; that the Crown failed to follow its own procedures and that the Crown ignored the incumbent’s intention to breach its obligations. Annis J expresses his concerns quite clearly in paras. 1749 and 1750:
- the disregard for the transferees’ interests in permitting them to be charged […];
- the riding roughshod over legitimate concerns of the tendering parties and refusing to provide responses and correct or helpful answers to their questions;
- the attitude conveyed to the Court that there were sufficient checks and balances in the system to prevent improprieties, or that the Deputy Minister erred in deciding to retender the process;
- the willingness of Crown witnesses, to come to court concealing documents, not to mention being untruthful on critical elements of the case
- the blatant denial and concealment of conflicts of interest;
- the intentional failure to document decisions that injured the plaintiffs;
- misleading the Office of the Auditor General; and
- the too close relationship with RLRS and the failure to recognize the Crown’s favouritism towards RLRS and its impact on the relocation industry in Canada.
[1750] I am satisfied that this conduct can be characterized as high-handed, arbitrary or highly reprehensible misconduct, and although without malice, departing to a marked degree from ordinary standards of decent behaviour in respect of procurement practices.
Addressing these issues is not a matter of entrenching risk aversion, it is to fix deep seated irregularities in the conduct of the procurement itself.
Click image above to read original Atyeo post . . .
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Procurement Insights 
piblogger
November 13, 2013
For the sake of convenience, here is a copy of my comment relating to my original post and the corresponding discussion stream regarding the Atyeo case:
To start Ian thank you for providing such an obviously intelligent and well researched comment relating to this controversial case.
You raise excellent points – I am very much looking forward your expanded commentary that will be published as a post in this blog today.
As indicated in this post, “while one might be tempted to question Justice Annis’ ruling, and Atyeo’s seemingly sanctimonious denouncement of the procurement process, the truth is that neither man had any choice but to do what they did based on the government’s flawed belief that everyone deserves a shot at government business.” Emphasis of course on “neither man had any choice but to do what they did.”
My problem is not with Justice Annis’ ruling but with the government’s approach to managing complex relationships including the associated tendering process. I believe, and similar to the case referenced in a recent post titled “Values under pressure: Is there a way to keep your job without compromising your values?” (http://wp.me/p1XSrf-nX) in which performance targets inadvertently drove unintended behaviors, the Envoy case speaks to the larger issue of how the government does business.
I question for example the need to arbitrarily re-tender contracts in which the incumbent supplier is delivering to expectations. Instead of having to go through the time consuming, expensive and illusionary process of having to issue a new RFP in a quest to get the best deal and keep everyone honest, perhaps a better way would have been to establish objective and adjustable metrics within the framework of a Relationship Charter such as the one proposed in Andy Akrouche’s book “Relationships First: The New Relationship Paradigm In Contracting.” (http://www.lulu.com/shop/andy-akrouche/relationships-first-the-new-relationship-paradigm-in-contracting/ebook/product-21285780.html?ppn=1)
Given the consensus by numerous industry experts that 90% of all contract winners are determined before the RFP is issued (http://www.youtube.com/watch?v=IMIlGJWVL38&feature=share&list=TLFrEMZlRFnCDBBlxyIcX0yfmDS3xzvK5c), and the growing cynicism that has led to articles such as the one by Michael W. McLaughlin (Why You Should Ignore RFPs; http://mindshareconsulting.com/why-you-should-ignore-rfps/), it is clear that the present system is seriously flawed.
While the Atyeo case shines a needed light on this problem, my fear is that rather than stimulate the necessary change in the process, Justice Annis’ finding will only add additional layers of process to a bureaucracy that is already weighted down with arbitrary and largely unnecessary regulation.
Tom Truman
November 14, 2013
For a government procurement person like myself a really interesting discussion. It is difficult to judge the facts from a distance, but your discussion clearly demonstrates that in government procurement we must expect to be challenged and need to have all the ducks in a row to survive those challenges. I don’t think this is risk aversion, but risk management, although I agree in many government areas, the former rules rather than the latter, particularly when the political impinges too greatly on the administration. This was not a political decision though (over which we have little control) but a legal one, which we can control by having good processes and sticking to them. In government the challenge is to have a robust, transparent process without making it unwieldy. I have had to debrief very upset unsuccessful bidders, but generally they come around if you are willing to front up and listen, and can demonstrate good process and transparency (to the limits of probity).
piblogger
November 14, 2013
The 300 pound gorilla (or elephant if you prefer) in the room, is that there is nothing that I have seen that would indicate that Envoy would have been the best choice for the government.
In the end this is what should be the deciding factor.