TPG Technology Consulting Ltd. v. Canada

TPG Technology Consulting Ltd. v. Canada
Court (s) Database
Federal Court Decisions
Date
2014-10-02
Neutral citation
2014 FC 933
File numbers
T-494-08
Decision Content
Date: 20141002
Docket: T-494-08
Citation: 2014 FC 933
Ottawa, Ontario, October 2, 2014
PRESENT: The Honourable Mr. Justice Zinn
BETWEEN:
TPG TECHNOLOGY CONSULTING LTD.
Plaintiff
and
HER MAJESTY THE QUEEN
Defendant
JUDGMENT AND REASONS
TABLE OF CONTENTS
Para
I.
Introduction.........................................................................................................
1
II.
The Law Relating to Procurement.......................................................................
6
III.
The RFP...............................................................................................................
8
IV.
Express Terms of Contract A in the RFP for ETS 2...........................................
9
A. Requirements Stated in the RFP.......................................................
9
B. The Work...........................................................................................
11
C. The Resources....................................................................................
12
D. Transition...........................................................................................
17
E. Framework for Compensation............................................................
18
F. Contract Period..................................................................................
21
V.
Other Relevant Events Prior to the Evaluation...................................................
23
VI.
The Evaluation of the Technical Proposals..........................................................
27
VII.
Post-Technical Evaluation...................................................................................
39
VIII.
CITT Complaints.................................................................................................
42
IX.
Transition.............................................................................................................
47
X.
History of this Litigation.....................................................................................
51
A. Motion for Summary Judgment.........................................................
52
B. Consent Order Restricting Claim.......................................................
59
XI.
Witnesses at Trial.................................................................................................
60
XII.
Issues to be Determined......................................................................................
68
XIII.
CITT as a Defence to the Action.........................................................................
69
A. Jurisdiction of the CITT....................................................................
70
B. The Effect of TPG v Canada No 1 FC..............................................
73
C. Framework for Determining Jurisdiction...........................................
76
D. Does the Court Have Jurisdiction?....................................................
78
E. Are There Any Discretionary Bars Against Exercising Jurisdiction?
79
F. Adequate Alternative Remedies........................................................
94
XIV.
Was TPG’s Proposal Fairly Evaluated?...............................................................
110
XV.
Was CGI’s Proposal Non-Compliant?.................................................................
152
A. Reliance on Events Post-Contract Award.........................................
154
B. Compliance with A.24.......................................................................
162
C. Did CGI Submit the Required Number of Resumes?.......................
181
D. Did PWGSC Assist CGI in Recruiting TPG Resources?..................
196
E. The Transition.....................................................................................
199
XVI.
Conclusion...........................................................................................................
213
I. Introduction [1] TPG Technology Consulting Ltd. [TPG] provided information technology services, specifically engineering and technical support [ETS] services to the Information Technology Services Branch [ITSB] of Public Works and Government Services Canada [PWGSC]. It did so from 1999 to 2007 under a contract [ETS 1].
[2] In 2006, PWGSC issued a Request for Proposal [RFP] with respect to the ETS services to be provided to ITSB following the expiration of ETS 1. It specifically stipulated that it represented a “new articulation” of the required services and that those who had previously provided ETS services should not assume that its existing capabilities met the requirements of the RFP:
Bidders who have previously satisfied this requirement or similar requirements, in particular, should note that this solicitation represents a new articulation of the requirement and no Bidders should assume that past practices will continue, except to the extent that they have been expressly articulated in this solicitation, or that the Bidder's existing capabilities meet the requirement simply because they have met previous requirements.
[3] Three companies submitted proposals in response to the RFP: TPG, IBM Canada Ltd. [IBM], and CGI Group Inc. [CGI]. The RFP provided that the bidder who submitted a compliant bid and had the highest combined technical and financial ratings would be the successful bidder [the Contractor] and would be awarded the next contract [ETS 2]. TPG in this action complains only of the assessment of its technical proposal. CGI was successful; TPG and IBM came second and third respectively.
[4] TPG seeks damages from the Crown for an alleged breach of contract arising out of the RFP. TPG alleges that PWGSC breached its duty of fairness in the evaluation of its bid for ETS 2. It also alleges that the winning bid by CGI was non-compliant, that the Crown knew or ought to have known that the bid was non-compliant, and ought to have either disqualified the bid, or terminated the contract upon non-performance by CGI.
[5] The value of the lost contract including the option years was approximately $428 million. TPG claims damages in the amount of $250 million.
II. The Law Relating to Procurement [6] The fundamental principles of procurement law are set out in a series of four decisions of the Supreme Court of Canada: Ontario v Ron Engineering & Construction (Eastern) Ltd, [1981] 1 SCR 111 [Ron Engineering]; M.J.B. Enterprises Ltd v Defence Construction (1951) Ltd, [1999] 1 SCR 619 [M.J.B.]; Martel Building Ltd v Canada, [2000] 2 SCR 860 [Martel Building]; and Double N Earthmovers Ltd v Edmonton (City), [2007] 1 SCR 116 [Double N Earthmovers].
[7] The fundamental legal principles expressed in these authorities that are relevant to this action and upon which this Judgment is rendered, are the following:
1. Where a RFP is issued and a party responds with a proposal, a contract forms between the party issuing the RFP and the party responding to it. This contract (Contract A) is said to “come into being forthwith and without further formality.”
2. The principal term of Contract A is that the proposal of a responding party is irrevocable and the parties have a mutual obligation to enter into a contract (Contract B) upon acceptance of the proposal.
3. The RPF document(s) provide the other express terms of Contract A.
4. Contract A may also contain implied terms.
5. One implied term of Contract A is that only a proposal that is compliant with the terms of the RFP will be accepted. It is no defence to a claim that a non-compliant bid was accepted to say that the acceptance was made in good faith or was based upon what was believed to be the correct interpretation of the contract.
6. Contract A contains an implied obligation to treat all those who respond “fairly and equally.”
7. Contract A contains an implied obligation to assess competing proposals on the same terms and conditions and not to rely on a criterion that has not been disclosed to those who have responded.
8. Other terms may be implied in Contract A based upon the presumed intention of the parties where necessary “to give business efficacy to a contract or as otherwise meeting the ‘officious bystander’ test as a term which the parties would say, if questioned, that they had obviously assumed.”
III. The RFP [8] The RFP was issued by PWGSC on May 5, 2006 and closed on September 5, 2006. Between May 31, 2006 and June 24, 2006, PWGSC responded to 206 questions from bidders. Some questions sought clarification of ambiguous aspects of the RFP. Others described perceived unfairness as a result of the structure of the RFP, or the wording of specific sections. As a result of this question and answer process, 24 solicitation amendments were issued. These amendments were incorporated into the RFP and were binding on both PWSGC and the bidders. Throughout these Reasons reference to passages in the RFP is to the RFP as amended by the solicitation amendments, entered at trial as Exhibit P-6.
IV. Express Terms of Contract A in the RFP for ETS 2 A. Requirements Stated in the RFP [9] Each requirement set out in the RFP was identified to be a mandatory requirement, a rated requirement, or both. The RFP specified: “Proposals must comply with each and every mandatory requirement. If a proposal does not comply with a mandatory requirement, the proposal will be considered non-compliant and be disqualified.” TPG alleges that at least one mandatory requirement was not fulfilled by CGI, to the knowledge of PWGSC, and therefore its proposal ought to have been rejected as non-compliant.
[10] Rated requirements were those which would be assessed “in accordance with the evaluation methodology” described in the RFP. TPG alleges that the evaluators unfairly marked its proposal in 9 of the many rated requirements: Namely, 2.2.3.1, 2.3.1.1, 2.3.1.2, 2.3.1.4, 3.1.4, 3.3.3, 3.3.5, 3.4.2, and 3.6.1, attached as Annex A. At trial, TPG led evidence only with respect to the rating of requirements 3.3.3 and 3.3.5.
B. The Work [11] The Work, as defined in the RFP, was to provide ETS services. The majority of these services were to be provided by the Contractor’s resources directly to ITSB [ITSB Dedicated Services]; however, some services, as in the past, would be provided by resources dedicated to clients of PWGSC such as Transport Canada and the Canadian Intellectual Property Office [Client Dedicated Services]. Article 2 of Part A of the RFP described the Work as follows:
The Contractor shall perform the Work specified in Annex A, Part I, II and III of the Statement of Requirement (SOR), which describes the requirement for the following types of services:
a) Enterprise Server Domain - various engineering and technical support services in support of large mainframe computers;
b) Cross Platform and Network Domain - various engineering and technical support services in support of UNIX and NT Servers; and
c) Support Services Domain - various general support services delivered in the two domains above and to other areas of ITSB, including a Client Dedicated Resource Requirement.
The Contractor will be responsible for Functions work that is comprised of services from specified resources on an on-going basis for the Contract Period, and Project Work that will be implemented on an "as and when requested" basis through Task Authorizations (TAs).
C. The Resources [12] The RFP spoke of the “resources” to be used to provide the ETS services. By this is meant the staff (individuals, employees or contractors) retained by the Contractor to provide the contracted services.
[13] When TPG provided services under ETS 1, it did so using approximately 150 resources, who were subcontractors to TPG. The Statement of Requirements (Annex A, Parts II and III) annexed to the RFP and referenced in Article 2 of Part A of the RFP listed the “staffing requirement” for the ITSB Dedicated Services and Client Dedicated Services. In the initial RFP these totalled 145 staff; however, in the RFP amended by the 24 Solicitation Amendments (Exhibit P-6), it was increased to 159 staff, comprised of 133 providing ITSB Direct Services, and 26 providing Client Dedicated Services.
[14] A substantial component of this litigation focuses on one mandatory requirement, Article A.24 of the RFP, headed “Status of Resources” which reads as follows:
By submitting a proposal, the Bidder is certifying that either:
(i) all the individual resources proposed are employees of the Bidder: or
(ii) in the case of any individual proposed who is not an employee of the Bidder, the Bidder is certifying that it has written permission from such person (or the employer of such person) to propose the services of such person in relation to the work to be performed in fulfillment of this requirement and to submit such person's resume to the Contracting Authority in connection with this solicitation. During the bid evaluation, the Bidder must upon the request of the Contracting Authority provide a copy of such written permission in relation to any or all non-employees proposed. Failure to comply with such a request may lead to disqualification of the Bidder's proposal.
[15] Bidders were not required to name all of the resources that it was proposing to use if its proposal was selected. Annex D-1 to the RPF, the Evaluation Criteria Matrix [ECM], made it a mandatory requirement that a bidder provide information on ten named individuals as example resources:
ITSB recognizes that over the course of its contract with the Contractor, the specific resources that are supplied to deliver services to ITSB will change, as individuals move and progress in their careers. Accordingly, ITSB does not intend to examine and evaluate all individuals that the Bidder proposes to provide to satisfy the initial Function, Client Dedicated, and Task Authorization requirements defined in this RFP. However, ITSB will evaluate ten (10) resources as an example of the resources that the Bidder is able to supply.
[16] The Crown takes the position that the mandatory requirement in A.24 applies only to these ten specifically identified resources. As will be discussed in detail below, TPG interprets A.24 differently and argues that CGI's proposal was not compliant with this requirement.
D. Transition [17] Article B.10.3 of the RFP, the model contract which the Contractor would execute, provided that “the Contractor is required to plan, manage, and execute an effective transition of ETS services from the existing resources to the Contractor’s resources and a management structure provided by the Contractor.” That Article further provided, subject to possible extensions, that the Contractor was to meet with ITSB within five working days after the contract was entered into to review the Transition Plan submitted, to adjust it as necessary, and to submit a finalized Transition Plan within five days following that initial review. The successful bidder was then to “begin to deliver services according to the requirements in this RFP no later than 60 working days following the acceptance of the Transition Plan.” TPG alleges that CGI was also non-compliant with these requirements.
E. Framework for Compensation [18] ETS 1 provided that the services rendered would be compensated on a level of effort basis, i.e. on the basis of a set daily or monthly rate, but it was also understood that the basis of payment could change such that TPG would be paid in terms of deliverables or result.
[19] This latter mode of compensation was described at trial as performance based service delivery or results based service delivery. For consistency, this compensation framework shall be referred to in this Judgment as a results based framework. In a results based framework, one is compensated based on the result achieved, regardless of the time or effort required to achieve that result. It is agreed that the compensation framework of ETS 1 never evolved from level of effort to a results based framework.
[20] Article 4.6.5 of the RFP specified that the successful bidder would be required to transition from a level of effort framework, to a results based framework, soon after being awarded ETS 2.
At the outset of the Contract all services shall be provided by the Contractor on a "level of effort" basis. Where and when deemed applicable by ITSB, the Contractor may establish with ITSB an evolving basis of payment for various services through which the Contractor will be paid in terms of deliverables or results.
This will result in a scalable basis of payment for a given Function or Project such that the actual amount paid, during any period, will be based on the volume of services and/or deliverables provided. It is also anticipated that the Contractor will be provided with a high degree of flexibility with respect to how the services are provided and will only be constrained by the acceptability of the deliverable and service levels. This will provide ITSB with improved results-oriented costing.
ITSB will not undertake any such initiative if the resulting service is more expensive than the provision of the service in accordance with the previous basis of payment or where the initiative will result in increased risk to ITSB. The migration to "Results Based Services" will only take place when a Business Case is approved by ITSB.
Unlike what occurred with ETS 1, the evidence at trial was that the compensation arrangement in ETS 2 did migrate from a level of effort framework to a results based framework. It would appear that this may not have been the success the government hoped for as Dominique Gagnon advised the Court that the RFP for the next contract, which has been or soon will be released, will provide for compensation on the basis of level of effort, as had been done with ETS 1.
F. Contract Period [21] The model contract incorporated as part of the RFP provided that the contract would be effective from the date it issued for an initial period of three years. It also provided that the period could be extended at the option of the Crown by four one-year periods.
[22] The contract the Crown entered into with CGI issued on October 31, 2007, and it was extended for the full extent permitted. It will end on October 31, 2014.
V. Other Relevant Events Prior to the Evaluation [23] In June 2006, prior to submitting its proposal, TPG entered into an agreement with most if not all of its subcontractors on ETS 1 [Authorization to Bid Agreement]. The Authorization to Bid Agreement had two key provisions. First, the subcontractor, either directly or through his or her company, agreed not to “offer services to, or assist in any way, another entity that is competing with TPG” on the RFP. Second, TPG agreed that if it was the successful bidder on the RFP, subject to the approval of PWGSC, it would contract with the subcontractor to provide services under ETS 2.
[24] Initially, the Authorization to Bid Agreement provided that it would end on the first of (i) TPG fulfilling its promise to enter into a subcontract for ETS 2, (ii) December 31, 2007, (iii) four months after the completion of the transition from ETS 1 to ETS 2, and (iv) PWGSC not approving TPG entering into the subcontract for ETS 2. Subsequently, in June 2007, the Authorization to Bid Agreement was amended to provide that the parties’ obligations continued until the latest of the four events, rather then the first of them.
[25] Mr. Powell testified in chief that TPG had two reasons for entering into the Authorization to Bid Agreement: (1) “we knew who we could provide at the time that the contract was awarded, that we would actually have the people to do the work,” and (2) “we believe[d] that no matter how things turned out, we would all be in a stronger position as a team rather than individually.” In cross-examination, he frankly admitted that these agreements also put TPG in a stronger position vis-à-vis others bidding for ETS 2:
Q. Of course. You locked them up so they can't commit to work with CGI during the bid process, right, during the RFP process; that's number one?
A. Right.
Q. You lock them up so they can't commit to CGI during the transition process, which is you, and I have talked about is when CGI is to deliver the names of the resources.
A. Right.
Q. And so that helps you competitively in the bid to win?
A. Absolutely.
Q. But then you lock them up for 4 months after that.
A. So if in fact CGI, as I said, had been even slightly ethical, they would have called me and said, "Let's work out a deal. We haven't got the people." And then Mr. Fleming and everybody else would have been far better off than dealing with CGI directly, so that was a benefit to them, a benefit to me.
[26] In addition to these agreements, TPG also came to an agreement with IBM – one of the other bidders. That agreement permitted both parties to bid some of the other’s subcontractors. This increased the opportunities for both companies to participate to some degree on the new contract should either of them win the bid.
VI. The Evaluation of the Technical Proposals [27] Between September 12 and 27, 2006, PWGSC conducted a technical evaluation of the proposals, facilitated by Mr. Robert Tibbo of Partnering and Procurement Inc. [PPI]. PPI guided the evaluation process. Mr. Tibbo’s role was to ensure fairness in the process. Mr. Tibbo had assisted in developing the RFP itself, working closely with Mark Henderson, Director, Administrative Services and Contract Management, Business Planning and Management Services, ITSB, PWGSC, and Pierre Demers, a manager who reported to Mr. Henderson. Mr. Tibbo also assisted in developing answers to the questions posed by the bidders.
[28] The technical evaluation was conducted by a team of five evaluators: Mr. Bartlett, Mr. Bezanson, Mr. Boudreault, Mr. Swimmings, and Mr. Verma. These evaluators worked within various departments of ITSB and brought diverse experience and expertise to the team.
[29] The evaluation was conducted in two phases: first, the evaluators evaluated the individual bids independently. Then there was a consensus meeting where the individual scores were discussed and discrepancies were resolved by way of discussion among all five evaluators, leading to a single consensus score.
[30] In the individual phase, each evaluator was given an order in which to evaluate the bids that was independent of the others in order to reduce the potential for bias as a result of which bid was evaluated first, second, or last. At the consensus meetings the bids were evaluated in alphabetical order: CGI, IBM, and then TPG.
[31] At the kick-off meeting before the start of the individual evaluations, the entire evaluation process was explained to the evaluators, including the progression from the individual evaluation stage to the consensus stage. The evaluators were instructed to: (1) read the RFP; (2) read a proposal in its entirety; (3) re-read and score that proposal; and (4) repeat steps 2 and 3 for the other two bids.
[32] The evaluators were given binders with scoring sheets to record their score for each of the criterion, and there was a section for the evaluator to provide comments. A description of each and the basis for its evaluation from the RFP itself were listed. For each mandatory criterion, there were boxes that the evaluators were to check off labelled “yes” or “no” to indicate compliance. For a rated criterion, there was a box for the evaluator to record the score, and the range of possible scores was indicated in brackets to the right of the box.
[33] At the kick-off meeting, evaluators were told to keep in mind that during both the individual and consensus sessions, they should consider that a losing bidder would expect a “justifiable reason for the assigned score that any other reasonable person would concur with,” for any instance in which “the proposal did not receive the maximum rated points available.”
[34] Evaluators were also given a code of conduct and instructed not to discuss any of the evaluation process or the results with anyone outside of the team. During the evaluation, the evaluators attended at the MacDonald Cartier Data Centre. The evaluators were seated in the same room with all of their materials during the evaluation process; however, there was no discussion (other than to ask questions at scheduled progress meetings) during the individual phase of the evaluation. None of the evaluators’ materials left the room until the entire evaluation was completed.
[35] During the first three days of the individual evaluation stage (September 13-15), there were meetings where the progress of each evaluator was noted and identified issues were discussed. After September 15, no further issues were identified. Progress meetings continued to be held, but only to monitor the progress of the evaluation.
[36] After all of the evaluators had completed their individual evaluations of each of the bids, the evaluation moved to the consensus phase. At this stage, Mr. Tibbo led the team through each of the bids, criterion by criterion and a single consensus score was reached for each. This score was recorded in a master record which was displayed on a screen for the evaluators to see as the consensus meeting progressed. Where there was no discrepancy between the scores of the individual evaluators, little or no discussion ensued. Where there was a discrepancy, Mr. Tibbo led the evaluators in a discussion of the results and the group arrived at a score on which all of the evaluators agreed. This score was displayed on screen and a paper backup copy was maintained by Mr. Tibbo. In most instances, the individual evaluators also recorded the consensus score in their individual scoring sheets.
[37] During consensus, each bid was evaluated start to finish before moving on to another bid. No bid was explicitly compared to any other bid at any time.
[38] The entire technical evaluation process ended on September 27, 2006. The master copy of the consensus scores was printed out on October 2, 2006 and provided to Mr. Hamid Mohammad, the Contracting Authority for PWGSC.
VII. Post-Technical Evaluation [39] Following the technical evaluation, there was a meeting on October 27, 2006 with Hamid Mohammad and the evaluators to discuss the results of the evaluation and to clarify issues raised by Mr. Mohammad with the substantiation of some of the scores. During this meeting the evaluators provided some comments supporting their scores but at no time were any of the scores changed.
[40] Following the technical evaluation, the financial component of the evaluation was completed on November 9, 2006. No one involved in the technical evaluation was involved in the financial evaluation.
[41] On February 26, 2007, TPG first became aware that CGI was the winning bidder and was to be awarded the contract for ETS 2.
VIII. CITT Complaints [42] Between March 23, 2007, and October 31, 2007, TPG launched four complaints with the Canadian International Trade Tribunal [CITT] alleging: unfairness and reasonable apprehension of bias (complaint 1 filed March 23, 2007), alteration of evaluation methodology after bid closing (complaint 2 filed June 27, 2007), unfair process and reasonable apprehension of bias in the evaluation of the bids (complaint 3 filed August 29, 2007), and failure to conduct the evaluation in accordance with the RFP in relation to reference checks (complaint 4 filed October 5, 2007).
[43] The first complaint was rejected as being time-barred: [2007] CITT No 21, April 3, 2007. The Federal Court of Appeal ultimately allowed TPG’s application for judicial review, but it was determined that TPG’s complaint was premature.
[44] The second complaint was found to be valid: [2007] CITT No 91, November 2, 2007. The CITT found that the evaluation methodology had been changed after bidding closed for seven requirements: 1.3.2.4.11.4, 1.3.2.11.10, 1.3.3.4.11.4, 1.3.3.4.11.10, 1.3.4.2.11.4, 1.3.4.2.11.10, and 3.6.3. It found that the evaluators had allotted scores of 0, 1, or 2 for those seven requirements despite 0 or 2 being the only permissible scores. However, no remedy was recommended because the changed methodology was applied equally to all 3 proposals and because even if one scored TPG’s proposal most favourably and CGI’s proposal least favourably, the ultimate result did not change. The CITT also determined that there was no indication that PWGSC did not correctly follow the appropriate respective rating scheme for any other requirements.
[45] The third complaint was rejected without the tribunal conducting an inquiry: [2007] CITT No 108, September 12, 2007. In its view, the issues raised had already been dealt with in TPG’s first complaint, and there was no reasonable basis for alleging bias or a conflict of interest.
[46] The fourth complaint was rejected on its merits: [2007] CITT No 116, December 20, 2007. The CITT found that PWGSC was required to check the references of all bidders to determine whether the mandatory requirements had been met, but that it was not unreasonable for PWGSC to check the references in the manner it did. There was nothing in the RFP that described how or when the reference check should have been performed, other than requiring that the references be checked before the contract was awarded.
IX. Transition [47] The new contract was officially awarded to CGI on October 31, 2007. Letters informing both IBM and TPG of the contract award were sent on November 5, 2007.
[48] As required by ETS 2, CGI submitted its transition plan dated November 15, 2007. The plan was revised following feedback and the final transition plan was ultimately accepted on November 28, 2007, marking the start of the transition period.
[49] ETS 1, the contract with TPG, ended on December 21, 2007.
[50] ETS 2 provided CGI with 60 working days to complete the transition of all functions, with the option for up to three, 15 calendar day extensions. Two extensions requested by CGI were granted by PWGSC. CGI completed the transition of all functions on March 26, 2008.
X. History of this Litigation [51] In 2008, TPG commenced this action for damages. The claim as then constituted was based on allegations relating to the RFP and the hiring of TPG’s subcontractors by CGI. TPG claimed damages for breach of contract, inducing breach of contract, intentional interference with economic interests, and negligence.
A. Motion for Summary Judgment [52] In March 2010, the Crown filed a motion for summary judgment. Justice Near granted the motion and dismissed the claim in its entirety: TPG Technology Consulting Ltd v Canada, 2011 FC 1054 [TPG v Canada No 1 FC]. That decision was reversed by the Federal Court of Appeal on the basis that the motion judge misapplied the test for summary judgment: TPG Technology Consulting Ltd v Canada, 2013 FCA 183 [TPG v Canada No 1 FCA].
[53] The Federal Court of Appeal was of the view that the motion judge failed to appreciate that the claim for breach of contract was based not only on allegations of bias and inexplicable changes to the evaluations but, in substance, on an allegation that the bids were not fairly evaluated. Contrary to the motion judge’s finding, the Court of Appeal concluded that the evidence adduced “did not squarely answer all questions about the fairness of the evaluation process.”
[54] The motion judge, relying on Double N Earthmovers concluded that events that occurred during the transition could not form the basis of a breach of contract claim by TPG. The Federal Court of Appeal took the view that this finding was based on a misapprehension of the claim of TPG. In its view, the claim of TPG was that the Crown breached the RFP in failing to declare that CGI’s bid was non-compliant because, to the knowledge of the Crown, CGI had failed to accurately certify that the persons to perform ETS 2, were its employees or persons who had consented to being named by CGI. In the opinion of the Federal Court of Appeal, TPG was relying on events that occurred during transition to prove this non-compliance by CGI. It found that the RFP was ambiguous and therefore the “merits of TPG’s proposed interpretation cannot be determined in the absence of a full evidentiary record.”
[55] After it was awarded ETS 2, CGI actively recruited the resources who were then working for TPG on ETS 1. Each had executed an Authorization to Bid Agreement agreeing that they would not work on ETS 2, except for TPG, for sometime following the transition. TPG alleged that the Crown induced these persons to breach this retention agreement and accept employment with CGI. The motion judge, on the basis of Double N Earthmovers, found that once the contract was awarded to CGI, the Crown’s obligations to TPG were discharged and the claim was not sustainable. The Federal Court of Appeal described this as a “relatively weak claim” but found that it involved no additional evidence from the breach of contract claim and thus ought to be permitted to proceed.
[56] Lastly, the motion judge dismissed the claims in tort for inducing breach of contract, unlawful interference with economic interests, and negligence on the basis that there was no evidence to support them. The Federal Court of Appeal found that these “claims appear to be substantially weaker than the claims in contract, but they too are based largely on the same factual allegations … [and there is] no practical reason at this stage not to permit them to continue to trial if TPG is so advised.”
[57] The motion judge made one other important finding that was not the subject of the appeal. He dismissed the submission of the Crown that TPG was precluded from bringing the action on the basis of the doctrine of res judicata, or issue estoppel. The Crown submitted that these doctrines applied because of the four previous CITT complaints filed by TPG against the Crown relating to the RFP. The Crown asserted that these complaints challenged the fairness of the evaluation and awarding of ETS 2 to CGI, the very issues raised in the litigation.
[58] The motion judge stated that although he found some merit to the Crown’s submission, he was “not comfortable granting a summary judgment to the Crown on the basis of issue estoppel without examining the submitted evidence.” He also dismissed the submission that the action was precluded by cause of action estoppel, or res judicata, because:
TPG could not have, and it cannot be said that TPG should have, raised all of the causes of action that constitute the present litigation before the CITT. TPG’s present action is based on breach of contract (for which I would be more likely to accept the res judicata argument) and tort, including the tort of inducing breach of contract, unlawful interference with economic interests, and negligence. The tort claims could not have been raised before the CITT, for the CITT clearly does not have the jurisdiction to deal with them. TPG’s position with respect to the breach of contract claim is much weaker since the obligations of the contract that TPG argues existed between itself and the Crown consist almost entirely of the duty to deal fairly. This issue was essentially before the CITT. However, TPG submits that all of the facts relating to the evaluation of the bids were solely in the possession of the Crown, and were not obtained by TPG until 2008, after the complaints to the CITT. I accept TPG’s submission that in this respect, TPG relies on “fresh” evidence that was not capable of being discovered at an earlier stage.
B. Consent Order Restricting Claim [59] An Order issued on February 19, 2014, by the Case Management Prothonotary, on consent, “in consideration for the trial commencing prior to September, 2014” [Consent Order]. The Consent Order provided that the trial was set down for 25 days beginning on May 12, 2014. TPG agreed to limit the action to its claim that the Crown had breached Contract A. Fresh as Amended pleadings were filed by the parties. The Consent Order reads, in relevant part, as follows:
[T]he following claims have been formally withdrawn by the Plaintiff, with prejudice, and shall form no part of the allegations against the Defendant, notwithstanding any ambiguous language in the pleadings that may be capable of a contrary interpretation:
(i) all allegations of conflict of interest;
(ii) all claims for punitive damages;
(iii) all allegations of negligence;
(iv) all allegations of bad faith, including all claims of misconduct, bias, fraud or unconscionability;
(v) all allegations related to process as it relates to the evaluation of the TPG Technology Consulting Ltd. (“TPG”) bid;
(vi) all allegations that the RFP was drafted, or re-drafted, to favour CGI or prejudice TPG; and
all allegations that the Defendant induced a breach of contract or interfered with the Plaintiff’s economic interests.
XI. Witnesses at Trial [60] TPG called six fact witnesses (Donald Powell, Stan Estabrooks, Brian Fleming, Valerie Bright, David Watts, and Perry Henningsen) and two expert witnesses (Tom McIlwham and Greg McEvoy). Following a voir dire, the court made the following ruling regarding the scope of evidence and qualifications of Mr. McIlwham:
I am satisfied, based on the evidence adduced in the voir dire, that Mr. McIlwham through experience in the implementation, delivery and management of IT services for roughly 40 years has gained specialized knowledge and the court qualifies him as an expert in performance metrics and Service-Level measures for IT services, and as such, he may provide opinion evidence on the following: One, what "performance metrics" and "Service Level measurements" are understood to be in the IT industry; two, the application of performance metrics and Service-Level measurements to Service-Level contracts; and three, whether the performance metrics and Service-Level measurements proposed by the Plaintiff were relevant and could reasonably be expected to be used by ITSB in the Service-Level contractual framework.
[61] The Crown called 10 fact witnesses (Mark Henderson, Robert Tibbo, Don Bartlett, Vikas Verma, Jim Bezanson, Louis Boudreault, Paul Swimmings, Michele Charette, Dominique Gagnon, and Luc Boileau) and one expert witness, Dave Clarke.
[62] Both Mr. McEvoy and Mr. Clarke are chartered accountants and chartered business valuators and were both qualified as experts in business valuation and damages quantification.
[63] There were occasions when a witness was argumentative or evasive; however, all of the witnesses, except Luc Boileau, were found to be generally credible. Mr. Boileau’s credibility was damaged when he repudiated some, but not all of the express words written by him in his notebook with the explanation that notwithstanding what he wrote, it was merely an aide memoire to say the exact opposite of what he had written:
As I said, this is to remind me, right? I'm very busy. I write stuff without thinking. As long as I have a word or two that reminds me what I should say, then I talk about it, but don't take my notes as being black and white.
I do not accept that explanation. It flies in the face of common sense and logic that one would write entries that express exactly what one intends and others that express exactly the opposite of what one intends - all in the same record and made on the same day.
[64] The five evaluators each testified and did their best to recall the events and discussions that occurred some eight years before. Each appeared proud of the work he did in the evaluation process and accordingly, on occasion, bristled when it was suggested that he had failed in that task. Such a response is not unexpected. Similarly, it was not unexpected when Mr. Powell, who has spent a considerable amount of time and money in this litigation, occasionally offered a strong opinion on the deficiencies of the process.
[65] The consensus sessions which formed a great part of