Unclear Stage 2 LRT scoring process left City legally vulnerable: lawyers
The SNC-Lavalin headquarters is seen in Montreal on Tuesday, Feb. 12, 2019. THE CANADIAN PRESS/Paul Chiasson
OTTAWA -- A newly-released legal opinion suggests the City's technical evaluation process for Stage 2 of LRT was flawed, which could have put the City at significant legal risk had they nixed a proposal by SNC-Lavalin.
The Montreal-based firm won the $1.6 billion contract to extend the Trillium Line south in Stage 2. The process by which the City arrived at SNC-Lavalin's proposal (under the name TransitNEXT) being the preferred bidder was controversial, and led to several requests from city councillors for more transparency around the procurement process.
SNC-Lavalin failed to meet a required threshold of 70% on its technical evaluation, which should have meant their disqualification, but City staff exercised a discretionary clause in the process that allowed them to let a failed technical bid to advance to the financial scoring phase. SNC-Lavalin won the overall scoring because of its financial score.
The City said, in new documents released Monday, that SNC-Lavalin's submission was the only one of the three proponents under evaluation that met the City's financial threshold for affordability.
The City maintains it followed all the rules when it allowed SNC-Lavalin to move ahead to the financial scoring phase, which ultimately won it the bid.
But, in a legal opinion filed by the firm Norton Rose Fulbright, it appears the City would have left itself open to an expensive lawsuit had SNC-Lavalin failed to advance.
"Assuming that a proponent proved that the scoring methodology was flawed, and that they would have been the highest ranked proponent, there is a strong likelihood a court would award significant damages," Norton Rose Fulbright said.
Lawyers said the evaluation framework was at odds with the Request for Proposal (RFP). The legal opinion describes a "lack of clarity to the grading and scoring chart" in the evaluation framework.
"The suggested scoring grades do not correlate to the actual score ranges proposed for each evaluation category and sub-category. Nor are they expressed in terms of percentages."
The opinion also outlines areas where technical evaluators may make presumptive scoring decisions, which could have put the City at risk.
"The interaction between the scoring grid itself and these presumptive scoring provisions is somewhat unclear. If a court were to scrutinize the process followed in these evaluations, including e.g. where a Proponent was marked down by a Technical Evaluator despite being marked conformant by the Conformance Team, it is unclear whether it would consider the evaluation process fair."
Subjective commentary in the evaluation was also a concern.
Norton Rose Fulbright said if a bid is evaluated on items not specifically outlined in the RFP, or items that are not clearly communicated to proponents, it could be argued the process was unfair.
"For example, an evaluator might comment that a part of a Proposal is poorly written or failed to include a requirement for X items. Where there is no identifiable requirement for a Proponent to provide a specified number of items, the Proposal should not be evaluated and scored negatively as a result," the opinion said. "The risk in such cases is that the evaluator has used a standard or applied a criterion which is not made clear in the RFP documents and has not been clearly disclosed to Proponents."
The bid submitted by SNC-Lavalin to build and maintain the Trillium Line extension was unanimously rejected by the evaluating committee, which claimed it had fatal flaws, and was "generic" and "poorly written."
In several of the documents released Monday, the City stressed, often in bold lettering, that the issues with SNC-Lavalin's technical bid were addressed before they were presented to City Council in March 2019 as the preferred proponent.
Norton Rose Fulbright said, had SNC-Lavalin not advanced, it could have filed for an injunction, which could have put a halt on the bidding process while the City worked to resolve the dispute, or it could have filed for damages.
"There are two different measures which may apply depending upon the circumstances. If the proponent can prove that it would have been the winning bidder, had the evaluation been conduction properly, it will usually be entitled to its lost profits. This is measured as the contract price less the cost of preparing the bid and executing the contract," Norton Rose Fulbright said. "Alternatively, if the proponent cannot show that it would have been awarded the contract, courts will sometimes award the cost of preparing the bid submission."
Construction of the Trillium Line extension is already underway. It's expected to be completed by 2022.