In-Service Support of the LM2500 Gas Turbine Engines on Canada’s Halifax Class Frigates

Attestation of assurance

The fairness monitor (FM) hereby provides the following unqualified assurance statement concerning the competitive procurement process for the contract for In-Service Support (ISS) of the LM2500 Gas Turbine Engines on Canada’s Halifax Class Frigates.

It is our professional opinion that the competitive procurement process we observed or monitored was carried out in a fair, open and transparent manner.

Project requirement

RFP Solutions Inc. was engaged on November 4, 2015, as a FM to observe all stages of the competitive procurement processes associated with the In-Service Support (ISS) of the LM2500 Gas Turbine (GT) Engines on Canada’s Halifax Class Frigates, issued by Public Works and Government Services Canada (PWGSC) on behalf of the Department of National Defence (DND) under solicitation number W8482-183029. RFP Solutions Inc. is an independent third party with respect to this activity.

This report covers the activities of the FM in respect of all phases of the competitive procurement process from the preparation of the request for responses and evaluation (RFRE) starting on November 4, 2015, to the conclusion of the bid evaluation on June 11, 2021.

DND requires an ISS provider to maintain the 2 GT engine propulsion systems on board each of Canada's 12 Halifax class frigates for the remaining life of the frigates.

The contract will provide the services to support operational availability of the Halifax class frigates.

For domestic and continental operations, the frigates:

• monitor and control Canadian water and airspace
• facilitate large-scale search and rescue activities
• conduct sovereignty assertion
• provide emergency assistance

For international operations, they operate with and integrate into United Nations and North Atlantic Treaty Organization sponsored operations as well as support coalitions of like-minded states to maintain of international peace and security.

The ISS will encompass provision of field service on both coasts of Canada to support the maintenance of each GT on each frigate, the maintenance of spares, maintenance of training devices, training and warehousing of both DND-owned and contractor-owned spares.

The anticipated contract duration is 20 years, the expected remaining lifecycle of the vessels.

The FM’s services encompass all phases of the procurement process. An RFRE was issued via buyandsell.gc.ca under solicitation number W8482-183029/A. It closed on December 7, 2018. Qualified suppliers were invited to participate in the bid solicitation that encompassed a review and refine requirements (RRR) process, including a review of a draft request for proposal (RFP), and the subsequent RFP (solicitation number W8482-183029/B) process. The RRR, draft RFP and RFP were issued directly to qualified suppliers rather than via buyandsell.gc.ca.

We reviewed all the information provided and observed all relevant activities.

This report includes:

• our attestation of assurance
• a summary of the scope and objectives of our assignment
• relevant observations from the activities undertaken

Fairness monitoring engagement and observations

In accordance with the terms of our engagement, we familiarized ourselves with the relevant documents, reviewed the RFRE, RRR and RFP documents prior to release, observed the RFRE, RRR and RFP activities and the post solicitation period, including the evaluation of bids, identified fairness-related matters to the contracting authority, and verified that responses and actions were reasonable and appropriate.

Specific activities and observations of the FM in respect of those activities are summarized in the remainder of this section.

In this section

• Procurement planning and pre-issue stage
• Request for responses and evaluation posting
• Request for responses and evaluation close
• Request for responses and evaluation: Evaluation of supplier capabilities and experience
• Draft request for proposals issued
• Request for proposals phase
• Evaluation orientation
• Technical evaluation
• Price evaluation, verification and bidder selection
• Communications and debriefing

Procurement planning and pre-issue stage

The FM contractor was engaged to begin fairness monitoring activities prior to the development of the RFRE. A review of the drafts and final RFRE was conducted. This included a review of the RFRE for the ISS of the LM2500 GT Engines on Canada’s Halifax Class Frigates.

The FM provided assurance as to the impartiality of the requirements, the objectivity of evaluation criteria and process; and the clarity of the documentation to support understandability by proponents in preparing their bids, as well as to mitigate the potential for inconsistency or errors in the eventual application of evaluation criteria by the evaluation committee.

Observations

In reviewing the draft and final RFRE documentation, the FM did not observe any fairness issues.

Request for responses and evaluation posting

The RFRE (dated November 8, 2018) was issued to potential bidders via buyandsell.gc.ca on November 9, 2018; the final closing date was on December 7, 2018, at 2:00 pm Eastern standard time.

There were no revisions to the terms and conditions of the RFRE and no questions were submitted with respect to the RFRE.

Observations

In observing the RFRE posting period, the FM did not observe any fairness issues.

Request for responses and evaluation close

The FM reviewed the way the responses to the RFRE were received and handled with the contracting authority.

At close, 4 responses were received in accordance with the deadline stated in the RFRE.

Observation

In reviewing the receipt and handling of the RFRE responses, the FM did not observe any fairness issues.

Request for responses and evaluation: Evaluation of supplier capabilities and experience

The RFRE closed on December 7, 2018, at 2:00 pm Eastern standard time.

Following RFRE closing, clarification was requested from 1 respondent.

The Evaluation Committee met on December 20, 2018, to review the responses and deemed that all 4 respondents met the mandatory requirements and would be permitted to participate in the RRR and RFP stages. The FM reviewed the evaluation results against the submission criteria and concurred with the results.

All 4 suppliers were deemed to be qualified to participate in the RRR and RFP processes.

Observation

In reviewing the results of the evaluation of suppliers’ capabilities and experience, the FM did not observe any fairness issues.

Draft request for proposals issued

The RRR phase commenced with the issuance of the draft RFP and industrial and technological benefits/value proposition (ITB/VP) requirements directly to the 4 qualified suppliers via e-mail on January 21, 2019. The RRR process, which was voluntary, provided the 4 prequalified suppliers with the opportunity to provide written feedback and pose questions with respect to the draft RFP and ITB/VP requirements. The FM reviewed the draft RFP before it was issued to the qualified suppliers.

Between January 21, 2019, and June 19, 2020, 3 sets of one-on-one supplier consultations were conducted; not all qualified suppliers chose to participate.

Three qualified suppliers participated in one-on-one consultations on October 8 and 9, 2019, to provide comments on the initial performance work statement (PWS), the initial performance management specification and the related basis of payment elements and the draft economic leveraging. The FM observed each of the 3 consultations.

Three qualified suppliers participated in one-on-one consultations on January 15, 16 and 20, 2020, for PWGSC and DND to describe high-level changes to an updated draft of the RFP and to receive supplier comments on the draft RFP. The FM observed each of the 3 consultations.

Three qualified suppliers participated in one-on-one consultations on February 5 and 19, 2020, to provide comments on an updated draft of the RFP, specifically the:

• cost/price
• limitation of liability
• ITB/VP requirements
• intellectual property
• bid evaluation
• PWS
• basis of payment

The FM reviewed the draft RFP before it was issued and observed each of the 3 consultations.

An updated RFP was issued on June 19, 2020, to all qualified suppliers; the FM reviewed the draft before it was issued.

Another series of one-on-one consultations was conducted with the qualified suppliers to receive comments on specific portions of this version of the draft RFP.

On July 9 and 11, 2020, one-on-one consultations were conducted with 3 qualified suppliers to discuss any specific questions the qualified suppliers had regarding the updated RFP documents.

On August 9 and 11, 2020, one-on-one consultations were conducted with 4 qualified suppliers to discuss the ISS elements of the draft RFP.

On September 9 and 10, 2020, one-on-one consultations were conducted with 3 qualified suppliers to discuss the coastal operations elements of the draft RFP.

On September 16 and 17, 2020, one-on-one consultations were conducted with 3 qualified suppliers to discuss the materiel management elements of the draft RFP. The FM observed each of the consultations.

Throughout the draft RFP phase, there were informal e-mail communications between the suppliers, PWGSC and DND. The suppliers copied the FM on their e-mail communications to PWGSC and DND.

The FM reviewed all e-mail communications from PWGSC and DND before it was issued to the suppliers and copied on those e-mails.

The RRR and draft RFP phase concluded when the final RFP was issued on March 17, 2021.

Observation

In reviewing the communications between PWGSC, DND and the suppliers, including the draft versions of the RFP, the FM commented on potential fairness concerns that were addressed before the communication was issued to the suppliers. In participating in the one-on-one consultation sessions with suppliers, the FM did not observe any fairness issues.

Request for proposals phase

The RFP phase commenced with the issuance of the RFP (W8482-183029/B) directly to suppliers via e-mail on March 17, 2021, with an initial closing date of May 5, 2021. The final RFP did not include the ITB/VP requirements that were included in the draft RFPs. The FM reviewed the RFP prior to its distribution to the qualified suppliers.

One amendment was issued on May 3, 2021, to extend the RFP closing date to May 26, 2021; no other amendments to the terms and conditions were issued.

During the RFP phase, 12 responses to supplier questions were provided. As with the RFP, the amendment and responses to the questions were provided directly to suppliers via e-mail. The FM reviewed the amendment and responses to the questions prior to their distribution to the qualified suppliers.

When the RFP closed on May 26, 2021, 2 bids were received. The bids were received by PWGSC’s Bid Receiving Unit by epost and the FM confirmed receipt of the bids in accordance with the requirements set out in the RFP with the contracting authority.

Observation

In reviewing the RFP, the amendment, the response to supplier questions and the way in which the bids were received, the FM did not observe any fairness issues.

Evaluation orientation

Prior to bid closing, the contracting and project authorities conducted 2 orientation sessions with the bid evaluation team.

The first session on May 19, 2021, was to review the RFP requirements.

The second session on May 20, 2021, was to review the evaluation guidelines, including the:

• evaluator responsibilities
• code of conduct
• security
• confidentiality and conflict of interest requirements
• evaluation methodology

The FM was present at both orientation sessions and provided assurance as to the impartiality of the evaluation methodology.

Observations

In reviewing the evaluation methodology, the FM did not observe any fairness concerns.

Technical evaluation

Prior to the technical evaluation, the contracting authority reviewed the bids for completeness and anonymized; the bidders were known to the evaluators as bidder A and bidder B.

Copies of both bids were distributed via epost to each member of the evaluation committee on May 31, 2021. The evaluation committee was comprised of 3 teams of evaluators with each team assigned specific criteria to evaluate. The rated requirements were then reviewed individually by each member of the Evaluation Committee. The evaluators subsequently met via Microsoft Teams on June 7 and 8, 2021, to conduct a consensus evaluation.

The FM was present to observe each of the consensus evaluation sessions.

Observation

In observing the consensus evaluation and reviewing the results of the technical evaluation, the FM did not identify any fairness issues.

Price evaluation, verification and bidder selection

In accordance with the RFP, the pricing envelopes for both bids were opened, and the contracting authority determined the price points for each bidder. The FM reviewed the price bids and price ratings with the contracting authority.

The selection of the successful bidder was based on the proposal with the highest total score (total score = technical points + price points).

The contracting authority verified the total scores for the 2 bids and reviewed the results with the FM.

Observation

In reviewing the results of the price evaluation, verification and bidder selection, the FM did not observe any fairness concerns.

Communications and debriefing

This section will be completed as an addendum to this report following completion of contract award, which is subject to Treasury Board of Canada Secretariat (TBS) approval and confirmation of security and integrity provisions and, as requested, debriefing of bidders.

Reference documents

Documents related to solicitation number W8482-183029/A (RFRE) are available on CanadaBuys or through the project office. Documents related to the RRR, draft RFPs and the final RFP (solicitation number W8482-183029/B) are available through the project office.

Addendum to final report

August 31, 2021

This addendum covers the period following the conclusion of the evaluation phase including contract award and debriefings.

Following the identification of the highest ranked bidder, the contracting authority conducted a confirmation of the security and integrity provisions of the RFP. The FM confirmed the results. Prior to award, PWGSC was required to notify the TBS of the successful bidder and contract value. This was done on June 20, 2021. The successful and unsuccessful bidders were officially notified of the results via e-mail on July 5, 2021. The notification to each bidder included their scoring and the FM reviewed the notifications before they were issued. The contract was formally awarded on July 22, 2021, and a contract award notice was published on buyandsell.gc.ca on August 4, 2021.

Both bidders were informed that that they were entitled to a debrief and to receive additional feedback on the scoring of their bids. The unsuccessful bidder requested additional feedback on where it had lost points in the evaluation. The contracting authority provided written feedback on August 4, 2021. The FM reviewed the feedback before it was sent to the bidder.

Attestation of Assurance

The FM hereby provides the following unqualified assurance statement concerning the contract for ISS of the LM2500 GT Engines on Canada’s Halifax Class Frigates RFP, contract award and debriefing processes.

It is our professional opinion that the RFP, contract award and debriefing processes we observed or monitored were carried out in a fair, open and transparent manner.