Canada Revenue Agency Fights to Retain Lionbridge Subsidiary as Vendor

Language service procurement in government continues to be a prickly issue. First a number of language service providers (LSPs) filed cases in market court over the way Finland’s central procurement agency handled an interpretation tender. And then a similar thing happened half a world away when a Maryland-based LSP filed a complaint over the way a US government procurement agency ran the tender for the supply of linguists to the Air Force. Now, it’s Canada’s turn.

The Canada Revenue Agency (CRA) uses the services of an LSP to, each year, translate close to 18 million words on average. Until recently, that LSP was the Marsha Krupp Translation Group, the tax agency’s contractor since 2004. (The CRA runs its own tenders and does not rely on Canada’s Translation Bureau, which handles 80% of the federal government’s translation volume.)

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According to a report in the Ottawa Citizen, the CRA accounted for close to CAD 4m, roughly more than 25% of Marsha Krupp’s yearly revenues.

No surprise, therefore, that when the CRA chose another LSP in late 2016, Marsha Krupp kicked up a storm by filing a protest before the Canadian International Trade Tribunal, the country’s quasi-judicial arbiter for government procurement issues and other matters.

Replacing Marsha Krupp was CLS Lexi-tech, formed after CLS Communication acquired Canadian LSP Lexi-tech International in 2009. CLS Communication was subsequently acquired by Lionbridge in 2015.

In October 2016, the CRA announced it had awarded CLS Lexi-tech with the CAD 8.6m contract for translation and editing services to be carried out over two years, plus five extensions of one year each — a contract valued at CAD 35m (USD 25.6m) over seven years, according to case documents.

Marsha Krupp earned CAD 7.2m during the last two years of its CRA contract, according to the Ottawa Citizen article, which said the company could have had an advantage over CLS Lexi-tech on price. According to the original tender documents, however, the winning bidder would be selected based on technical merit (50%) and price (50%).

In its complaint to the Canadian International Trade Tribunal, Marsha Krupp chose to home in on the technical merit criteria, saying the CRA had used an evaluation inconsistent with the RFP and had introduced “an unfair element of subjectivity” in awarding the contract to a non-compliant bidder.

Unsubstantiated

Marsha Krupp claimed “it was obvious and common knowledge in the translation industry that CLS Lexi-tech could not have met the mandatory requirements of having 25 qualified in-house translators to complete the CRA’s translation work” in its complaint to the Tribunal. To support the claim, Marsha Krupp said that within three hours of being advised that it had won the contract, CLS Lexi-tech “e-mailed” one of Marsha Krupp’s senior translators trying to get her to leave her employment.

The Trade Tribunal called this claim of Marsha Krupp’s unsubstantiated. On the contrary, “CLS supplied detailed and compelling information” that it could deliver on the RFP, the Tribunal said. It also found no connection between CLS contacting a Marsha Krupp employee (i.e., through LinkedIn with neither a résumé request nor project specifics) and a violation of trade agreements.

Claim Retracted

Marsha Krupp also noted how it was “highly unusual” that all three of its references could not confirm they had been contacted by the CRA, a requirement of the RFP. But the CRA produced an e-mail trail for the reference checks as well as e-mail messages from Marsha Krupp’s three references confirming that, “upon reflection,” they were indeed contacted.

Marsha Krupp retracted this claim and described the inability of their references to initially confirm they were, in fact, contacted by the CRA as merely “coincidental”; and the Tribunal ruled this claim invalid.

Half a Point

In the third part of its complaint, Marsha Krupp was finally able to latch onto a detail that resulted in a more favorable ruling.

Marsha Krupp claimed the CRA was subjective in its evaluation process and “bidders were not treated equally.” The Tribunal agreed with this claim, pointing to the so-called evaluation grids that showed CLS Lexi-tech being awarded half points, while Marsha Krupp was not.

The CRA, explained the Tribunal, had “altered the integrity of the exercise by prompting half-point answers when conducting reference checks when the option to award half points was clearly not provided for by the RFP.”

The Tribunal, therefore, said the CRA’s actions had “compromised the evaluation beyond repair” and found this part of Marsha Krupp’s complaint valid.

Solomonic Decision

As a remedy, Marsha Krupp requested the Tribunal to ask the CRA to do any of the following: award Marsha Krupp the contract, compensate the company for lost profits, re-evaluate the bids, or re-tender the contract.

On April 21, 2017, the Tribunal published its recommendation: That the CRA re-open the RFP and set a date for re-tendering by April 24; but that the current contract stay with CLS Lexi-tech until a new contract is awarded.

The Tribunal further recommended that Marsha Krupp and another bidder be compensated for lost profits.

Dissatisfied with the ruling, the CRA fired back by elevating the case to the Federal Court of Appeals, accusing the Tribunal of overstepping its jurisdiction. The appeal has locked things in a holding pattern as the court deliberates the issue.

Marion Marking

Communications specialist, veteran journalist, and online editor at Slator who dreams of driving a Veyron on the Autobahn