Atomic energy of Canada limited nuclear laboratories restructuring project

Table of contents

• 1. Introduction
  • 1.1 Background
• 2. Attestation of assurance
• 3. Methodology
• 4. Request for expression of interest phase
• 5. Request for information phase
• 6. Request for response evaluation phase
• 7. Request for proposal phase
• 8. Proposal evaluation phase
• 9. Reference documents

1. Introduction

PPI Consulting Limited was engaged by Public Works Government Services Canada (PWGSC) as a Fairness Monitor (FM) to observe the Atomic Energy of Canada Limited’s (AECL) Laboratories Nuclear Laboratories Restructuring Project (NLRP) procurement process. PPI Consulting Limited was engaged in March 2012, following the issuance of the Request for Expression of Interest (RFEOI), issued by Public Works Government Services Canada. We were not involved in the prior document development.

We hereby submit our Final Report covering the activities and monitored observations of the Fairness Monitor for AECL’s NLRP solicitation process (solicitation # 23240-120758/A through /H).

PPI Consulting Limited is an independent third party with respect to this activity. We reviewed all of the information provided and observed all relevant activities as described below and in accordance with our mandate.

This report includes our attestation of assurance, a summary of the scope and objectives of our assignment, the methodologies applied and relevant observations from the activities undertaken.

1.1 Background

On February 28, 2013, the Minister of Natural Resources Canada (NRCan) announced that Canada would undertake a competitive procurement for a Contractor to manage the operations of AECL’s Nuclear Laboratories using a Government‐owned, Contractor-operated (GoCo) model. Similar models are used in the management of nuclear operations in other jurisdictions, such as the United States and the United Kingdom.

The purpose of the procurement process was to obtain the services of a Contractor to manage a Site Operating Company (SOC) that will be responsible for managing and operating AECL’s Nuclear Laboratories. The SOC will perform most of the functions and operations that AECL currently performs, and it will become the employer of the majority of the employees of AECL. It is anticipated that the SOC will hold all necessary licences, permits and other regulatory approvals required to operate AECL’s properties and assets, and will have the right to use those properties and assets in the fulfilment of its responsibilities.

The Contractor is expected to significantly transform AECL’s Nuclear Laboratories to ensure that the SOC leverages the capabilities and resources to successfully deliver nuclear science and technology related products and services to government and third‐party customers, and fulfill decommissioning and waste management needs, while containing and reducing costs and financial risks for Canadian taxpayers over time.

2. Attestation of assurance

It is our professional opinion that the solicitation for Atomic Energy of Canada Limited’s (AECL) Nuclear Laboratories Restructuring Project (NLRP) procurement process that we observed, was carried out in a fair, open and transparent manner.

3. Methodology

PPI Consulting Limited was engaged as a Fairness Monitor (FM) to observe the process for AECL’s NLRP procurement and to attest to the fairness, openness and transparency of this monitored activity.

The procurement process was initiated when the RFEOI was released on MERX (solicitation 23240-120758/A) on February 8, 2012. PPI was engaged in March 2012, during the response period for the RFEOI. In accordance with the terms of our engagement, we familiarized ourselves with the relevant documents, observed activities from the RFEOI phase, through the RFI Phase (solicitation 23240-120758/D) and RFRE Phase (solicitation 23240-120758/F), to the completion of the RFP Proposal Evaluation Phase (solicitation 23240-120758/H) on May 15, 2015, identified fairness-related matters to the Contracting Authority and to the NRCan/AECL project team and ensured that responses and actions were reasonable and appropriate.

4. Request for expression of interest phase

The request for expression of interest (RFEOI) Phase began when the RFEOI, solicitation number 23240-120758/A, was issued on MERX on February 8, 2012 with a closing date of April 2, 2012.

The primary objectives of the RFEOI were to enable an exchange of information, provide insight to Natural Resources Canada (NRCan) and the governance of Canada to better inform the restructuring of the AECL nuclear laboratories. It provided further insight into the market capabilities and solutions from market, interest in potential future investment and management of Canada’s nuclear laboratories, interest in science and technology activities; and identified market needs to enable participation in any future procurement.

The RFEOI process included a briefing, site visits, and extensive industry consultations. The RFEOI did not involve any form of evaluation and was not a pre-requisite to participation in any future procurements, if applicable.

As part of the industry consultation process, the RFEOI included an opportunity for organizations to request one-on-one consultation sessions. As a result, consultation sessions with twenty six organizations were held during the month of April 2012. The organizations represented various industry interests.

A total of thirty one (31) questions were received. Responses were published via amendments issued on MERX. A total of thirteen (13) amendments were issued during the RFEOI process which included responses to inquiries and RFEOI modifications.

The PPI FM Team reviewed all relevant project documentation including the RFEOI, amendments, and responses to questions received, attended the briefing, industry consultation sessions, and the majority of site visits. To address the situation where it was not possible for an FM to attend a site visit, a protocol was developed in consultation with the FM team which defined the roles, responsibilities and code of conduct for such site visits. This protocol was adhered to during all site visits conducted without an FM.

The process conducted conformed to the process defined in the RFEOI. All organizations were treated consistently and fairly. All fairness, openness and transparency issues concerning the RFEOI process were resolved with the PWGSC and/or NRCan project teams.

5. Request for information phase

The Request for information (RFI) Phase began when the RFI, solicitation number 23240-120758/D, was issued on buyandsell.gc.ca on July 18, 2013 with an amended closing date of September 30, 2013.

The RFI was issued to obtain feedback from industry on various aspects of the proposed procurement process. The primary objectives of the RFI were to:

1. inform suppliers about the proposed procurement process, along with the associated timelines and national security requirements and to solicit feedback on any aspect of the procurement process;
2. solicit feedback on the draft mandatory technical criteria to be used to pre‐qualify suppliers during the Request for response evaluation (RFRE) pre‐screening and industry detailed consultation stage; and,
3. provide information on security clearance requirements so as to solicit feedback on these items and prompt suppliers to initiate security clearance processes if required.

The RFI process also included an industry day, one-on-one consultations, and site visits to two of AECL’s nuclear laboratories. Further, an electronic data room was also established and access provided, in accordance with the defined protocol and user restrictions, to respondents; to enable PWGSC, NRCan and AECL to provide contextual and reference data related to the opportunity.

A total of three (3) amendments were issued during the RFI process which included responses to inquiries and RFI modifications, as well as a post-close Notice with associated amendments, primarily related to security requirements.

The PPI FM Team reviewed all relevant project documentation including the RFI, its amendments, the post-close Notice and its associated amendments and responses to questions received, attended the industry day, consultation sessions, and the site visits.

The process conducted conformed to the process defined in the RFI. All organizations were treated consistently and fairly. All fairness, openness and transparency issues concerning the RFI process were resolved with the PWGSC and/or NRCan project teams.

6. Request for response evaluation phase

The Request for response evaluation (RFRE) Phase began when the RFRE, solicitation number 23240-120758/F, was issued on buyandsell.gc.ca on March 7, 2014 with an amended closing date of January 30, 2015.

The RFRE invited suppliers to submit responses indicating their interest in becoming qualified during Stage 1: RFRE Stage and thereafter participate in the anticipated Stage 2: RFP Stage and, if selected to do so, upon completion of such stage, participate in the anticipated Stage 3: Contract finalization stage.

According to the process defined in the RFRE (and as amended) there were a total of eight opportunities for respondents to submit the required materials (called “intake dates”) to be qualified for eventual participation in the final RFP process. The RFRE intake process resulted in a total of four qualified respondents (“QR”s) which would be eligible to participate in the RFP Stage.

The RFRE incorporated an extensive consultation process, including seven “Group” consultation meetings, eight sets of individual (“one-on-one”) consultation meetings, and eight sets of site visits wherein QRs could visit the four major AECL sites: Chalk River Laboratories (Chalk River, Ontario); Nuclear Power Demonstration facility (Deep River, Ontario); Whiteshell Laboratories (Pinawa, Manitoba); and Port Hope Area Initiative (Port Hope, Ontario).

AECL had established an electronic “Data Room” during the RFI stage. Qualified Respondents were able to access approximately 4,600 additional documents which were placed into the data room during the RFRE stage.

During the RFRE process, Canada wanted to allow QRs to view and provide feedback on the draft RFP documents. Canada’s intention was to use the feedback provided to improve the documents and the proposed RFP process. Accordingly, the draft RFP documents were shared with QRs via electronic mail, following an established security protocol. Feedback was provided by all QRs and was used in the document finalization process.

The RFP required that the Bidder propose a number of “Key Personnel” to fulfill senior roles in the Canadian Nuclear Laboratories (CNL) organization, if selected as the Contractor. The RFP allowed a Bidder to propose existing CNL employees for any of those positions, if they chose. In order to allow the QR to examine existing CNL employee(s) and to make a decision concerning whether or not to propose such employee(s), an employee interview process was established. A protocol was established to govern the employee interview process, to ensure fair and consistent treatment of all QRs, employees, and to ensure all aspects of the Non-Disclosure Agreement and security requirements were adhered to. The protocol governing the employee interview process was reviewed by the FM team. All employee interview meetings were attended and observed by the FM team.

A total of 782 questions were received prior to the final question submission date. Responses to all 782 questions were delivered to the Qualified Respondents (QRs) prior to the end of the RFRE stage.

The PPI FM Team reviewed all relevant project documentation including the RFRE, amendments, responses to questions received, and all electronic mail communications with Respondents. The FM was present to observe all intake evaluation sessions, attended the “Group” consultation meetings, individual (“one-on-one”) consultation meetings, and the majority of site visits. To address the situation where it was not possible for an FM to attend a site visit, a protocol was developed in consultation with the FM team which defined the roles, responsibilities and code of conduct for such site visits. This protocol was adhered to during all site visits conducted without an FM.

The process conducted conformed to the process defined in the RFRE. All Respondents were treated consistently and fairly. All fairness, openness and transparency issues concerning the RFRE process were resolved with the PWGSC and/or NRCan project teams.

7. Request for proposal phase

The Request for Proposal Phase began when the RFP, solicitation number 23240-120758/H, was delivered to all Qualified Respondents simultaneously via e-mail on January 30, 2015. The RFP Phase ended on the RFP closing date of March 27, 2015.

A process was established through which documents were delivered by Canada to the designated Bidder Representatives via e-mail. This enabled simultaneous delivery of all information to all Bidders. This process was used for the delivery of the RFP documents, amendments, and question and answer sets.

The RFP incorporated a consultation process, including an optional Bidders’ Conference and a site visit process wherein Bidders could visit the three AECL sites that were of most importance for the RFP: Chalk River Laboratories (Chalk River, Ontario); Nuclear Power Demonstration facility (Deep River, Ontario); and Whiteshell Laboratories (Pinawa, Manitoba).

During the RFP process Bidders were permitted to continue to conduct due diligence on the AECL sites, buildings, assets, projects, plans, etc., as had been done during the RFRE process. The same electronic “Data Room” was used as had been available during the RFRE process.

In order to allow the Bidders to propose existing CNL employees for a number of “Key Personnel” roles in the CNL organization, an employee interview process was established during the RFRE process. This same process was continued during the RFP process. The protocol also contemplated communications that would be required between a Bidder and an employee – e.g. to provide the employee’s résumé to the Bidder which was required by the RFP. This process was reviewed by the FM Team. All communications between employees and Bidders were reviewed by the FM Team. All meetings between employees and Bidders were attended by the FM Team.

A total of 135 questions were received prior to the final question submission date. Responses to all 135 questions were delivered to the Bidders.

The PPI FM Team reviewed all relevant project documentation including the RFP, amendments, responses to questions received, and all electronic mail communications with Bidders. The FM was present to observe the Bidders’ Conference, and the site visits.

The process conducted conformed to the process defined in the RFP. All Bidders were treated consistently and fairly. All fairness, openness and transparency issues concerning the RFP process were resolved with the PWGSC and/or NRCan project teams.

8. Proposal evaluation phase

The Proposal Evaluation Phase began when the RFP solicitation period closed on March 27, 2015. PWGSC received three (3) proposals by the closing date and time on March 27, 2015. The following activities were monitored by the Fairness Monitoring Team.

The PWGSC and NRCan project teams had collaborated to develop an Evaluation Guide for use during the evaluation phase. The guide describes the principles, processes and procedures that would be used for the evaluation of the Bids that were received in response to the RFP, including the roles and responsibilities of the individuals who were involved in the evaluation as evaluators, peer reviewers, advisors, legal advisors and support persons. The RFP evaluation guide included directives concerning objectivity, document security, confidentiality, individual reviews, consensus sessions, recording scores and substantiating comments (rationale for scoring), the provision of advice from the Advisors, and procedures for communicating with Bidders – only through the Contracting Authority. The completed RFP Evaluation Guide was reviewed by the FM prior to the RFP closing date.

An Evaluation Kick-Off meeting was held to deliver the Evaluator Briefing and conduct the distribution of evaluation documents. The briefing provided direction concerning conducting the evaluation in accordance with the stipulated selection process and the process defined in the RFP Evaluation Guide.

The evaluation was conducted in Phases, according to the process defined in the RFP and the RFP Evaluation Guide.

The RFP provided an option for Canada to seek clarification or verification from Bidders regarding information provided by them with respect to the RFP, and an option for Canada to conduct reference validations, both at Canada’s discretion. One clarification was sought and received from a Bidder. The FM Team reviewed the electronic mail communications with the Bidder concerning the clarification. The evaluators determined that, for the purposes of conducting the evaluation and adequately assessing the bids, there was no information provided in the Bids that required verification by references. Accordingly, no reference validations were conducted.

The PPI FM Team was present to observe the Evaluation Kick-Off meeting and all proposal evaluation consensus sessions. The FM team reviewed all documentation prepared by the evaluators concerning evaluation findings, decisions made, and results achieved.

The proposal evaluation process conducted conformed to the requirements of the RFP and the RFP Evaluation Guide. All Bidders were treated consistently and fairly. All observations and/or requests for clarification made by the FM Team were addressed by the PWGSC and/or NRCan project teams. All fairness, openness and transparency issues concerning the proposal evaluation process were resolved with the PWGSC and/or NRCan project teams.

9. Reference documents

• The Request for Expression of Interest (RFEOI) and all its Amendments were reviewed by the FM Team.
• The Request for Information (RFI), and all its Amendments were reviewed by the FM Team.
• The Request for Response Evaluation (RFRE) and all its Amendments were reviewed by the FM Team.
• The Request for Proposals (RFP), its Annexes, and Amendments were all reviewed by the FM Team.

A process was established through which documents were delivered by Canada to the designated Bidder Representatives via e-mail. This enabled simultaneous delivery of all information to all Bidders. This process was used for the delivery of the RFP documents, amendments, and question and answer sets during the RFP Phase.

Table summary

The following table includes a list of documents referred to in the report such as the Request for Proposal (RFP), amendments, clarification letters, debriefing letters, etc. Each row is numbered, followed by the document title, then a document identifier such as a date or document number.

#	Document	Date
1	Request for Expression of Interest (RFEOI) solicitation number 23240-120758/A.	Posted on MERX February 8, 2012
2	Amendment 1 to 13 of the RFEOI	Posted on MERX February 2012 – March 2012
3	Notice of Security Sponsorship solicitation number 23240-120758/B.	Posted on buyandsell.gc.ca – April 2, 2013
4	Notice: Restructuring of AECL’s Nuclear Laboratories – Industry Day solicitation number 23240-120758/C.	Posted on buyandsell.gc.ca – June 19, 2013
5	Request for Information (RFI) solicitation number 23240-120758/D.	Posted on buyandsell.gc.ca – July 19, 2013
6	Amendment 1 to the RFI	Posted on buyandsell.gc.ca –August 7, 2013
7	Amendment 2 to the RFI	Posted on buyandsell.gc.ca –August 14, 2013
8	Amendment 3 to the RFI	Posted on buyandsell.gc.ca –August 22, 2013
9	Notice – AECL RFI Feedback solicitation number 23240-120758/E.	Posted on buyandsell.gc.ca – October 9, 2013
10	Request For Response Evaluation (RFRE) solicitation number 23240-120758/F. Annex A – Draft General Requirements Annex B – Anticipated End-State Contracting Model Annex C – Background on AECL Annex D – Contents of the Data Rooms Annex E – Requirements for Access to Data Rooms (GFI) Annex F – Mandatory Technical Criteria Annex G – Respondent Preparation Checklist Annex H – Non-Disclosure Agreement Annex I – AECL Site Visit Form Annex J – Terms of Engagement Annex K – Draft Technical Criteria for the Request for Proposal Bid Evaluation Annex L – Supplemental Other Team Member Forms Appendix 1 to Annex L – Certifications Appendix 2 to Annex L – Preparation Instructions	Posted on buyandsell.gc.ca – March 7, 2014
11	RFRE Amendment 1	Posted on buyandsell.gc.ca March 24, 2014
12	RFRE Annex H – NDA – Revised	Posted on buyandsell.gc.ca March 27, 2014
13	RFRE Amendment 2	Posted on buyandsell.gc.ca March 27, 2014
14	RFRE Amendment 3	Posted on buyandsell.gc.ca March 28, 2014
15	RFRE Amendment 4	Posted on buyandsell.gc.ca April 1, 2014
16	RFRE Amendment 5	Posted on buyandsell.gc.ca April 7, 2014
17	RFRE Amendment 6	Posted on buyandsell.gc.ca May 8, 2014
18	RFRE Amendment 7	Posted on buyandsell.gc.ca May 16, 2014
19	RFRE Amendment 8	Posted on buyandsell.gc.ca May 21, 2014
20	RFRE Amendment 9	Posted on buyandsell.gc.ca May 23, 2014
21	RFRE Amendment 10	Posted on buyandsell.gc.ca May 29, 2014
22	RFRE Amendment 11	Posted on buyandsell.gc.ca June 13, 2014
23	RFRE Amendment 12	Posted on buyandsell.gc.ca June 19, 2014
24	RFRE Amendment 13	Posted on buyandsell.gc.ca July 4, 2014
25	RFRE Amendment 14 re Names of QRs	Posted on buyandsell.gc.ca July 25, 2014
26	RFRE Amendment 15	Posted on buyandsell.gc.ca July 31, 2014
27	RFRE Amendment 16	Posted on buyandsell.gc.ca August 5, 2014
28	RFRE Amendment 17	Posted on buyandsell.gc.ca August 22, 2014
29	RFRE Amendment 18	Posted on buyandsell.gc.ca September 8, 2014
30	RFRE Amendment 19	Posted on buyandsell.gc.ca September 12, 2014
31	RFRE Amendment 20	Posted on buyandsell.gc.ca October 7, 2014
32	RFRE Amendment 21	Posted on buyandsell.gc.ca October 10, 2014
33	RFRE Amendment 22	Posted on buyandsell.gc.ca October 28, 2014
34	RFRE Amendment 23	Posted on buyandsell.gc.ca November 3, 2014
35	RFRE Amendment 24	Posted on buyandsell.gc.ca November 17, 2014
36	RFRE Amendment 25	Posted on buyandsell.gc.ca November 25, 2014
37	RFRE Amendment 26	Posted on buyandsell.gc.ca December 12, 2014
38	RFRE Amendment 26	Posted on buyandsell.gc.ca December 12, 2014
39	RFRE Amendment 27	Posted on buyandsell.gc.ca December 22, 2014
40	RFRE Amendment 28	Posted on buyandsell.gc.ca December 30, 2014
41	RFRE Amendment 29	Posted on buyandsell.gc.ca January 30, 2015
42	Update for Atomic Energy of Canada Limited (AECL) Restructuring Project solicitation number 23240-120758/G.	Posted on buyandsell.gc.ca – October 9, 2013
43	Request for Proposals (RFP) and Annexes solicitation number 23240-120758/H.	Delivered via e-mail – January 30, 2015
44	RFP – Amendment 1	Delivered via e-mail – February 11, 2015
45	RFP – Amendment 2	Delivered via e-mail – February 20, 2015
46	RFP – Amendment 3	Delivered via e-mail – March 6, 2015
47	RFP – Amendment 4	Delivered via e-mail – March 6, 2015
48	RFP – Amendment 5	Delivered via e-mail – March 11, 2015
49	RFP – Amendment 6	Delivered via e-mail – March 13, 2015
50	RFP – Amendment 7	Delivered via e-mail – March 18, 2015
51	RFP – Amendment 8	Delivered via e-mail – March 24, 2015

Addendum to the final report

Addendum to fairness monitor final report for Atomic Energy of Canada Limited nuclear laboratories restructuring project (NLRP)

September 23, 2015.

This Addendum to the Fairness Monitor Final Report covers the period following the conclusion of the evaluation phase.

Contract award, communications and debriefing

The successful bidder was selected and a contract awarded September 13, 2015. Debriefings were offered in written form only. Debriefing letters were prepared and issued to the two unsuccessful bidders during the week of September 13, 2015. Each debriefing letter contained a summary of the evaluation of that bidder’s own proposal.

It is our professional opinion that the AECL – NLRP procurement we observed was carried out in a fair, open and transparent manner.