Translation firm sues for $3M-plus
Krupp goes after government again after a second abrupt termination
It has been a bizarre couple of years for Masha Krupp, the outspoken head of the Ottawa translation company that bears her name. Major business dealings with the federal government have been abruptly terminated twice.
She fought back successfully in the first case involving the Canada Revenue Agency and is challenging through the courts to reverse the second termination, brought by Public Services and Procurement Canada.
This is not the way things are supposed to work in federal procurement. The Masha Krupp Translation Group launched a $3-million suit late last month against Public Services and Procurement Canada for breach of contract and appears to be seeking a further $5.9 million in damages.
This after the department cancelled a translation services deal awarded in 2017 by the Courts Administration Service — the agency that supports four federal superior courts, including the Court of Appeal. (Public Services negotiated the contract on behalf of the CAS).
Krupp’s company alleges Public Services improperly invoked a contract clause dealing with “unsatisfactory performance.” For instance, the procurement document specifies that translators cannot make more than six minor errors for every 1,000 words — defined as a grammatical error, typo or lack of clarity.
In its statement of claim, the Masha Krupp Translation Group said it performed as spelled out in the contract but had been unaware of “certain stylistics and department preferences” at the CAS.
“In many cases, the ‘errors’ or ‘quality control’ issues identified by CAS were not in fact errors or quality control issues at all,” the company alleged, adding that it “was not given adequate time to learn through its transition into the role.”
Nor, the company alleged, had Public Services followed the appropriate procedure for terminating a supplier. These claims have not been tested in court.
Public Services was not immediately available for comment.
This is no ordinary dispute, in part because by jettisoning Krupp’s translators, the CAS can return to using its former contractor, New Brunswick-based CLS Lexi-Tech.
Incumbency and favouritism are perennial complaints in federal government contracting, though it’s not clear if these are at issue here.
The contract in question is a standing offer, which allows the CAS to select from one of three translation firms that successfully bid last year to be included on the short list. The Masha Krupp Translation Group claims it was ranked first ahead of CLS Lexi-Tech.
The bid document clarifies that the CAS must select the company that ranked highest in the evaluation phase. The Masha Krupp Translation Group said it received four “call-ups” for work before being terminated. Only when the top-ranked firm is unable to do the work, because it doesn’t have the translators available, for example, can the CAS move to the second-ranked firm.
Thanks to its long history serving the federal courts, CLS LexiTech would be familiar with their translation preferences.
CLS Lexi-Tech also features prominently in Krupp’s other long-running saga involving the CRA.
Two years ago, Krupp, who declined an interview request, was stunned to learn she had lost the right to perform nearly $5 million per year worth of translation services with Canada Revenue until 2023. Translation work at the agency had been central to Krupp’s reputation as an independent force in the capital region’s translation industry. Because the federal government’s own Translation Bureau handles more than 80 per cent of the required translation work each year, losing the Canada Revenue deal was all the more costly.
The winner of that 2016 contract? CLS Lexi-Tech.
Krupp challenged the result at the Canadian International Trade Tribunal, the federal body that handles disputes over contracts.
The tribunal concluded the competition to establish the winner was flawed. Documents filed by Canada Revenue revealed the reference checks had been conducted by different evaluators. Not only that, the documents noted, the evaluators had consulted “someone not named as a reference.” The tribunal ruled last March that Canada Revenue’s procurement officials had “compromised the evaluation beyond repair.”
The Federal Court of Appeal last month dismissed Canada Revenue’s application for a judicial review.
Canada Revenue accordingly is re-tendering the contract, with the revised deadline for bids coming up on July 17.
Meantime, the federal tax agency and Krupp have presumably been negotiating over compensation. The tribunal had ruled Krupp’s company should be paid for “lost opportunity to profit.” It’s not known when this aspect of the contract will be resolved.
Ironically, it was Krupp’s ability to secure the 2017 CAS contract that gave her hope the worst was behind her after she lost her Canada Revenue business. The initial value of the CAS deal was $3.6 million, good until March 31, 2019, with the possibility of three one-year extensions.
Krupp’s firm estimates in its lawsuit that it will lose $5.9 million worth of business and profits as a result of the early termination of the contract. Krupp is seeking appropriate damages.
In the midst of all this, Krupp learned that her company had won a translation services contract with the four-year old Administrative Tribunal Support Service of Canada, which serves 11 federal tribunals. It’s a oneyear contract with three oneyear extensions and a potential value of $2 million. At this rate, Krupp will believe it when she has the money in hand.