Canada: Alternative Routes To Challenge Procurement Decisions - Part 2

Last Updated: June 24 2013
Article by Elizabeth Mayer

Canadian International Trade Tribunal (CITT)

For any procurement involving the federal government, bidders have the opportunity to challenge the government decision through the Canadian International Trade Tribunal. The Tribunal deals with complaints under the Agreement on Internal Trade (AIT), the North American Free Trade Agreement (NAFTA) and other international trade agreements. It is primarily of interest to Canadian procurement lawyers for its consideration of the application of the Agreement on Internal Trade. This Agreement applies to the provinces and certain other public sector bodies in Canada and decisions on its application are therefore of wider interest. The Tribunal was established under the Canadian International Trade Tribunal Act and is governed by the Act and regulations made under it. All of the decisions of the CITT are available online. Further information on the CITT can be found here.

Benefits of CITT

One of the benefits of the CITT to the bidder, is that there is no requirement to prove the contract A/ contract B analysis or to make a claim based on breach of contract. The Tribunal also provides a very quick remedy - decisions must usually be made within 90 days of the complaint having been made, with tight timelines on the government body to respond to the complaint and the complainant to reply. In many cases the Tribunal makes its decisions on the basis of the written record, although it, or one of the parties, may call for a public hearing.

Powers of the CITT

The Tribunal has the power to postpone the award of a contract, to order a procurement to be undertaken again or to award damages to a bidder, either for its costs of preparing a bid or for the loss of opportunity. The CITT may award damages even where the acts of the government body did not cause any loss. For example, in E.G Spence v. PWGSC (File No. PR-2011-049) PWGSC put out an RFP for maintenance services for washers and dryers at Canadian Forces Bases. Each bidder provided a unit price per machine. In its evaluation PWGSC multiplied the unit prices of each bidder by the total number of machines (900). E.G. Spence raised a complaint on the basis that its understanding from the RFP and the mandatory site visit was that the services would be limited to 475 machines and therefore this was the correct multiplier to have used. 

The CITT upheld the complaint - the correct multiplier should have been 475. However, because PWGSC had used the same incorrect multiplier for each bidder, the results of the evaluation did not change - E.G Spence was not the successful bidder. The Tribunal still awarded damages against PWGSC for the costs incurred by E.G. Spence in preparing its proposal. The reason for this was stated to be that the Tribunal has a regulatory role as well as a decision-making role in the procurement process. It may therefore exercise its powers in order to maintain "potential bidder's confidence in the integrity of the procurement system". The Tribunal considered that the PWGSC error was such that it would undermine bidders' confidence in future evaluations, especially given that the procurement process in this case was fairly simple and therefore it was unexpected that mistakes would be made.

Time Limits

One main limitation of the Tribunal is that complaints must be filed within 10 working days of the day on which the "basis of the complaint became known or reasonably should have become known to the potential supplier". So, if the complaint relates to the terms of an RFP, for example, claiming that the terms are too vague or contain requirements that are not in accordance with the AIT, the complaint must be raised within 10 workings days of the date on which the complainant should have recognized the problem. It is therefore not possible to wait until the end of the procurement process and then to raise a complaint on these matters. There is one slight variation from this, where the bidder makes a complaint directly to the procuring authority within the applicable timeline, the deadline for filing a complaint with the CITT does not run until 10 working days after the complaint is rejected by the procuring authority.  

An example of how strictly these time lines are applied can be seen in one of the most recent decisions of the CITT, Flag Connection Inc. v, PWGSC (File number PR-2013-003). In this case, Flag Connection Inc. (FCI) alleged that the Department of National Defence, in its RFP for the procurement of Canadian flags for the purpose of repatriation ceremonies, had requested flags that did not comply with the standards of the Canadian General Standards Board relating to the manufacture of the national flag of Canada as set out in the National Flag of Canada Manufacturing Standards Act. FCI made its initial complaint to PWGSC on March 22, 2013. PWGSC formally responded on April 15, 2013, refusing to amend the RFP. FCI filed its complaint at the CITT on April 30, 2013. However, the 10 working days from April 15 expired on April 29, and accordingly the CITT refused to hear the case.  

One final point to note on time limits is that if a bidder has raised an objection with the government body, a complaint cannot be made until that body has refused the relief sought. For example, in The Corporate Research Group Ltd. v. The Department of Foreign Affairs and International Trade (File number (PR-2012-004), the bidder alleged that its proposal was not fairly evaluated in accordance with the RFP. It raised a complaint with the DFAIT and the Department agreed to re-evaluate the proposal. At the time the complaint was made to the CITT the bidder had not heard anything further. The Tribunal held that there had not at that point been a denial of relief and therefore it would not hear the complaint. The Tribunal said that the complaint could be brought once the Department responded or if the Department did not respond within a reasonable period of time (set by the Tribunal as around three weeks later).  

The next installment of this blog will explore the decisions of the CITT in more detail.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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