Date: 20110914
Docket: A-39-11
Citation: 2011 FCA 251
CORAM: SHARLOW
J.A.
PELLETIER J.A.
MAINVILLE
J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
SIEMENS ENTERPRISE
COMMUNICATIONS INC.
Respondent
REASONS FOR JUDGMENT
MAINVILLE J.A.
[1]
The
Attorney General of Canada (the “Crown”) has applied for judicial review
seeking to quash a determination of the Canadian International Trade Tribunal
(the “Tribunal”) issued on December 23, 2010 with reasons issued on April 19,
2011 in the matter of various complaints filed by Siemens Enterprise
Communications Inc. (“Siemens”), formerly Enterasys Networks of Canada Ltd.,
pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal
Act, R.S.C. 1985 (4th Supp.) c. 47 (the “Act”) and concerning
Requests for Volume Discounts (“RVD”) 773, 781, 783, 784 and 785 and bearing
Tribunal file numbers PR-2010-049, PR-2010-050 and PR-2010-056 to PR-2010-058.
[2]
The
Tribunal’s inquiry into these complaints was carried out within the context of
a series of inquiries dealing with complaints filed by Enterasys Networks of
Canada Ltd. and concerning various RVDs for the supply of networking equipment
by the Department of Public Works and Government Services (“PWGSC”) on behalf
of various federal government departments under a Networking Equipment Support
Services National Master Standing Offer, which is a means by which federal
government departments may obtain computer networking equipment.
[3]
The
Crown’s principal submissions challenge a) the standing of Siemens and the
jurisdiction of the Tribunal concerning some of the complaints, b) the
Tribunal’s interpretation of Article 1007(3) of the North American Free
Trade Agreement entered into between the Government of Canada, the
Government of the United Mexican States and the Government of the United States
of America signed on December 17, 1992 and contemplated by the North
American Free Trade Agreement Implementation Act, S.C. 1993, c.44 (“NAFTA”)
as it relates to the use of brand names in procurements, and c) the Tribunal’s
findings regarding the inadequacy of certain time frames in respect of some of
the RVDs.
Lack of standing or of jurisdiction
[4]
The
Crown’s main argument in respect to the complaints related to RVD 773, RVD 781
and RVD 785 is that the Tribunal had no jurisdiction because Siemens was not a
“potential supplier” nor an “interested party” under the meaning of section
30.1 of the Act, and consequently could not submit complaints under section
30.11 of the Act since neither Siemens nor any of its agents had submitted a
bid in response to these RVDs and the Tribunal had found that no act of PWGSC
in the procurement process had precluded Siemens from submitting a bid.
[5]
The
Tribunal rejected the Crown’s arguments on standing and jurisdiction in this
case on the same basis as it had rejected a similar objection in its
determination concerning another complaint of Enterasys Networks of Canada
Ltd., bearing Tribunal file number PR-2009-080. The Tribunal’s determination in
that file PR-2009-080 was recently reviewed by this Court in Attorney
General of Canada v. Enterasys Networks of Canada Ltd., 2011 FCA 207 (“Enterasys”)
at paragraphs 5 to 17. In Enterasys, Sharlow J.A. reasoned that in light
of the Tribunal’s findings of fact the complainant had not been precluded from
bidding by any aspect of the procurement process that was objectionable under
the NAFTA, the complainant did not meet the statutory definition of
“potential supplier” and therefore the Tribunal was obligated, as a matter of
law, to dismiss the complaints.
[6]
In this
case, the Tribunal reached similar findings of fact in concluding that “PWGSC’s
action did not preclude Siemens from submitting a bid and, possibly, being
awarded a contract” (Tribunal Reasons at paragraph 274). The circumstances in
this case are therefore indistinguishable from those in Enterasys and
the reasons set out therein are thus binding on this panel of the Court.
Consequently, the Crown’s application for judicial review should be allowed on
this point and the Tribunal’s determinations in respect of the complaints
pertaining to RVD 773, RVD 781 and RVD 785 should be quashed and the matter
returned to the Tribunal with a direction that those complaints be dismissed.
Use of brand names
[7]
The
complaints pertaining to the use of brand names contrary to Article 1007(3) of
the NAFTA were made in relation to RVD 773 and RVD 781 (Tribunal Reasons
at paragraphs 2 to 14). As noted above, the complaints concerning RVD 773 and
RVD 781 should be rejected on the basis of lack of standing or of jurisdiction;
it should therefore not be necessary to consider the issue of the use of brand
names for the purpose of disposing of this application for judicial review.
However, since this issue was also dealt with in Enterasys, and in light
of the similarities between this case and Enterasys, I will add the
following.
[8]
The
Tribunal’s determination in this case concerning the use of brand names for the
purposes of procurement was largely based on its previous determination
relating to the complaints of Enterasys Networks of Canada Ltd. in Tribunal
file PR-2009-080 which was reviewed at length by this Court in Enterasys,
above, at paragraphs 18 to 27. In Enterasys, Sharlow J.A. did not accept
the proposition implicit in the Tribunal’s determination that Article 1007(3)
of the NAFTA necessarily requires the federal government to take
unacceptable operational risks in procuring equipment. It follows that the
Tribunal, in determining whether a particular procurement may use a brand name
specification, cannot disregard or discount as irrelevant evidence submitted by
PWGSC in support of its position that the use of brand names in relation to a
particular procurement was necessary to avoid an unacceptable operational risk
(Enterasys at paragraph 25).
[9]
In this
case, as in Enterasys, the Tribunal’s interpretation and application of
Article 1007(3) of NAFTA was unreasonable in that the Tribunal concluded
that no exception to the use of brand names could be sustained on the basis of
operational risks, and consequently none of the evidence concerning such risks
was pertinent (see notably paragraphs 151 to 153 of the Tribunal’s Reasons).
Adequacy of time
[10]
The
Crown’s objection on the basis of standing or jurisdiction did not extend to
the complaints with respect to RVD 784 and RVD 783, and consequently the
principles set out in Enterasys do not find application in respect to
these complaints.
[11]
The
Tribunal found that the bidding periods for RVD 784 and RVD 783 were less than
the 4 working days specified in the applicable National Master Standing Offer,
and thus contravened Article 1012 of the NAFTA which calls for adequate
time for suppliers to prepare and submit tenders.
[12]
The Crown
concedes that the bidding period for RVD 784 was less than the specified 4
working days, but argues that it was justified to reduce the applicable time
frame for reason of the urgency of the concerned procurement. Since the
solicitation period for this RVD 784 closed on August 24, 2010 and the contract
was only awarded on September 13, 2010, the Tribunal found that the Crown had
not shown that urgency justified the shortened time frame. Based on the record
before me, I cannot find that the conclusion of the Tribunal on this issue was
unreasonable.
[13]
The Crown
also disputes that the bidding period for RVD 783 was less than 4 working days,
and asserts that the Tribunal erred in fact at paragraph 216 of its Reasons in
finding that “the solicitation period for RVD 783 was limited to two partial
and two full working days.” Rather, the Crown claims that the bidding period
for RVD 783 consisted of 3 full working days and two half working days for a
total of 4 working days. However, whether the Tribunal erred or not in
calculating the number of days, or whether half working days should be
considered or not for the purposes of calculating the bidding period are issues
which need not be addressed in the context of this judicial review in light of the
Tribunal’s conclusion that the degree to which Siemens was prejudiced could
have been minimal or even non-existent (Tribunal Reasons at paragraph 275). As
noted in Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12,
[2009] 1 S.C.R. 339 at paragraph 40, the Federal Court, and by necessary
implication this Court, holds a discretion to grant or withhold relief in
judicial review proceedings, a discretion which, of course, must be exercised
judicially and in accordance with proper principles. A decision of this Court
on the calculation of the bidding period will not affect the Tribunal’s
conclusions as to the lack of prejudice to Siemens and the unavailability to it
of any remedies. In these circumstances, a discussion of the method of
calculation and of the adequacy of bidding periods for procurement purposes
under NAFTA is better left for another day.
Costs
[14]
Though the
Crown has been largely successful in its application for judicial review, the
issues which it raised were for the most part already dealt with in Enterasys.
Moreover, the Tribunal’s conclusion as to the unjustified reduction of the 4
working days bidding period for RVD 784 has been found to be reasonable.
Finally, the respondent has not participated in these judicial review
proceedings. Taking into account all of these factors, I would make no order as
to costs.
Conclusions
[15]
I would
allow in part the Crown’s application for judicial review, quash the
determinations of the Tribunal in respect of the complaints pertaining to RVD
773, RVD 781 and RVD 785, and return the matter to the Tribunal with a
direction that those complaints be dismissed.
"Robert
M. Mainville"
“I
agree
K. Sharlow J.A.”
“I
agree
J.D. Denis Pelletier J.A.”
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