Date: 20041103
Docket: T-1605-04
Citation: 2004 FC 1545
BETWEEN:
AGUSTAWESTLAND INTERNATIONAL LIMITED
Applicant
and
MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES
AND SIKORSKY INTERNATIONAL OPERATIONS, INC.
Respondents
REASONS FOR ORDER
KELEN J.:
[1] This proceeding concerns two motions. The first is a motion by the Respondents, Public Works and Government Services Canada and Sikorsky International Operations, Inc., to strike this application for judicial review of a procurement process conducted by Public Works for a contract to supply helicopters to the Armed Forces. The second is a motion by AgustaWestland International Limited for a declaration that the application is timely, or in the alternative, that an extension of time for applying for judicial review be granted under s. 18.1(2) of the Federal Courts Act, R.S.C. 1985, c. F-7, as amended.
THE FACTS
[2] This case involves the procurement of 28 maritime helicopters.
[3] The early factual background was considered by the Federal Court of Appeal in E.H. Industries Ltd. v. Canada (Minister of Public Works and Government Services), (2001) 267 N.R. 173, 2001 FCA 48. In that case, Malone J.A. succinctly set out the following background facts in paragraph 4, which I repeat, in part, while noting that "EHI" has changed its name to AgustaWestland International Limited:
¶ 4 In order to deal with these issues a brief recital of the facts is necessary:
i) In 1987, EHI successfully acquired the contract to supply Canada with EH-101 helicopters to replace its maritime shipborne helicopter fleet. In 1991, a similar contract issued to replace Canada's search and rescue fleet. A total of fifty EH-101 helicopters were ordered but those orders were subsequently cancelled with the payment of substantial penalties to EHI;
ii) In 1996, Canada issued a Request for Proposal ("RFP") for search and rescue helicopters known as the Canadian Search Helicopter procurement. EHI was the successful bidder and has contracted with Canada to supply fifteen Cormorant helicopters for search and rescue duties;
iii) On August 17, 2000 the Minister of National Defence announced Canada's intention to proceed with the replacement of the Canadian Forces fleet of CH124 Sea King helicopters.
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viii) On October 11, 2000, the Applicant filed a complaint with CITT alleging that Canada has structured the procurement procedure for maritime shipborne helicopters in an intentionally discriminatory manner contrary to Article 504(2) of the AIT;
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x) On October 31, 2000, CITT advised EHI that it had reviewed the complaint and determined that it did not disclose a reasonable indication that Canada has acted contrary to the procurement procedures in the subject agreement. The reasons of the Tribunal were as follows:
The Tribunal has reviewed the evidence and the information provided by the complainant and is of the view that the complaint does not disclose a reasonable indication that PWGSC has acted contrary to the procurement procedures in the applicable agreement, namely the Agreement on Internal Trade (AIT). The AIT does not require that the government use a certain type of selection method and nothing in the AIT requires the government to purchase a particular type or brand of product simply because it already owns some of that product or brand. In addition, the procurement is currently at the "letter of interest" stage and, therefore the final specifications and selection criteria are not yet set.
ix) On November 8, 2000 EHI commenced the within application seeking to review the CITT decision. On November 21, 2000, the Applicant again contacted CITT and asked for reconsideration of its decision of October 31, 2000 based on new information submitted. On November 28, 2000, CITT refused EHI's second request on the grounds that no new issues were raised in the subsequent submissions.
[4] Malone J.A. noted that while the evidence in this case may eventually demonstrate that the procurement procedure suffered from "patent politicization", however, it did not reveal discrimination at this preliminary stage of the process. Malone J.A. stated at paragraph 16:
Taken together this evidence may eventually demonstrate that the procurement procedure suffered from patent politicization within the Department of National Defence. However, in my view, it does not reveal discrimination against EHI at this preliminary stage of the process and the ongoing consultative process with industry.
Finally, Malone J.A. held that the Court was not expressing any opinion as to the jurisdiction of the Canadian International Trade Tribunal ("the Tribunal") to entertain the complaint and that the Tribunal was wrong to examine the merits of the complaint. Malone J.A. stated at paragraph 18:
In view of the conclusion the Court has reached on the merits of the application for judicial review, it is expressing no opinion as to the jurisdiction of the Tribunal to entertain the complaint filed by the applicant. The Tribunal was wrong, in my view, to examine the merit of the complaint. It should have dismissed it solely on the ground of prematurity and the conclusions it has reached on the merit of the complaint have, of course, no value as a precedent.
[5] Against this background, the procurement process proceeded. The applicant was selected as one of two qualified bidders, and invited to submit a proposal for the 28 helicopters. The applicant submitted its bid on July 23, 2004. Public Works announced that the contract would be awarded to the other qualified bidder, Sikorsky.
[6] The applicant sought answers to a number of questions about this decision which were supplied by Public Works on August 23, 2004. The applicant commenced this application for judicial review of that decision on September 1, 2004, nine days after receiving the information requested from Public Works.
Events following the announcement of the evaluation of bids and that the contract would be awarded to Sikorsky
[7] The Minister released the results of the evaluation of the bids on Friday, July 23, 2004 when it announced that the contract would be awarded to Sikorsky. Agusta met with the Public Works maritime helicopter project management office on Monday, July 27, 2004 for an official "debriefing". Agusta immediately asked a number of questions regarding the evaluation of the Agusta proposal. Public Works requested that these questions be submitted in writing.
[8] Accordingly, Agusta submitted a letter dated July 31, 2003 with nine written questions.
[9] Receiving no reply, Augusta sent another letter to Public Works on August 9, 2004 requesting a response to its letter of July 31, 2004. This letter stated in part:
We would appreciate it if you would contact us at your earliest convenience to advise as to the approximate date by which you expect to be able to answer the July 30th (sic) letter and to schedule a meeting to discuss the evaluation issues [...]
[10] Receiving no reply, Augusta wrote another letter to Public Works on August 12, 2004 again asking when Agusta might expect a response to its letters. This letter stated:
AWIL is eager to continue the technical debrief at the earliest possible opportunity; as such, we would appreciate it if you could advise us when we might expect a response to our letters of July 30th, July 31st, and August 9th".
[11] Augusta sent an e-mail to Public Works on August 13, 2004 again inquiring when Augusta would receive a response to its letters.
[12] Agusta was concerned about the "inordinate amount of time" that it was taking Public Works to respond to the questions submitted in writing on July 31, 2004. Accordingly, counsel for Agusta sent a letter on August 23, 2004 to the Assistant Deputy Minister of Public Works complaining that it had been assured it would receive answers to its written questions on a "high priority basis", and that Agusta needed to have these responses in order to make sense of the evaluator's comments.
[13] Public Works did respond to the questions in a letter addressed to Agusta dated August 23, 2004. The affidavit evidence of Gabriele A. Galleazzi, filed on behalf of Agusta, sets out three types of information received on August 23, 2004 which Agusta alleges it did not know about the evaluation, and which form the grounds for setting aside the evaluation of the bids.
The basis for this judicial review
[14] The applicant alleges that the decision to award the contract to Sikorsky was made in bad faith and in particular, that the Minister of Public Works and Government Services was biased against the applicant, and the evaluation process was controlled and interfered with so that the applicant's bid was rejected.
The basis for motion to strike this application for judicial review
[15] Public Works and Sikorsky submit that this application for judicial review ought be struck out on two bases:
1. that the application is out of time and that no extension of time ought be granted; and
2. that the application is barred because Parliament has established an adequate alternative statutory remedy, namely the applicant can file a complaint with respect to any aspect of the procurement process with the Canadian International Trade Tribunal, which has the authority and expertise to conduct an inquiry into a complaint about any aspect of the procurement process.
THE RELEVANT LEGISLATION
[16] The following are the relevant sections of the Federal Courts Act, R.S., 1985, c. F-7, s. 1; 2002, c. 8, s. 14:
| 18.1(3) Powers of Federal Court
(3) On an application for judicial review, the Federal Court may
(a) order a federal board, commission or other tribunal to do any act or thing it has unlawfully failed or refused to do or has unreasonably delayed in doing; or
(b) declare invalid or unlawful, or quash, set aside or set aside and refer back for determination in accordance with such directions as it considers to be appropriate, prohibit or restrain, a decision, order, act or proceeding of a federal board, commission or other tribunal.
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18.2 Interim orders
18.2 On an application for judicial review, the Federal Court may make any interim orders that it considers appropriate pending the final disposition of the application.
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18.1(3) Pouvoirs de la Cour fédérale
(3) Sur présentation d'une demande de contrôle judiciaire, la Cour fédérale peut_:
a) ordonner à l'office fédéral en cause d'accomplir tout acte qu'il a illégalement omis ou refusé d'accomplir ou dont il a retardé l'exécution de manière déraisonnable;
b) déclarer nul ou illégal, ou annuler, ou infirmer et renvoyer pour jugement conformément aux instructions qu'elle estime appropriées, ou prohiber ou encore restreindre toute décision, ordonnance, procédure ou tout autre acte de l'office fédéral.
[...]
18.2 Mesures provisoires
18.2 La Cour fédérale peut, lorsqu'elle est saisie d'une demande de contrôle judiciaire, prendre les mesures provisoires qu'elle estime indiquées avant de rendre sa décision définitive.
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[17] The relevant provisions of the Canadian International Trade Tribunal Act, R.S., 1985, c. 47 (4th Supp.) ("CITT Act") are as follows:
| Definitions
30.1 In this section and in sections 30.11 to 30.19,
30.1 "complaint" « _plainte_ »
"complaint" means a complaint filed with the Tribunal under subsection 30.11(1);
30.1 "designated contract" « _contrat spécifique_ »
"designated contract" means a contract for the supply of goods or services that has been or is proposed to be awarded by a government institution and that is designated or of a class of contracts designated by the regulations;
30.1 "government institution" « _institution fédérale_ »
"government institution" means any department or ministry of state of the Government of Canada, or any other body or office, that is designated by the regulations;
30.1 "interested party" « _intéressée_ »
"interested party" means a potential supplier or any person who has a material and direct interest in any matter that is the subject of a complaint;
30.1 "potential supplier" « _fournisseur potentiel_ »
"potential supplier" means, subject to any regulations made under paragraph 40(f.1), a bidder or prospective bidder on a designated contract.
[...]
30.11(1) Filing of complaint
30.11 (1) Subject to the regulations, a potential supplier may file a complaint with the Tribunal concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint.
30.11(2) Contents of complaint
(2) A complaint must
(a) be in writing;
(b) identify the complainant, the designated contract concerned and the government institution that awarded or proposed to award the contract;
(c) contain a clear and detailed statement of the substantive and factual grounds of the complaint;
(d) state the form of relief requested;(e) set out the address of the complainant to which notices and other communications respecting the complaint may be sent;
(f) include all information and documents relevant to the complaint that are in the complainant's possession;
(g) be accompanied by any additional information and documents required by the rules; and
(h) be accompanied by the fees required by the regulations.
30.11(3) Chairperson may assign member
(3) The Chairperson may assign one member of the Tribunal to deal with a complaint and a member so assigned has and may exercise all of the Tribunal's powers, and has and may perform all of the Tribunal's duties and functions, in relation to the complaint.
[...]
30.13(3) Postponement of award of contract
(3) Where the Tribunal decides to conduct an inquiry into a complaint that concerns a designated contract proposed to be awarded by a government institution, the Tribunal may order the government institution to postpone the awarding of the contract until the Tribunal determines the validity of the complaint.
30.13(4) Idem
(4) The Tribunal shall rescind an order made under subsection (3) if, within the prescribed period after the order is made, the government institution certifies in writing that the procurement of the goods or services to which the designated contract relates is urgent or that a delay in awarding the contract would be contrary to the public interest.
[...]
30.15(2) Remedies
(2) Subject to the regulations, where the Tribunal determines that a complaint is valid, it may recommend such remedy as it considers appropriate, including any one or more of the following remedies:
(a) that a new solicitation for the designated contract be issued;
(b) that the bids be re-evaluated;
(c) that the designated contract be terminated;
(d) that the designated contract be awarded to the complainant; or
(e) that the complainant be compensated by an amount specified by the Tribunal.
30.15(3) Criteria to be applied
(3) The Tribunal shall, in recommending an appropriate remedy under subsection (2), consider all the circumstances relevant to the procurement of the goods or services to which the designated contract relates, including
(a) the seriousness of any deficiency in the procurement process found by the Tribunal;
(b) the degree to which the complainant and all other interested parties were prejudiced;
(c) the degree to which the integrity and efficiency of the competitive procurement system was prejudiced;
(d) whether the parties acted in good faith; and
(e) the extent to which the contract was performed.
[...]
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Définitions
30.1 Les définitions qui suivent s'appliquent au présent article et aux articles 30.11 à 30.19.
30.1 « _contrat spécifique_ » "designated contract"
« _contrat spécifique_ » Contrat relatif à un marché de fournitures ou services qui a été accordé par une institution fédérale - ou pourrait l'être -, et qui soit est précisé par règlement, soit fait partie d'une catégorie réglementaire.
30.1 « _fournisseur potentiel_ » "potential supplier"
« _fournisseur potentiel_ » Sous réserve des règlements pris en vertu de l'alinéa 40f.1), tout soumissionnaire - même potentiel - d'un contrat spécifique.
30.1 « _institution fédérale_ » "government institution"
« _institution fédérale_ » Ministère ou département d'État fédéral, ainsi que tout autre organisme, désigné par règlement.
30.1 « _intéressée_ » "interested party"
« _intéressée_ » S'appliquant à « _partie_ » , le terme vise tout fournisseur potentiel ou toute personne ayant un intérêt économique direct dans l'affaire en cause dans une plainte.
30.1 « _plainte_ » "complaint"
« _plainte_ » Plainte déposée auprès du Tribunal en vertu du paragraphe 30.11(1).
[...]
30.11(1) Dépôt des plaintes
30.11 (1) Tout fournisseur potentiel peut, sous réserve des règlements, déposer une plainte auprès du Tribunal concernant la procédure des marchés publics suivie relativement à un contrat spécifique et lui demander d'enquêter sur cette plainte.
30.11(2) Forme et teneur
(2) Pour être conforme, la plainte doit remplir les conditions suivantes_:
a) être formulée par écrit;
b) préciser le contrat spécifique visé, le nom du plaignant et celui de l'institution fédérale chargée de l'adjudication du contrat;
c) exposer de façon claire et détaillée ses motifs et les faits à l'appui;
d) préciser la nature de la réparation demandée;
e) préciser l'adresse du plaignant où peuvent être envoyées les notifications et autres communications relatives à la plainte;
f) fournir tous les renseignements et documents pertinents que le plaignant a en sa possession;
g) fournir tous renseignements et documents supplémentaires exigés par les règles;
h) comporter le paiement des droits réglementaires.
30.11(3) Désignation de membre
(3) Le président peut désigner un membre du Tribunal pour l'instruction de la plainte. Celui-ci exerce dès lors les pouvoirs et fonctions du Tribunal.
[...]
30.13(3) Report de l'adjudication
(3) Le cas échéant, le Tribunal peut ordonner à l'institution fédérale de différer l'adjudication du contrat spécifique en cause jusqu'à ce qu'il se soit prononcé sur la validité de la plainte.
30.13(4) Annulation
(4) Il doit toutefois annuler l'ordonnance dans le cas où, avant l'expiration du délai réglementaire suivant la date où elle est rendue, l'institution fédérale certifie par écrit que l'acquisition de fournitures ou services qui fait l'objet du contrat spécifique est urgente ou qu'un retard pourrait être contraire à l'intérêt public.
[...]
30.15(2)Mesures correctives
(2) Sous réserve des règlements, le Tribunal peut, lorsqu'il donne gain de cause au plaignant, recommander que soient prises des mesures correctives, notamment les suivantes_:
a) un nouvel appel d'offres;
b) la réévaluation des soumissions présentées;
c) la résiliation du contrat spécifique;
d) l'attribution du contrat spécifique au plaignant;
e) le versement d'une indemnité, dont il précise le montant, au plaignant.
30.15(3) Critères
(3) Dans sa décision, le Tribunal tient compte de tous les facteurs qui interviennent dans le marché de fournitures ou services visé par le contrat spécifique, notamment des suivants_:
a) la gravité des irrégularités qu'il a constatées dans la procédure des marchés publics;
b) l'ampleur du préjudice causé au plaignant ou à tout autre intéressé;
c) l'ampleur du préjudice causé à l'intégrité ou à l'efficacité du mécanisme d'adjudication;
d) la bonne foi des parties;
e) le degré d'exécution du contrat.
30.15(4) Indemnité
(4) Le Tribunal peut, sous réserve des règlements, accorder au plaignant le remboursement des frais entraînés par la préparation d'une réponse à l'appel d'offres.
[...]
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[18] The following are the relevant excerpts from the Canadian International Trade Tribunal Procurement Inquiry Regulations, SOR/93-602 ("CITT Procurement Inquiry Regulations"):
| 3. (1) For the purposes of the definition "designated contract" in section 30.1 of the Act, any contract or class of contract concerning a procurement of goods or services or any combination of goods or services, as described in Article 1001 of NAFTA, in Article 502 of the Agreement on Internal Trade, in Article I of the Agreement on Government Procurement or in Article 1 of the Canada - Korea Agreement on the Procurement of Telecommunications Equipment, by a government institution, is a designated contract.
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TIME LIMITS FOR FILING A COMPLAINT
6. (1) Subject to subsections (2) and (3), a potential supplier who files a complaint with the Tribunal in accordance with section 30.11 of the Act shall do so not later than 10 working days after the day on which the basis of the complaint became known or reasonably should have become known to the potential supplier.
6(2)
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CONDITIONS FOR INQUIRY
7. (1) The Tribunal shall, within five working days after the day on which a complaint is filed, determine whether the following conditions are met in respect of the complaint:
(a) the complainant is a potential supplier;
(b) the complaint is in respect of a designated contract; and
(c) the information provided by the complainant, and any other information examined by the Tribunal in respect of the complaint, discloses a reasonable indication that the procurement has not been carried out in accordance with whichever of Chapter Ten of NAFTA, Chapter Five of the Agreement on Internal Trade, the Agreement on Government Procurement or the Canada - Korea Agreement on the Procurement of Telecommunications Equipment applies.
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3. (1) Pour l'application de la définition de « _contrat spécifique_ » à l'article 30.1 de la Loi, est un contrat spécifique tout contrat ou catégorie de contrats relatif au marché passé par une institution fédérale pour des produits ou des services, ou pour toute combinaison de ceux-ci, visé à l'article 1001 de l'ALÉNA, à l'article 502 de l'Accord sur le commerce intérieur, à l'article premier de l'Accord sur les marchés publics ou à l'article premier de l'Accord Canada - Corée sur les marchés d'équipements de télécommunications.
[...]
DÉLAIS DE DÉPÔT DE LA PLAINTE
6. (1) Sous réserve des paragraphes (2) et (3), le fournisseur potentiel qui dépose une plainte auprès du Tribunal en vertu de l'article 30.11 de la Loi doit le faire dans les 10 jours ouvrables suivant la date où il a découvert ou aurait dû vraisemblablement découvrir les faits à l'origine de la plainte.
[...]
CONDITIONS DE L'ENQUÊTE
7. (1) Dans les cinq jours ouvrables suivant la date du dépôt d'une plainte, le Tribunal détermine si les conditions suivantes sont remplies :
a) le plaignant est un fournisseur potentiel;
b) la plainte porte sur un contrat spécifique;
c) les renseignements fournis par le plaignant et les autres renseignements examinés par le Tribunal relativement à la plainte démontrent, dans une mesure raisonnable, que le marché public n'a pas été passé conformément au chapitre 10 de l'ALÉNA, au chapitre cinq de l'Accord sur le commerce intérieur, à l'Accord sur les marchés publics ou à l'Accord Canada - Corée sur les marchés d'équipements de télécommunications, selon le cas.
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[19] The following are the relevant provisions of the Agreement on Internal Trade ("AIT"):
Article 501: Purpose
Consistent with the principles set out in Article 101(3) (Mutually Agreed Principles) and the statement of their application set out in Article 101(4), the purpose of this Chapter is to establish a framework that will ensure equal access to procurement for all Canadian suppliers in order to contribute to a reduction in purchasing costs and the development of a strong economy in a context of transparency and efficiency.
Article 504: Reciprocal Non-Discrimination
[...]
2. With respect to the Federal Government, paragraph 1 means that, subject to Article 404 (Legitimate Objectives), it shall not discriminate:
a. between the goods or services of a particular Province or region, including those goods and services included in construction contracts, and those of any other Province or region; or
b. between the suppliers of such goods or services of a particular Province or region.
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Article 506: Procedures for Procurement
1. Each Party shall ensure that procurement covered by this Chapter is conducted in accordance with the procedures set out in this Article.
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Article 518: Definitions
In this Chapter:
[...]
Canadian supplier
means a supplier that has a place of business in Canada;
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place of business
means an establishment where a supplier conducts activities on a permanent basis that is clearly identified by name and accessible during normal working hours;
THE ISSUES
[20] The issues raised in these two motions are as follows:
1. should the Agusta application for judicial review be struck out because there is an adequate alternative statutory remedy which so clearly applies that it renders the Agusta judicial review application bereft of any chance of success. This issue raises the following two sub-issues:
a) does the Tribunal have jurisdiction to inquire into a complaint by Agusta;
b) is Agusta a "Canadian supplier" under the AIT; and
2. has Agusta satisfied the four criteria upon which the Court will grant an extension of time, in this case for 10 days, to enable filing this application for judicial review.
THE POSITION OF THE PARTIES ABOUT THE JURISDICTION OF THE TRIBUNAL
TO REVIEW THIS PROCUREMENT PROCESS
Public Works
[21] Public Works submits that the applicant had an alternative adequate remedy in the Tribunal procurement review process under section 30.11(c) of the CITT Act. However, on questioning by the Court, counsel for Public Works would not confirm the position of Public Works on whether the Tribunal has jurisdiction to inquire into a complaint by Agusta about this procurement. Similarly, counsel for Public Works had no instructions to confirm or deny the evidence of Agusta that a Public Works official and a senior consultant had stated that Public Works would object to the jurisdiction of the Tribunal to inquire into this procurement process because Agusta was not a "Canadian supplier". (Agusta submits that Public Works is abusing the process of the Court by moving to strike out this application for judicial review on the basis that the Tribunal is an adequate alternative statutory remedy to review this procurement, while saying that it will object to the Tribunal's jurisdiction to review this procurement because Agusta is not a "Canadian supplier".)
Agusta
[22] Agusta submits that it had a reasonable basis to conclude that the Tribunal would deny jurisdiction to inquire into a complaint by Agusta about this procurement. The reasonable basis is as follows:
1. Agusta is no longer a "Canadian supplier" because it has not registered as a Canadian supplier under the Controlled Goods Regulations, SOR/2001-32, as amended, and because it has stopped operating a subsidiary in Canada;
2. there is no interprovincial aspect to the complaint, as required under the AIT;
3. in 2000 the Tribunal itself questioned the jurisdiction of the Tribunal to review this procurement because Agusta is not a "Canadian supplier";
4. the Tribunal has already ruled that it does not have the jurisdiction to inquire into whether the lowest complaint bid requirement of this procurement breaches the governments's general policy to seek "best value" proposals.
[23] Agusta also submits that the Tribunal procurement review procedure is not an adequate alternative remedy to review this procurement because the Tribunal's remedies are limited, and could not fulfill the needs of Agusta in bringing this complex case.
Sikorsky
[24] Sikorsky states that the Tribunal has jurisdiction to review this procurement, that Agusta is a Canadian supplier, that the AIT provisions on procurement procedures can be breached without the need for an interprovincial basis for the complaint, and that the Federal Court of Appeal has held that the Tribunal's jurisdiction includes broad aspects of the complaint such as bias and unfairness. Accordingly, the Tribunal's procurement review process is an adequate alternative remedy and this application should be struck.
THE POSITION OF THE PARTIES ABOUT TIMELINESS AND AN EXTENSION
OF TIME
Agusta
[25] Agusta submits that it is challenging the course of conduct of the Minister as a whole, rather than a single decision. It submits that no deadline is currently applicable to this procurement process because it is still ongoing. Agusta cites Krause v. Canada, (1999) 236 N.R., [1999] 2 F.C. 476, and Hamilton-Wentworth (Regional Municipality) v. Canada (Minister of the Environment), (2001) 213 F.T.R. 57, 2001 FCA 347, to support the argument that the Court has jurisdiction to restrain a pending step in a process alleged to be unlawful even where it is based on a decision that was reached more than 30 days earlier.
[26] In the alternative, Agusta submits that if July 23, 2004 is considered to be the date of the challenged decision, an extension of time should be granted because Agusta did not know and could not have known that there were grounds to challenge the decision until August 23, 2004, when it received detailed information about the evaluation process.
[27] The grounds Agusta says it discovered on August 23, 2004 are as follows:
1. the "fairness monitor" responsible for ensuring that the evaluation of the bids was fair is a friend of the Public Works evaluators, and a former lobbyist for a subcontractor of the winning bidder. This allegedly raises a reasonable apprehension of bias;
2. the winning proposal was missing 100 pages from its hard copy, breaching a mandatory requirement of the RFP in a manner that Agusta alleges should have disqualified it. Agusta alleges that the name of the bidder whose 100 pages were missing was blanked out in one copy of the information they received, but inadvertently left in the fairness monitor's report which it received on August 23, 2004; and
3. the documents contained internal policies and procedures that re-structured the evaluation process presented to the public in the RFP on December 17, 2003, and revealed it to be subject to direct interference by the Minister.
[28] Agusta alleges that the Minister had this information as of July 23, 2004, and deliberately withheld it until 31 days after the decision.
[29] Agusta submits that it meets the test from Grewal v. Canada (Minister of Employment and Immigration), (1985) 63 N.R. 106, for an extension of time. The Grewal test has four components:
1. the application has some merit;
2. there is a reasonable explanation for the delay;
3. there is a continuing intention to bring the application; and
4. there is no prejudice to the respondent in permitting the extension.
[30] Agusta states that its application has merit because it raises serious allegations against Public Works. Agusta submits that its case raises issues of public concern considering a large investment of taxpayer dollars.
[31] The alleged suppression of the grounds for judicial review constitute the explanation for the delay. Agusta submits that the grounds for the application were unknown and unknowable to Agusta before August 23, 2004. Before then there was no reason to bring a judicial review application "just in case."
[32] Agusta submits that the "continuing intention" requirement is not restricted to an intention to bring a judicial review application, but simply an intention to challenge the decision. Agusta was planning to bring an action for damages, which it could not bring until the contract was awarded, but decided on a judicial review application when grounds were revealed.
[33] Agusta submits that the respondents would not be prejudiced by a 10 day extension.
Sikorsky
[34] Sikorsky submits that Agusta seeks to have two separate decisions of the Minister reviewed, and that both are out of time. The first decision is the structuring of the procurement and evaluation process, as released in the form of the RFP to the pre-qualified bidders on December 17, 2003. The second decision is the decision on July 23, 2004 to award the contract to Sikorsky.
[35] Sikorsky submits that the additional information Agusta wanted about the bid process consisted of reasons for the decision, and that it received them orally in meetings on July 26 and 27, 2004, and in evaluation material released to them on July 29, 2004. Sikorsky acknowledges that Agusta had questions to which it did not receive answers until the delivery of the August 23, 2004, but it submits that this was a timely response.
[36] Sikorsky submits that the only issue is whether an extension of time should be granted for a challenge of either decision. It submits that Agusta fails all four branches of the Grewal test for the first decision. With regard to the merits of the application, Sikorsky submits that Public Works is free to structure the bid as it wishes, according to the AIT, and Agusta has provided no evidence that demonstrates a reasonable apprehension of bias. Sikorsky submits that there is no reasonable explanation provided for why Agusta did not challenge the structuring of the procurement process as announced on December 17, 2003, the stage at which the Federal Court of Appeal suggested it do so in E.H. Industries, supra. It cites Au v. Canada (Minister of Citizenship and Immigration), (2001) 202 F.T.R. 57, 2001 FCT 243, and Zundel v. Canada (Human Rights Commission), (1999) 164 F.T.R. 250, [1999] 3 F.C. 58 to support that argument that any allegation of bias must be raised at the first opportunity. Sikorsky cites Agusta's intentions to bring an action as proof that there was no continuing intention to bring an application for judicial review. With regard to prejudice, Sikorsky submits that the process which Agusta should have challenged at the beginning of the year has now been carried out, Sikorsky has incurred significant effort and expense that it would have to repeat if the process was re-started, it has won the process, and in procurement matters time is of the essence.
[37] Concerning the second decision, Sikorsky submits again that Agusta fails all four branches of the Grewal test. Sikorsky reiterates that a challenge of this decision would have no merit for the same reasons listed above; it alleges that there is no reasonable explanation for why Agusta challenged the decision 40 days after it was made instead of 30 days; it cites the correspondence of Agusta lobbyist Gabriele Galleazzi, in particular the statement in his August 9, 2004 letter that Agusta does "not want to debate the evaluation", as evidence that there was no continuing intention; and states that Agusta's attempt to commence proceedings outside a statutory time limit disrupts the commercial certainty that is supposed to be part of the bidding process in a way that prejudices both Public Works and Sikorsky.
Public Works
[38] The submissions of Public Works follow largely the same lines as those of Sikorsky, with particular emphasis on the jurisprudence suggesting that a would-be complainant cannot use "waiting for the reasons" for a decision as an excuse for not challenging it in a timely manner. Public Works cites Skycharter Ltd. v. Canada (Minister of Transport), (1997) 125 F.T.R. 307, and Westinghouse Canada Inc. v. Canada (Canadian International Trade Tribunal), (1989) 104 N.R. 191, to support this proposition. Public Works also argues that Agusta's application is bereft of all chance of success as required by the test in Pharmacia Inc. v. David Bull Laboratories (Canada) Inc., (1994) 182 N.R. 158, and is not supported by any evidence. It also argues that Agusta's application does not meet the "continuing intention" branch of the Grewal test, since there was no intention to bring a judicial review until August 23, 2004, 31 days after the impugned decision.
ANALYSIS
Issue No. 1
Should the Agusta application for judicial review be struck out because there is an adequate alternative statutory remedy which so clearly applies that it renders the Agusta judicial review application bereft of any chance of success
Adequate alternative remedy
[39] The issue of whether there is an adequate alternate remedy in this case is determined by reference to a test discussed by Justice Lemieux in Telus Integrated Communications v. Canada (Attorney General), (2000) 192 F.T.R. 248, [2000] F.C.J. No. 1263 (Q.L.) at para. 41:
[...] the issue is whether the adequate alternative remedy doctrine so clearly applies as to render the Telus judicial review application bereft of any chance of success.
[40] Telus uses a two-part test which combines the adequate alternate remedy test from the Supreme Court of Canada in Harelkin v. University of Regina, (1979) 96 D.L.R. (3d) 14 and 18, and C.P. Limited v. Matsqui Indian Band et al., (1995) 122 D.L.R. (4th) 129, with the test from the Federal Court of Appeal in David Bull, supra, for striking out a judicial review application.
[41] The adequate alternate remedy doctrine is that the Federal Court, in exercising its discretion on applications for judicial review under section 18.1 of the Federal Courts Act, should not exercise its jurisdiction if there is and adequate alternate remedy provided by Parliament. The Supreme Court held that this adequate alternate remedy doctrine applies even to questions as to the jurisdiction of the alternative statutory appeal authority. See C.P. Limited, supra, per Lamer C.J.C. (as he then was) at paragraphs 31 to 33, 36 and 37.
[42] In Harelkin, supra, the factors were set out at p. 51 as follows:
...the procedure on the appeal, the composition of the senate committee, its powers and the manner in which they were probably to be exercised by a body which was not a professional court of appeal and was not bound to act exactly as one nor likely to do so. Other relevant factors include the burden of a previous finding, expeditiousness and costs.
[43] In C.P. Limited, Lamer C.J. listed additional factors at p. 145:
These factors include: the convenience of the alternative remedy, the nature of the error, the nature of the appellate body, (i.e. its investigatory, decision-making and remedial capacities). I do not believe that the category of factors should be closed, as it is for the courts, in particular circumstances, to isolate and balance the factors which are relevant.
[44] Accordingly, the factors to be considered under the adequate alternate remedy test are:
1. the powers and nature of the alternate body;
2. the nature of the error;
3. the convenience of the alternate remedy;
4. the legal framework out of which the matter arises;
5. the burden of a previous finding;
6. expeditiousness; and
7. costs.
[45] In Anderson v. Canada, (1996) 141 D.L.R. (4th) 54, [1997] 1 F.C. 273, Stone J.A. added another factor to the test. He stated at para 6: "In order to assess the adequacy of the alternative remedy in the light of the circumstances, one must take account of the legal framework out of which this matter emerges."
[46] In this case, the first factor to consider is whether the Tribunal has jurisdiction to consider this complaint. If it does not, then there is no adequate alternate remedy and the motion to strike cannot succeed.
Jurisdiction of the Tribunal
[47] Parliament has provided the Tribunal with the jurisdiction to conduct an "inquiry" into a complaint that concerns "a designated contract" proposed to be awarded by a government institution. The complaint, subject to the Regulations, can be filed by a "potential supplier" concerning "any aspect of the procurement process". (See sections 30.11(1) and the definitions contained in section 30.1.)
[48] The CITT Procurement Inquiry Regulations provides that a "designated contract" is any contract concerning a procurement of goods or services as described in Article 502 of the AIT. (See section 3(1) of these Regulations). Under Article 502 of the AIT, the proposed contract for the procurement of the helicopters is a "designated contract".
[49] Subsection 7(1)(c) of the Regulations provide that the Tribunal shall, within five working days after the day on which the complaint is filed, determine whether three conditions are met, including whether the complaint "discloses a reasonable indication that the procurement has not been carried out in accordance with ... Chapter Five of the Agreement on Internal Trade ...".
[50] Article 501 of the AIT sets out the purpose of Chapter 5, which is to:
Establish a framework that will ensure equal access to procurement for all Canadian suppliers in order to contribute to a reduction in purchasing costs and the development of a strong economy in the context of transparency and efficiency.
The provisions of Article 506, which lay out the procurement procedures required under the AIT, refer directly to "Canadian suppliers". Article 518 of AIT defines "Canadian supplier" as:
... a supplier that has a place of business in Canada.
and defines "place of business" as:
An establishment where a supplier conducts activities on a permanent basis that is clearly identified by name accessible during normal working hours.
[51] Accordingly, the Tribunal's procurement review process in this case would only apply to Agusta if it meets the definition of a "Canadian supplier". The Tribunal issued a decision in Re Winchester Division - Olin Corp., CITT File No. PR-2003-064, [2004] C.I.T.T. No. 44 (QL), with respect to whether a U.S. subsidiary in Canada was a "Canadian supplier" as defined by the AIT. The Tribunal held that the AIT is a domestic agreement and a foreign supplier cannot be extended any rights under the AIT. To have standing under the AIT, the complainant must be a "Canadian supplier" as defined in Article 518 of the AIT. The Tribunal found that Olin was a Canadian supplier because it had a subsidiary in Canada which carried on business in Canada. The Tribunal held that a non-Canadian supplier cannot file a procurement complaint under the AIT. The Tribunal held at paragraphs 35 and 36:
¶ 35 Before deciding the merits of the complaint, the Tribunal must first establish that Olin had standing, under the trade agreements, to file the complaint. The AIT is a domestic agreement between Canada's federal government and its provincial and territorial governments. In the case of international agreements, a third country, not party to an agreement, cannot take the benefit or be obliged to accept the burden of the agreement without its consent. [Emphasis added][See Note 9 below]
Note 9: Vienna Convention on the Law of Treaties (1969), 8 International Legal Materials, Art. 34.
¶ 36 Since the United States is not a party to the AIT, a U.S. supplier cannot be extended any rights under the AIT. To have standing under the AIT, a complainant must be a "Canadian supplier", as defined in Article 518 of the AIT [emphasis added], which defines "Canadian supplier" as a "supplier that has a place of business in Canada" and "place of business" as "an establishment where a supplier conducts activities on a permanent basis that is clearly identified by name and accessible during normal working hours ...".
[52] The Court does not at this time have sufficient facts on which to decide whether Agusta meets the definition of a "Canadian supplier" for the purpose of the AIT. Agusta should present the relevant factual underpinning to the Tribunal as part of a complaint.
[53] Based upon the jurisprudence, and the facts before the Court, the Court cannot determine whether the adequate alternative remedy doctrine so clearly applies as to render the Agusta judicial review application bereft of any chance of success.
[54] The applicant has raised a number of other reasons why the Tribunal procurement review process would not be an adequate alternative remedy. I do not agree with these other reasons, namely that there must be an interprovincial aspect to the complaint under the AIT, and that the procurement review process conducted by the Tribunal does not apply to the common law duty of fairness in the federal procurement contract process or to the law of bias. The Federal Court of Appeal has held in Cougar Aviation Ltd. v. Canada (Minister of Public Works and Government Services), (2000) 264 N.R. 49, that the Tribunal's procurement review jurisdiction includes the duty of fairness, impartiality and right of an unsuccessful bidder to raise an allegation of a reasonable apprehension of bias. Evans J.A. stated at paragraphs 23 and 24:
¶ 23 In my opinion, the various obligations imposed on the parties by the relevant Articles of the Agreement should be interpreted, to the extent that their language permits, in a manner consistent with the common law duty of fairness as it applies to the federal procurement contract process. In the context of administrative procedure, "impartiality" normally includes the appearance of impartiality.
¶ 24 Furthermore, it would unduly fragment a challenge to an award of a contract if an unsuccessful bidder were required to raise an allegation of a reasonable apprehension of bias, not in the Tribunal which might be the appropriate forum for other aspects of a complaint, but on an application for judicial review in the Federal Court, Trial Division. Given the technical nature of the tendering process, and the legislative regime within which it is conducted, it would seem inconsistent with the statutory scheme to interpret the Tribunal's jurisdiction this narrowly.
[55] I am also satisfied that the Tribunal has broad powers including:
1. the power to conduct an inquiry into the complaint, which inquiry may include a hearing, per section 30.13(1) of the CITT Act;
2. the power to recommend remedies including that the bids be re-evaluated or that the designated contract be terminated, per section 30.15 of the CITT Act; and
3. the power to order the government institution to postpone the awarding of the contract until the Tribunal determines the validity of the complaint, per section 30.13(3) of the CITT Act.
Accordingly, Parliament has provided an adequate alternative remedy for Agusta's complaint with respect to this procurement process if the Tribunal finds that Agusta meets the definition of a "Canadian supplier" for the purposes of the AIT. Under section 7(1) of the CITT Procurement Inquiry Regulations the Tribunal shall within five working days after the complaint is filed, make this determination.
Issue No. 2
Has Agusta satisfied the four criteria upon which the Court will grant an extension of time, in this case for 10 days, to enable filing this application for judicial review
[56] As indicated at the hearing, the issue of whether the procurement process constitutes a course of conduct for the purpose of judicial review is a matter properly left to the Judge hearing the application for judicial review. Accordingly, I will only consider the timeliness of this application in relation to the July 23, 2004 decision.
[57] The application for judicial review was filed on September 1, 2004. Accordingly, it was filed 10 days after the 30 day deadline set out in s. 18.1(2) of the Federal Courts Act, and requires an extension of time.
[58] The Court will grant an extension of time in certain circumstances. The Grewal test, as I recently applied it in Saskatchewan Wheat Pool v. Canada (Canadian Grain Commission), 2004 FC 1307, has four criteria or parts, which I repeat for ease of reference:
1. is granting an extension necessary to do justice between the parties;
2. does the applicant have an arguable case for setting aside the impugned decision;
3. is there a proper justification for the delay, taking into account factors such as the intention to file an application within the allowed time and that the intention was maintained continuously thereafter; and
4. will an opposing party suffer prejudice from the grant of an extension.
[59] With respect to the first part of the test, I am satisfied that the applicant's allegations of bad faith in the award of a major contract warrant a proper hearing. This procurement involves the expenditure of billions of dollars, and a 10 day extension of time is necessary "to do justice" between the parties in this case.
[60] With respect to the second part of the test, the applicant has raised an arguable case for setting aside the July 23, 2004 decision to award the contract to Sikorsky. The applicant alleges that the contract was awarded to Sikorsky in bad faith. In particular, the evaluation process was biased so that the applicant's bid was rejected. These serious allegations may prove unfounded, but at this stage they do raise an arguable case.
[61] With respect to the third part of the test, I am satisfied that there is justification for the 10 day delay. After the July 23 decision, Agusta requested from Public Works information on which the decision was based. Public Works asked Agusta to submit these questions in writing, and this was done on July 31. Agusta wrote again on August 9 asking that the answers to these questions be forthcoming. The requested information from Public Works was only received on August 23, 31 days after the decision. Following the receipt of this information, Agusta filed this application for judicial review 9 days later. I am satisfied from the evidence that Agusta, at all times, demonstrated a continuing intent to challenge this procurement and the 10 day delay is reasonably explained by the failure of Public Works to provide answers in a timely fashion. The information allegedly provides the grounds upon which the July 23, 2004 decision to cancel the contract can be impugned and set aside. This Court has repeatedly granted extensions of time where a party demonstrates a reason for the delay. In many cases, the delay is much longer than 10 days.
[62] The information sought from Public works does not constitute "reasons", as the term is used in the jurisprudence. If Agusta had commenced this application before August 23, it might not have received the information from Public Works.
[63] Moreover, the evidence is that Agusta always intended to challenge this procurement. Agusta commenced the legal challenge to this procurement process four years ago and was told by the Court that it was premature. There can be no doubt that all parties knew that Agusta intended to legally challenge this procurement should any grounds to do so arise.
[64] With respect to the fourth part of the test, there is no prejudice from the grant of a 10 day extension to any of the parties. This procurement has taken many years, at least as far back as 1992 when the Government originally decided to purchase these helicopters. Adding 10 days to the process will not prejudice any of the parties.
[65] For these reasons, and upon considering the extensive jurisprudence of this Court where such extensions of time are normally granted when the parties can provide a reasonable explanation for the delay, the Court will grant the extension requested.
REASONABLE BASIS FOR AGUSTA CONCLUDING THAT THE TRIBUNAL PROCUREMENT REVIEW PROCESS WAS NOT AN ADEQUATE ALTERNATIVE REMEDY
[66] Public Works told Agusta that it would object to the Tribunal's jurisdiction to review this procurement on the basis that Agusta was not a "Canadian supplier". In 2000, the Tribunal had questioned its jurisdiction to review a complaint filed by Agusta because it was a foreign supplier.
[67] Since 2000, Agusta says that it decided not to register with Public Works as a "Canadian supplier" under the Public Works Controlled Goods Regulations, and it stopped operating in Canada as a Canadian subsidiary corporation.
[68] At this hearing before the Court, Public Works submitted that the Tribunal procurement review process was an adequate alternative remedy, yet would not make a commitment not to object to the jurisdiction of the Tribunal in this regard. For all of these reasons, the Court is satisfied that Agusta had a reasonable basis for not filing the complaint with the Tribunal until this time.
THE TRIBUNAL IS THE APPROPRIATE FORUM
[69] The Tribunal is the expert body mandated by Parliament to conduct an inquiry into a complaint with respect to a procurement process. Agusta originally filed its complaint with respect to this procurement process before the Tribunal, presumably for this reason. Public Works and Sikorsky have submitted to the Court that the Tribunal is the appropriate body to review this procurement (subject to the puzzling position of Public Works that it cannot advise the Court whether it would, or would not object, to the Tribunal jurisdiction). Accordingly, all three parties, and the Court, agree that the Tribunal is the appropriate forum to review this procurement if the Tribunal has jurisdiction over Agusta.
DISPOSITION
[70] If the Tribunal can provide an alternative remedy, I would agree with Public Works and Sikorsky that this application for judicial review should not proceed. However, it is not clear whether the Tribunal has jurisdiction.
[71] I have concluded that it is in the interests of justice if Agusta files its complaint with respect to this procurement decision with the Tribunal within 10 working days of this Order. The Tribunal, based on these reasons, can receive the complaint on the basis that the applicant only had a reasonable basis to know that it may be eligible as a "Canadian supplier" to file a complaint with the Tribunal as of the date of this Order and Reasons.
[72] Under section 7 of the CITT Procurement Inquiry Regulations, the Tribunal determines within 5 days of the complaint being filed, whether the applicant fulfills the conditions for an inquiry. If the Tribunal procurement review process is available to the applicant, the Court will stay this application for judicial review. Until this is known, the Court will adjourn this motion to strike sine die. At this point, the parties should assume that the motion for an interlocutory injunction will proceed on November 23, 2004.
COSTS
[73] As indicated at the close of the hearing, the Court will make no Order as to costs until the parties have an opportunity to make further submissions after it is determined if the Tribunal has jurisdiction.
"Michael A. Kelen" _______________________________
JUDGE
Ottawa, Ontario
November 3, 2004
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1605-04
STYLE OF CAUSE: Agustawestland International Limited v.
Minister of Public Works and Government Services
and Sikorsky International Operations, Inc,.
PLACE OF HEARING: Ottawa Ontario
DATE OF HEARING: Tuesday, October 26, 2004
REASONS FOR ORDER: The Honourable Mr. Justice Kelen
DATED: Wednesday, November 3, 2004
APPEARANCES:
Mr. G. Cameron
Ms. M. Gardner
Ms. V. Cherneski APPLICANT
Mr. M. Ciavaglia
Mr. J. Brongers RESPONDENT, Minister of Public Works and Government Services
Ms. B.A. McIsaac, Q. C.
Mr. R. B. Mills
Ms. V. Gruben RESPONDENT, Sikorsky International Operations, Inc.,
SOLICITORS OF RECORD:
Blake Cassels & Graydon, LLP
Ottawa Ontario APPLICANT
Morris Rosenberg,
Deputy Attorney
General of Canada RESPONDENT, Minister of Public Works & Government Services
McCarthy Tetrault
Ottawa Ontario RESPONDENT, Sikorsky International Operations, Inc.
FEDERAL COURT
Date: 20041103
Docket: T-1605-04
BETWEEN:
AGUSTAWESTLAND INTERNATIONAL LIMITED
Applicant
and
MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES AND SIKORSKY INTERNATIONAL OPERATIONS, INC.
Respondents
REASONS FOR ORDER
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