Date: 20040324
Docket: A-316-03
Citation: 2004 FCA 122
CORAM: RICHARD C.J.
NOËL J.A.
EVANS J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
EDS CANADA LTD.
Respondent
Heard at Ottawa, Ontario, on March 23, 2004.
Judgment delivered at Ottawa, Ontario, on March 24, 2004.
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED IN BY: RICHARD C.J.
NOËL J.A.
Date: 20040324
Docket: A-316-03
Citation: 2004 FCA 122
CORAM: RICHARD C.J.
NOËL J.A.
EVANS J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
EDS CANADA LTD.
Respondent
REASONS FOR JUDGMENT
EVANS J.A.
[1] In a decision dated July 30, 2003, the Canadian International Trade Tribunal dismissed a complaint by EDS Canada Ltd. that the evaluation of bids for a government contract had been improper. The question to be decided in this application for judicial review is whether the Tribunal unlawfully exercised its discretion when it refused to award the Crown its costs in respect of the complaint.
[2] The Tribunal explained its refusal to award costs as follows:
... while not flawed in a legal sense, the design of the RFP could have been significantly clearer in providing bidders with the expectations of PWGS and DND as to how the experience and qualifications of proposed resources were to be presented. Since PWGSC and DND are the authors of the RFP, they must bear their own costs in defending against this complaint. As such, the Tribunal will award no costs in respect of the complaint.
[3] For those unfamiliar with federal bureaucratic acronyms, the following glossary may assist. A RFP is a request for a proposal to bid on a contract. PWGSC is Public Works and Government Services Canada, which is responsible for the procurement process for the supply of goods and services for the Government of Canada. DND is the Department of National Defence, which required the goods and services that were the subject to the RFP in question in this case.
[4] The Tribunal's power to award costs is contained in the Canadian International Trade Tribunal Act, R.S. 1985, c. 47 (4th Supp.):
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30.16 (1) Subject to the regulations, the Tribunal may award costs of, and incidental to, any proceedings before it in relation to a complaint on a final or interim basis and the costs may be fixed at a sum certain or may be taxed.
(2) Subject to the regulations, the Tribunal may direct by whom and to whom any costs are to be paid and by whom they are to be taxed and allowed.
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30.16 (1) Les frais relatifs à l'enquête - même provisionnels - sont, sous réserve des règlements, laissés à l'appréciation du Tribunal et peuvent être fixés ou taxés.
(2) Le Tribunal peut, sous réserve des règlements, désigner les créanciers et les débiteurs des frais, ainsi que les responsables de leur taxation ou autorisation.
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[5] This is one of several cases in this Court where the Attorney General argues that the Tribunal has unlawfully denied the Crown its costs on the basis of perceived defects in the procurement process that did not vitiate the procurement, but were trivial in nature and unrelated to either the failure of the complainant's bid or its decision to pursue a complaint before the Tribunal. The decision of this Court in Canada (Attorney General) v. Georgian College of Applied Arts and Technology, [2003] 4 F.C. 525, 2003 FCA 199, is an important part of the background of these cases.
[6] In Georgian College, the Court held that the Tribunal's refusal to award costs to the Crown in that case was an unlawful exercise of its statutory discretion. The Court stated (at paras. 25-28) that the Tribunal's power to award costs is exercisable on essentially the same principles as those governing the award of costs by the courts, including the principle that, in the absence of exceptional circumstances, the successful party is normally awarded its costs. Consequently, the Court held (at para. 37), the Tribunal erred when it refused costs to the Crown pursuant to a general policy of encouraging unsuccessful bidders to complain to the Tribunal about alleged defects in the procurement process.
[7] According to counsel for the Attorney General, the Tribunal has awarded the Crown its costs in 4 out of the 13 cases in which the Crown was successful before the Tribunal since this Court decided Georgian College. On the basis of these statistics and of the general principle, applicable to the Tribunal, that costs follow the event, it would seem that, for reasons that the Tribunal has not made explicit in this case, it is reluctant to award the Crown its costs when a complaint is dismissed.
[8] However, in the absence of an explanation by the Tribunal, it is idle to speculate on the reasons for this apparent reluctance. Counsel for the Attorney General did not press the argument that the refusal of costs in this case was part of a consistent pattern of conduct by the Tribunal. Accordingly, we must consider this case on its own facts, but not forget entirely the broader context. Hence, patent unreasonableness is the standard of review applicable to the Tribunal's exercise of discretion: Georgian College at para. 19.
[9] The RFP issued by PWGSC in this case related to the supply of informatics professional services for the DND. EDS's bid was rejected and the contract was awarded to other bidders. EDS complained to the Tribunal about the evaluation process on three grounds.
[10] First, with respect to the element of the RFP relating to miscellaneous in-service support ("stream 4"), PWGSC erred in disqualifying EDS's bid, and in qualifying the successful bidder's. Second, evaluation errors occurred in respect of the technical server and data base in-service component of the RFP ("stream 2"), with the result that PWGSC erroneously both disqualified EDS's bid and qualified the successful bidder's. Third, unreasonable evaluations were made of the component of the RFP relating to the technical custom application software in-service support ("stream 3"), with the result that EDS's bid was wrongly disqualified and the successful bidder's wrongly qualified.
[11] Since PWGSC had stated that it was assembling a new team to evaluate stream 4, the Tribunal decided not to adjudicate this ground of complaint. The Tribunal dismissed the other two grounds and found the complaint to be invalid since
PWSGC conducted its evaluation in accordance with the requirements of the RFP and did not violate any relevant provisions of the applicable trade agreements.
The Tribunal also noted that EDS had made it difficult for the evaluators to assess the qualifications and experience of its personnel because EDS had not clearly specified the time that they spent on each of the required tasks in each job. EDS has not challenged the Tribunal's decision to dismiss its complaint.
[12] Counsel for the Attorney General submits that the reasons for decision demonstrate that, despite the breadth and generality of the Tribunal's statutory power to award costs, its exercise of discretion to refuse costs to the Crown was patently unreasonable. First, the alleged lack of clarity of the RFP with respect to bidders' presentation of the experience and qualification of proposed resources did not arise from the complaint, nor was there any evidence that it was a factor in EDS's decision to complain. Second, since the Tribunal had concluded that this alleged defect in the RFP was not sufficiently significant to vitiate the evaluations of the bids, it was irrational for the Tribunal to say that it was enough to deny the Crown its costs. Third, even if the re-evaluation of the bids for stream 4 indicated that an error had occurred, the Tribunal did not relate the perceived lack of clarity in the RFP to stream 4.
[13] I broadly agree with these submissions. I would also note that the Tribunal's reasons for denying costs are vague. They do not indicate with any precision the nature of the deficiency in the RFP, nor suggest what the RPF ought to have said so that PWGSC can avoid this perceived problem in the future. Nor, in my opinion, does the fact that PWGSC decided to re-evaluate the stream 4 component of the RFP justify denying the Crown its costs. In any event, the Tribunal's reasons do not rely upon this to justify the decision.
[14] If the Tribunal is going to rely on apparently trivial and immaterial defects in the procurement documents to depart from the general rule that costs follow the event, it is incumbent upon it to spell out with some particularity the nature of the defect and its relevance to the award of costs. In the absence of a substantiated finding that the defects prejudiced the bidder's response to the RFP or induced it to complain, the fact that "PWGSC and DND are the authors of the RFP" provides no rational basis for denying the Crown its costs on the dismissal of the complaint.
[15] Accordingly, despite the very considerable deference owed to the Tribunal's exercise of its discretion, I would allow the application for judicial review with costs, set aside the Tribunal's decision to refuse costs to the Crown, and remit the matter to the Tribunal with the direction that it award the Crown its reasonable costs.
"John M. Evans"
J.A.
"I agree
J. Richard C.J."
"I agree
Marc Noël J.A."
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-316-03
STYLE OF CAUSE: ATTORNEY GENERAL OF CANADA v. EDS CANADA LTD.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: March 23, 2004
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED IN BY: RICHARD C.J.
NOËL J.A.
DATED: MARCH 24, 2004
APPEARANCES:
Ms. Susanne Pereira for the Applicant
Ms. Justine Whitehead for the Respondent
SOLICITORS OF RECORD:
Mr. Morris Rosenberg for the Applicant
Deputy Attorney General of Canada
Stikeman Elliott LLP for the Respondent
Ottawa, Ontario
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