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CONTRACTS WITH CROWN - Termination of contract - Appeals and judicial review

Wednesday, September 06, 2017 @ 8:53 AM  

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Application by Francis H.V.A.C. Services Ltd. (Francis) for judicial review of a decision of the Canadian International Trade Tribunal (CITT) determining that its complaint regarding the procurement process followed by the respondent Minister of Public Works and Government Services Canada (PWGSC) was not valid. PWGSC issued a Request for Proposal (RFP) for the provision of maintenance services in respect of heating, ventilation, air conditioning (HVAC), commercial refrigeration and boiler equipment at the Department of National Defence's Connaught Range location in Ottawa, Ontario. Francis responded to the RFP and was later informed it was the successful bidder. Less than a week later, PWGSC sought to terminate the contract with Francis by mutual consent on the grounds that Francis was not the lowest bidder. The respondent Modern Niagara Ottawa (MNO) was the lowest bidder, but it had initially been found non-compliant. Francis filed a complaint with the CITT alleging that the contract awarded to it was improperly cancelled and then awarded to another bidder after bid repair and without an intervening solicitation. The CITT found that MNO had the necessary security clearance to meet the terms of the RFP at the time of bid closing. Francis sought judicial review of the CITT’s decision on the grounds that it erred in finding that MNO had the necessary security clearance to meet the terms of the RFP and in finding that the PWGSC did not offend the rule against bid repair when it corrected MNO’s calculation errors and verified MNO’s security status after the bid closing date.

HELD: Application dismissed. MNO did not submit any new information after the bid closing date. Instead, it was PWGSC that corrected MNO’s mathematical errors on its own initiative. PWGSC did not use any information that was not already included in the bid. PWGSC was entitled to correct any mathematical error on its own and enter into a contract based on MNO’s unit prices. PWGSC did not invite MNO to engage in bid repair or come up with a revised bid based on new information or a modification of the initial proposal. PWGSC mistakenly disqualified MNO based on its determination that MNO did not have the proper security clearance. Once PWGSC discovered its mistake, MNO emerged as the bidder with the lowest evaluated price. PWGSC had an obligation to rectify its error by cancelling the contract with Francis and issuing a new contract to MNO. MNO did not engage in bid repair when it provided the security clearance confirmation and PWGSC did not go beyond the bid by confirming that information. It was entirely reasonable for the CITT to find that the revisions MNO submitted did not require a signature and they did not constitute a new or full bid.

Francis H.V.A.C. Services Ltd. v. Canada (Public Works and Government Services), [2017] F.C.J. No. 793, Federal Court of Appeal, W.W. Webb, Y. de Montigny and M.J.L. Gleason JJ.A., August 9, 2017. Digest No. TLD-Sept42017006