T-944-98
Wang Canada Limited (Applicant)
v.
Minister of Public Works and Government Services (Respondent)
Indexed as: Wang Canada Ltd.v. Canada (Minister of Public Works and Government Services) (T.D.)
Trial Division, McGillis J."Ottawa, September 10 and 28, 1998.
Crown — Contracts — Judicial review of Minister's delegate's decision not in public interest within NAFTA, Art. 1015(4)(c) to award contract — Following inquiry, CITT holding PWGSC not conducting procurement for provision of computer maintenance services to Revenue Canada according to requirements of NAFTA, Agreement on Internal Trade — Recommending PWGSC award contract to Wang, subject to Art. 1015(4)(c) — PWGSC deciding not to award contract to Wang as not in public interest — Issuing new RFP — Under Art. 1015(4)(c) government entity must award contract to supplier whose bid meeting certain criteria, unless deciding in public interest not to award contract — Public interest exception may be invoked by government entity only where decision made not to award contract — Minister's delegate never deciding contract would not be awarded — Not entitled to rely on Art. 1015(4)(c) exception given intention to award contract.
Foreign trade — Judicial review of Minister's delegate's decision not in public interest within NAFTA, Art. 1015(4)(c) to award contract — Following inquiry, CITT holding Department of Public Works and Government Services not conducting procurement for provision of computer maintenance services to Revenue Canada according to requirements of NAFTA, Agreement on Internal Trade — Recommending Department award contract to Wang, subject to Art. 1015(4)(c) — Department deciding not to award contract to Wang as not in public interest — Issuing new RFP — In taking procedural steps to circumvent Tribunal's determination, Minister's delegate acting contrary to purpose, intent of legislative scheme, particularly CITT Act, s. 30.18(1) requiring implementation of Tribunal's recommendations to greatest extent possible — Legislative scheme implementing important trade agreements must be rigorously respected — Delegate erred in law by misinterpreting scope of authority under Art. 1015(4)(c).
Construction of statutes — Under NAFTA, Art. 1015(4)(c) government entity must award contract to supplier whose bid meeting certain criteria, unless deciding in public interest not to award contract — Submission —public interest— ascertained by balancing interest in open, fair procurement process against interest in obtaining goods, services at most efficient, lowest price rejected — —Public interest— in context of Art. 1015(4)(c) permitting Minister to make discretionary, administrative decisions in which may weigh, evaluate broad range of considerations beyond those in dispute between parties with view to determining what is in best interests of Canadian public.
This was an application for judicial review of the respondent's delegate's decision that it was not in the public interest, within the meaning of the North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America (NAFTA), Article 1015(4)(c) to award a contract for computer maintenance services to Wang. The Department of Public Works and Government Services (Department) issued a Request for Proposal and Statement of Work (RFP) for the provision of computer maintenance services to Revenue Canada nationally on an "as and when required" basis. Wang, the incumbent service provider, submitted a bid which did not appear to require it to provide the labour for the removal of failed computer hardware components and the reinstallation of new or repaired ones under the "Component Per Incident" service option in the RFP. All of the other bidders had included that labour as part of the service to be provided. The Department advised Wang that its proposal was non-compliant with the RFP, and that the contract would be awarded "to the company that submitted the highest rated compliant proposal in accordance with the evaluation criteria". Wang filed a complaint with the Canadian International Trade Tribunal. Following its inquiry, the Tribunal determined that the RFP did not require a bidder to include in the Component Per Incident service option the labour costs associated with the removal and installation of a computer component. On the basis that the Department did not conduct the procurement according to the requirements of NAFTA and the Agreement on Internal Trade , the Tribunal recommended that the Department award the contract to Wang, subject to the public interest exception in Article 1015(4)(c) of NAFTA. The Minister's delegate informed the Tribunal that the Department did not intend to award the contract to Wang, on the basis that it was not in the public interest to do so. Wang instituted judicial review proceedings challenging the Department's decision to reissue a RFP in respect of the computer maintenance services required by Revenue Canada. The Department then decided that instead of reissuing the RFP, it would issue a new one which was the same as the previous one, except that the labour required to remove and reinstall computer components was specified as a significant requirement of the Component Per Incident service option. Wang submitted a bid in response to the new RFP.
The issue was whether the Minister acted in bad faith, erred in law or acted upon the basis of irrelevant considerations in deciding that it was not in the public interest to award the contract to Wang.
Held, the application should be allowed and the contract awarded to Wang in accordance with the recommendation of the Tribunal.
Counsel for the applicant submitted that the phrase "public interest" in Article 1015(4)(c) should be ascertained by balancing the interest in having an open and fair procurement process against the interest in allowing the government to obtain its goods and services at the most efficient and lowest price possible. In support of that submission, he noted that NAFTA and the Agreement on Internal Trade contemplate a procurement process that balances the two interests. Those submissions could not be accepted because they unduly narrowed or limited the breadth of the phrase "public interest". The phrase "public interest", in the context of Article 1015(4)(c) of NAFTA, permits the Minister to make a discretionary, administrative decision by weighing and evaluating a broad range of considerations, beyond those in dispute between the parties, with a view to determining what is in the best interests of the Canadian public. Such interpretation is supported by case law and the broad and general Preamble to NAFTA, which provides, among other things, that the parties have resolved to "preserve their flexibility to safeguard the public welfare".
Under the terms of Article 1015(4)(c), a government entity must award a contract to a supplier whose bid meets certain criteria, unless it decides in the public interest not to award the contract. As a result, the public interest exception in Article 1015(4)(c) may only be invoked by a government entity in circumstances where a decision is made not to award the contract. The Minister's delegate never made a decision that Revenue Canada did not require on-site preventative and remedial computer maintenance services nationally on an "as and when required" basis, as called for in the original RFP, or that such a contract would not be awarded. The Minister's delegate was not entitled to rely on the public interest exception because he did not make a decision "not to award the contract", within the meaning of NAFTA, Article 1015(4)(c).
Furthermore, in taking procedural steps to circumvent the determination made by the Tribunal, the Minister's delegate acted contrary to the purpose and intent of the legislative scheme, particularly the statutory requirement in CITT Act, subsection 30.18(1) that a government entity implement the Tribunal's recommendations to the greatest extent possible. The Minister's delegate should have challenged the determination directly by instituting judicial review proceedings. NAFTA and the Agreement on Internal Trade are important trade agreements which impose significant obligations on our government institutions, and the legislative scheme implementing them into Canadian law ought to be rigorously respected.
statutes and regulations judicially considered
Agreement on Internal Trade, Canada Gazette, Part I, Vol. 129, No. 17 (29 April 1995), Art. 506(6).
Agreement on Internal Trade Implementation Act, S.C. 1996, c. 17.
Canadian International Trade Tribunal Act, R.S.C., 1985 (4th Supp.), c. 47, s. 30.11(1) (as enacted by S.C. 1993, c. 44, s. 44), 30.13 (as enacted idem), 30.14 (as enacted idem), 30.15(1) (as enacted idem), (2) (as enacted idem), 30.18(1) (as enacted idem), (2) (as enacted idem).
Canadian International Trade Tribunal Procurement Inquiry Regulations, SOR/93-602 (as am. by SOR/95-300, s. 2), ss. 7 (as am. idem, s. 7; 96-30, s. 5), 11 (as am. by SOR/95-300, s. 9; 96-30, s. 8), 13(a) (as enacted idem, s. 9).
North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America, December 17, 1992, [1994] Can. T.S. No. 2, Art. 1013(1)(g), 1015(4)(c),(d).
North American Free Trade Agreement Implementation Act, S.C. 1993, c. 44.
cases judicially considered
referred to:
Maple Lodge Farms Ltd. v. Government of Canada, [1982] 2 S.C.R. 2; (1982), 137 D.L.R. (3d) 558; 44 N.R. 354; Williams v. Canada (Minister of Citizenship and Immigration), [1997] 2 F.C. 646; (1997), 147 D.L.R. (4th) 93; 212 N.R. 63 (C.A.); Canadian National Railway Co. v. Nakina (Township) (1986), 69 N.R. 124 (F.C.A.); R. v. Morales, [1992] 3 S.C.R. 711; (1992), 77 C.C.C. (3d) 91; 17 C.R. (4th) 74; 12 C.R.R. (2d) 31; 144 N.R. 176; 51 Q.A.C. 161; R. v. Zundel, [1992] 2 S.C.R. 731; (1992), 95 D.L.R. (4th) 202; 75 C.C.C. (3d) 449; 16 C.R. (4th) 1; 140 N.R. 1; 56 O.A.C. 161.
APPLICATION for judicial review of Minister of Public Works and Government Services delegate's decision that it was not in the public interest, within the meaning of the North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America to award a contract for computer maintenance services to Wang (Wang Canada Ltd. (Re), [1998] C.I.T.T. No. 17 (QL)). Application allowed.
appearances:
Gordon K. Cameron and Nancy K. Brooks for applicant.
Michael Ciavaglia for respondent.
solicitors of record:
Blake, Cassels & Graydon, Ottawa, for applicant.
Deputy Attorney General of Canada for respondent.
The following are the reasons for judgment rendered in English by
McGillis J.:
INTRODUCTION
The applicant Wang Canada Limited (Wang) has challenged by way of judicial review a decision, dated March 31, 1998, of the Minister of Public Works and Government Services (Minister), made by his Assistant Deputy Minister Alan Williams, that it was not in the public interest, within the meaning of Article 1015(4)(c) of the North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America (NAFTA),1 to award a contract for computer maintenance services to Wang.
FACTS
In July 1997, the Department of Public Works and Government Services (Department) issued a Request for Proposal and Statement of Work (RFP) for the provision of on-site preventative and remedial computer maintenance services to Revenue Canada nationally on an "as and when required" basis. Wang and seven other companies submitted bids in response to the RFP. Wang is the incumbent service provider to Revenue Canada under a contract that expires on September 30, 1998.
In early October 1997, the Department determined that Wang's proposal complied with the mandatory requirements in the RFP, and evaluated its proposal as constituting the "best value" in accordance with the specified criteria.
During October and November 1997, the Department and Wang negotiated the terms of a contract under which the services were to be provided. By November 19, 1997, they had agreed on the terms of the contract. However, the Department subsequently informed Wang that its bid did not appear to require it to provide the labour for the removal of failed computer hardware components and the reinstallation of new or repaired ones under the "Component Per Incident" service option in the RFP. In response, Wang advised the Department that the labour for removing failed computer components and reinstalling new or repaired parts was not a mandatory requirement in the RFP under the Component Per Incident service option. Indeed, under the existing service contract with Wang, Revenue Canada personnel were required to provide the labour to remove failed components and to install repaired or replacement ones. However, all of the other seven companies that submitted bids in response to the RFP had included that labour as part of the service to be provided.
By letter dated December 5, 1997, the Department advised Wang that its proposal was "non-compliant" with the RFP, and that the contract would be awarded "to the company that submitted the highest rated compliant proposal in accordance with the evaluation criteria." In that letter, the Department explained its reasons for taking the position that the labour for removing and reinstalling computer components was a necessary part of Revenue Canada's requirements in the RFP. Among other things, the Department referred to information contained in the Solicitation Update portion of the RFP indicating that the service option in question was "new", and that Wang, as the existing service provider for Revenue Canada, could not rely on the work requirements of its existing contract in interpreting those in the RFP.
On December 16, 1997, Wang filed a complaint under subsection 30.11(1) of the Canadian International Trade Tribunal Act (CITT Act)2 with the Canadian International Trade Tribunal (Tribunal). In its complaint, Wang alleged that the Department had breached Article 506(6) of the Agreement on Internal Trade,3 by failing to identify clearly in the RFP the basis for evaluating the bids. Alternatively, Wang alleged that the RFP was ambiguous in relation to the work required in the Component Per Incident service option. Wang further alleged that the Department violated Articles 1015(4)(c) and (d) of NAFTA, in that the contract would not be awarded in accordance with the criteria and essential requirements specified in the RFP. Finally, Wang alleged that the Department contravened Article 1013(1)(g) of NAFTA, by failing to include a "complete description of the goods or services to be procured".
On December 19, 1997, the Tribunal determined that the conditions for inquiry in section 7 of the Canadian International Trade Tribunal Procurement Inquiry Regulations (CITT Procurement Inquiry Regulations)4 had been met, and under section 30.13 [as enacted by S.C. 1993, c. 44, s. 44] of the CITT Act, decided to conduct an inquiry into the complaint. The inquiry was conducted on the basis of the written submissions of Wang, the Department and an intervenor.
In its complaint, Wang requested that the Tribunal grant it various remedies. Among other things, Wang requested that the Tribunal award it the contract. In the alternative, in the event that the Tribunal found the impugned provision in the RFP to be ambiguous, Wang requested as follows:
. . . that a new solicitation for the portion of the contract dealing with the "Component Per Incident" only be issued, or that a new solicitation dealing with the financial proposal only be issued, or that a new solicitation for the requirement be issued. Wang finally requested to be compensated for any costs associated with revising its bid to conform with the requirements of the new solicitation and for its costs to submit and pursue this complaint.
In its submissions to the Tribunal, the Department argued, among other things, that there was no ambiguity in the requirements of the RFP. It therefore requested that the Tribunal dismiss Wang's complaint with costs.
Following its inquiry, the Tribunal rendered a determination on March 11, 1998 [Wang Canada Ltd. (Re), [1998] C.I.T.T. No. 17 (QL)], in which it determined that Wang's complaint was valid. In particular, the Tribunal found that the RFP did not require a bidder to include in the Component Per Incident service option the labour costs associated with the removal and reinstallation of a computer component. In its findings and its determination, the Tribunal stated, in part, as follows [at paragraphs 55-59]:
The Tribunal is of the view that, according to the terms of the RFP and the clarifications provided by the Department, these tasks could be performed by Revenue Canada personnel. Alternatively, these tasks could be performed by the contractor outside of the "Component Per Incident" service option.
Having interpreted the RFP as not requiring that a bidder include in the "Component Per Incident Remedial Maintenance Rate" the labour costs associated with the removal of a failed component and installation of a new or repaired component, the Tribunal concludes that the Department's determination that Wang's proposal was non-compliant on the basis that it did not include such labour costs constituted a violation of the provisions of Article 506(6) of the AIT and Article 1013(1) of NAFTA. In particular, the Tribunal is of the view that, by interpreting the RFP to include such labour costs and determining that Wang's proposal was non-compliant, the Department introduced, after bid closing, a new mandatory requirement into the RFP.
It is clear from the information on the record that the Department assessed Wang's proposal as being the "best value" and intended to award Wang the contract as evidenced by the contract negotiations between the Department and Wang. Were it not for the difference in interpretation of the "Component Per Incident Remedial Maintenance Rate" in the RFP, which only became known when the Department and Wang were finalizing the terms and conditions of the contract, the Tribunal is of the view that the Department would have awarded Wang the contract. In these circumstances, the Tribunal is of the view that, subject to Article 1015(4) of NAFTA, Wang should be awarded the contract.
DETERMINATION OF THE TRIBUNAL
In light of the foregoing, the Tribunal determines, in consideration of the subject matter of the complaint, that the procurement was not conducted according to the requirements set out in NAFTA and the AIT and that, therefore, the complaint is valid.
Pursuant to subsections 30.15(2) and (3) of the CITT Act, the Tribunal recommends, as a remedy, that, subject to the provisions of Article 1015(4)(c) of NAFTA, the Department award the contract to Wang.
Given its determination that the complaint was valid, on the basis that the Department did not conduct the procurement according to the requirements of NAFTA and the Agreement on Internal Trade, the Tribunal recommended, by way of remedy, that the Department award the contract to Wang, subject to the public interest exception in Article 1015(4)(c) of NAFTA. In the circumstances, it was unnecessary for the Tribunal to consider the alternative relief sought by Wang, requesting that a new solicitation be issued in various forms.
By virtue of subsection 30.18(2) [as enacted idem] of the CITT Act and paragraph 13(a) [as enacted by SOR/96-30, s. 9] of the CITT Procurement Inquiry Regulations, the Department was required to inform the Tribunal of its actions in response to the determination. By letter dated March 31, 1998, the Minister, by his delegate Assistant Deputy Minister Alan Williams, advised the Tribunal that the Department did not intend to award the contract to Wang, on the basis that it was not in the public interest to do so. In his letter, Mr. Williams stated as follows:
This letter is filed in compliance with Subsection 13(a) of the Canadian International Trade Tribunal Procurement Inquiry Regulations.
The Tribunal, in its Determination issued on Wednesday, March 11, 1998 made the following recommendation concerning the referenced Complaint relating to a Request for Proposal (RFP) for the provision of maintenance services on behalf of Revenue Canada.
"Pursuant to subsections 30.15(2) and (3) of the Canadian International Trade Tribunal Act , the Canadian International Trade Tribunal recommends, as a remedy, that, subject to the provisions of Article 1015(4)(c) of the North American Free Trade Agreement, the Department, award the contract to Wang Canada Limited."
The Crown has reviewed the Findings of The Tribunal and has carefully considered the recommendation of the Tribunal, the requirements of Revenue Canada and the provisions of the trade agreements. The Tribunal has made a finding that the terms of the RFP did not require that a bidder include in the "Component per Incident Remedial Maintenance Rate" the labour costs associated with a failed component and installation of a new or repaired component.
These labour costs were, however, intended to be part of the requirement for the provision of maintenance services on behalf of Revenue Canada and the Crown has always intended to acquire services that met all of the requirements for maintenance services as was detailed in the Government Institution Report.
The services proposed by Wang Canada Limited do not meet the needs of Revenue Canada. A contract with Wang Canada Limited based on the RFP specifications as determined by the Tribunal would result in Revenue Canada acquiring and paying for a service that does not meet all of its needs.
It is respectfully submitted that for the Crown to negotiate with Wang Canada Limited and enhance both the scope of work and the price to be paid under the proposed contract in order to meet Revenue Canada's requirements would constitute a violation of NAFTA Article 1014.
For these reasons, the Crown has determined pursuant to NAFTA Article 1015(4)(c) that it is not in the best public interest to award the subject contract to Wang Canada Limited.
I am pleased to advise that the Crown intends to re-issue a request for proposal in respect of this requirement in order to afford all potential suppliers the opportunity to submit a proposal based on the requirements of Revenue Canada that "Component per Incident Remedial Maintenance Rate" include the labour costs associated with a failed component and installation of a new or repaired component. It is noted that this course of action will provide Wang Canada Limited with relief that it specifically requested in its Complaint.
On May 5, 1998, Wang instituted judicial review proceedings challenging the decision of the Department to reissue a RFP in respect of the computer maintenance services required by Revenue Canada. By letter dated May 11, 1998, counsel for the Department informed counsel for Wang that the Department would not reissue the RFP, but rather would issue a new one.
On May 11, 1998, the Department issued a new RFP for the Revenue Canada computer maintenance services. The new RFP was the same as the previous one, save and except that the labour required to remove and reinstall computer components was specified as a significant requirement of the Component Per Incident service option. The new RFP required bids to be submitted on or before June 29, 1998. Wang has submitted a bid in response to the new RFP.
ISSUES
The principal issue to be determined on this application is whether the Minister acted in bad faith, erred in law or acted upon the basis of irrelevant considerations in deciding that it was not in the public interest to award the contract to Wang.
ANALYSIS
(i) statutory scheme governing procurement review
Canada is a signatory to NAFTA and the Agreement on Internal Trade, which require, among other things, open and fair access to government procurement for certain goods and services, including those which are at issue in the present case. Those agreements also require the signatories to establish a complaint authority. In Canada, the CITT Act has established the Tribunal as the complaint authority. The provisions governing complaints by potential suppliers in relation to government procurement are outlined in sections 30.1 to 30.19 of the CITT Act. For the purposes of the present case, it is only necessary to refer to certain of those provisions.
Under subsection 30.11(1) of the CITT Act, a bidder on a contract for the supply of goods or services proposed to be awarded by a government institution may file a complaint with the Tribunal "concerning any aspect of the procurement process". Following the filing of a complaint, the Tribunal must decide, under subsection 30.13(1), whether to conduct an inquiry into the complaint. In the event that the Tribunal decides to conduct an inquiry, section 11 [as am. by SOR/95-300, s. 9; 96-30, s. 8] of the CITT Procurement Inquiry Regulations requires it to determine whether the procurement was conducted in accordance with the requirements in NAFTA and the Agreement on Internal Trade. At the conclusion of the inquiry, the Tribunal must determine the validity of the complaint, in accordance with subsection 30.14(2) [as enacted by S.C. 1993, c. 44, s. 44] of the CITT Act. Subsection 30.15(1) [as enacted idem] of the CITT Act requires the Tribunal to provide the complainant, the government institution and any other interested party with its findings and recommendations, if any. Under subsection 30.15(2) [as enacted idem], where a Tribunal determines that a complaint is valid, it "may recommend such remedy as it considers appropriate". That provision provides as follows:
30.15 . . .
(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
In the event that a Tribunal makes recommendations, subsection 30.18(1) [as enacted idem] provides that the government institution "shall . . . implement the recommendations to the greatest extent possible." Subsection 30.18(1) provides as follows:
30.18 (1) Where the Tribunal makes recommendations to a government institution under section 30.15, the government institution shall, subject to the regulations, implement the recommendations to the greatest extent possible.
The government institution must also, by virtue of subsection 30.18(2) [as enacted idem], "advise the Tribunal in writing of the extent to which it intends to implement the recommendations and, if it does not intend to implement them fully, the reasons for not doing so."
(ii) remedy recommended by Tribunal
As indicated earlier, the Tribunal recommended as a remedy that the Department award the contract to Wang, subject to the provisions of Article 1015(4)(c) of NAFTA, which provides as follows:
Article 1015 . . .
4. An entity shall award contracts in accordance with the following:
. . .
(c) unless the entity decides in the public interest not to award the contract, the entity shall make the award to the supplier that has been determined to be fully capable of undertaking the contract and whose tender is either the lowest-priced tender or the tender determined to be the most advantageous in terms of the specific evaluation criteria set out in the notices or tender documentation;
(iii) standard of review
During the course of their submissions, counsel for the parties agreed that a ministerial decision not to award a contract is discretionary in nature, and subject to review by the Court only on the narrow grounds that the Minister or his delegate acted in bad faith, erred in law or took into account irrelevant considerations.5
(iv) the meaning of the term "public interest"
A review of the jurisprudence concerning "public interest" reveals that it is a broad, somewhat undefined and flexible concept, which nevertheless includes considerations beyond the interests of the parties to a dispute.6
In the present case, counsel for the applicant submitted, among other things, that the phrase "public interest" in Article 1015(4)(c) of NAFTA should be ascertained by balancing the interest in having an open and fair procurement process against the interest in allowing the government to obtain its goods and services at the most efficient and lowest price possible. In support of that submission, he noted that NAFTA and the Agreement on Internal Trade contemplate a procurement process that balances the two interests. I cannot accept those submissions, on the basis that they unduly narrow or limit the breadth of the phrase "public interest". In my opinion, the phrase "public interest", in the context of Article 1015(4)(c) of NAFTA, permits the Minister to make a discretionary, administrative decision in which he or she may weigh and evaluate a broad range of considerations, beyond those in dispute between the parties, with a view to determining what is in the best interests of the Canadian public. My interpretation of the phrase "public interest" in Article 1015(4)(c) is supported not only by the jurisprudence, but also by the broad and general Preamble to NAFTA, which provides, among other things, that the parties have resolved to "preserve their flexibility to safeguard the public welfare."
However, in the context of Article 1015(4)(c) of NAFTA, the question to be determined is not merely whether the Minister erred in assessing the public interest, but rather whether he erred in determining that it was "in the public interest not to award the contract" to Wang.
(v) the Minister's exercise of discretion
By letter dated March 11, 1998, the Minister's delegate Alan Williams determined, under Article 1015(4)(c) of NAFTA, that it was not in the public interest to award the contract to Wang. In his letter, he indicated that the Government had always intended the labour costs in question to be included in the requirements for the provision of certain maintenance services specified in the RFP. Furthermore, in the event that Revenue Canada was required to enter into a contract based on the specifications in the RFP, as interpreted by the Tribunal, it would be required to acquire and to pay for a service that did not meet all of its needs. Finally, he asserted that the Department would be required to negotiate with Wang, thereby violating Article 1014 of NAFTA. As a result, he indicated that the RFP would be reissued in order to permit bidders to submit a proposal based on the requirement that the Component Per Incident service option included the labour costs for removing and reinstalling components. He also stated that the reissuance of the RFP would provide Wang with the relief it requested in its complaint to the Tribunal. After Wang instituted the present judicial review proceedings, a new RFP was issued that was identical to the original one, save and except that the Component Per Incident service option expressly required the provision of labour for removing failed computer components and replacing them with new or repaired parts.
Under the terms of Article 1015(4)(c) of NAFTA, a government entity must award a contract to a supplier whose bid meets certain criteria, unless it "decides in the public interest not to award the contract." As a result, the public interest exception in Article 1015(4)(c) of NAFTA may only be invoked by a government entity in circumstances where a decision is made not to award the contract.
In the present case, the facts establish that the Minister's delegate did not decide "not to award the contract", within the meaning of Article 1015(4)(c) of NAFTA; rather, he determined that the contract should issue, but that the RFP should be varied to refer specifically to the requirement for labour in the Component Per Incident service option. In other words, the Minister's delegate never made a decision that Revenue Canada did not require on-site preventative and remedial computer maintenance services nationally on an "as and when required" basis, as called for in the original RFP, or that such a contract would not be awarded. However, in order to correct what he perceived to be an error, oversight or ambiguity in the original RFP, he chose to ignore the specific findings of the Tribunal, and its recommendation that the contract be awarded to Wang, by issuing a new RFP. In my opinion, the Minister's delegate was not entitled to rely on the public interest exception in the circumstances of the present case, in that an objective review of the facts reveals that he did not make a decision "not to award the contract", within the meaning of Article 1015(4)(c) of NAFTA. Furthermore, in taking procedural steps to circumvent the determination made by the Tribunal, the Minister's delegate acted contrary to the purpose and intent of the legislative scheme, particularly the statutory requirement in subsection 30.18(1) of the CITT Act that he implement the Tribunal's recommendations to the greatest extent possible. Given his obvious disagreement with the Tribunal's interpretation of the impugned provision of the RFP, the Minister's delegate ought to have challenged the determination directly by instituting judicial review proceedings, rather than by purporting to rely on the public interest exception in Article 1015(4)(c) of NAFTA in an attempt to avoid it. NAFTA and the Agreement on Internal Trade are important trade agreements which impose significant obligations on our government institutions, and the legislative scheme implementing them into Canadian law ought to be rigorously respected. Unfortunately, the actions of the Minister's delegate in the present case are inconsistent with the overall purpose and intent of that legislative scheme, as it relates to the government procurement process.
In the circumstances, I have concluded that the Minister's delegate erred in law by misinterpreting the scope of his authority under Article 1015(4)(c) of NAFTA, given his intention to award the contract for the Revenue Canada on-site preventative and remedial computer maintenance service nationally.
DECISION
The application for judicial review is allowed with costs. The decision of the Minister, made by his Assistant Deputy Minister Alan Williams on March 31, 1998, is quashed. The contract shall be awarded to Wang by the Department in accordance with the recommendation of the Tribunal.
1 December 17, 1992, [1994] Can. T.S. No. 2. NAFTA was implemented into the laws of Canada by the North American Free Trade Agreement Implementation Act, S.C. 1993, c. 44.
2 R.S.C., 1985 (4th Supp.) c. 47, as enacted by the North American Free Trade Agreement Implementation Act, S.C. 1993, c. 44, s. 44.
3 Agreement on Internal Trade, Canada Gazette Part I, April 29, 1995, Vol. 129, No. 17, pp. 1323-1470. The Agreement on Internal Trade was implemented into the laws of Canada by the Agreement on Internal Trade Implementation Act, S.C. 1996, c. 17.
4 SOR/93-602, as am. by SOR/95-300, s. 7 and SOR/96-30, s. 5.
5 See for example Maple Lodge Farms Ltd. v. Government of Canada, [1982] 2 S.C.R. 2, at pp. 7-8; Williams v. Canada (Minister of Citizenship and Immigration), [1997] 2 F.C. 646 (C.A.), at p. 664.
6 See for example Canadian National Railway Co. v. Nakina (Township) (1986) , 69 N.R. 124 (F.C.A.); at p. 125; R. v. Morales, [1992] 3 S.C.R. 711, at pp. 732, 751-752, 755-766; and R. v. Zundel, [1992] 2 S.C.R. 731, at pp. 769-770.