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Canadian International Trade Tribunal (CITT) (2). Canada (Attorney General) v. EllisDon Corporation
In Canada (Attorney General) v. EllisDon Corporation (Fed CA, 2024) the Federal Court of Appeal dismissed a federal AG
JR, this of a Canadian International Trade Tribunal (CITT) ruling that "the Department of Public Works and Government Services (PW) had breached trade agreements by mismanaging a procurement process", "recommending that the parties negotiate the quantum and reserving for itself the jurisdiction to establish the final amount".
Here the court reviews available remedies under the CITTA [CITTA s.30.15]:[27] As for the remedy, the Tribunal had to decide whether EllisDon should receive compensation for its lost opportunity in the amount of the profit that it would reasonably have earned on contracts for which it was unable to tender as a result of PW’s breaches. EllisDon argued that these breaches left it in a "“hostage situation”" where it was unable to pursue other contracts while under the contract with PW since the stop work order could be lifted at a moment’s notice and EllisDon had to be ready to start construction at all times.
[28] The Tribunal framed its remedy analysis around the relevant legislative provisions, subsections 30.15(2) and (3) of the Canadian International Trade Tribunal Act, R.S.C. 1985, c. 47 (4th Supp.) (CITT Act).
[29] The Tribunal found that, under subsection 30.15(2), it had a broad discretion in selecting an appropriate remedy, including, pursuant to paragraph (e), compensating the complainant by a specified amount. This subsection provides: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:
30.15 (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) that a new solicitation for the designated contract be issued; "
(a) un nouvel appel d’offres;
(b) that the bids be re-evaluated;
(b) la réévaluation des soumissions présentées;
(c) that the designated contract be terminated;
(c) la résiliation du contrat spécifique;
(d) that the designated contract be awarded to the complainant; or
(d) l’attribution du contrat spécifique au plaignant;
(e) that the complainant be compensated by an amount specified by the Tribunal.
(e) le versement d’une indemnité, dont il précise le montant, au plaignant. [30] "The Tribunal also noted five mandatory factors it must consider under subsection 30.15(3) when recommending a remedy. Subsection 30.15(3) provides:30.15 (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 "
30.15 (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) the seriousness of any deficiency in the procurement process found by the Tribunal; "
(a) la gravité des irrégularités qu’il a constatées dans la procédure des marchés publics;
(b) the degree to which the complainant and all other interested parties were prejudiced;
(b) l’ampleur du préjudice causé au plaignant ou à tout autre intéressé;
(c) the degree to which the integrity and efficiency of the competitive procurement system was prejudiced;
(c) l’ampleur du préjudice causé à l’intégrité ou à l’efficacité du mécanisme d’adjudication;
(d) whether the parties acted in good faith; and
(d) la bonne foi des parties;
(e) the extent to which the contract was performed.
(e) le degré d’exécution du contrat. [31] The Tribunal’s consideration of the mandatory factors is summarized below.
[32] The first mandatory factor is the seriousness of the deficiency in the procurement process. The Tribunal determined that the deficiency was serious. PW failed to follow the basic steps required to verify Pomerleau’s e-bond, and failed to conduct basic due diligence when PW was unable verify it. Even PW, itself, described the deficiency as serious. The Tribunal concluded that this factor favours the remedy suggested by EllisDon, as it "“tailor[s] the compensation to fit the actual circumstances”" (Decision at para. 75).
[33] The second factor concerns the prejudice to interested parties. The Tribunal identified the prejudice to EllisDon as occurring during the period where PW withheld the facts regarding its errors in evaluating Pomerleau’s e-bond. Since the contract was eventually awarded to Pomerleau, the Tribunal found that this factor also favours the compensation sought by EllisDon.
[34] The third factor is the degree to which the procurement system is prejudiced. The Tribunal concluded that, although the deficiency was significant in this case, the problem was not systemic. For this reason, the remedy suggested by EllisDon was appropriate as it would enable the Tribunal to craft a remedy suited for EllisDon’s particular circumstances.
[35] Fourth, the Tribunal is required to consider whether the parties acted in good faith. The Tribunal noted that public servants overseeing the procurement process are presumed to act in good faith, and this had not been rebutted. It found that PW’s behaviour "“could, at best, be described as negligent, even while lacking malice”" (Decision at para. 79). Accordingly, this factor favoured the compensation requested by EllisDon.
[36] The fifth factor is the extent to which the contract was performed. The Tribunal found that this factor was neutral since there was no substantial performance by EllisDon.
[37] As a result, the Tribunal recommended as a remedy that PW compensate EllisDon for its lost opportunity cost, if any. The quantum was to be determined separately. At paras 47-63 the court endorses that the 'lost oppourtunity' measure is an appropriate CITT remedy for third party contracts lost due to the breaches.
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