The court previously found that unsuccessful project bidders’ complaint about the process was valid
The Federal Court of Appeal upheld a penalty that requires Public Works and Government Services Canada to pay unsuccessful project bidders $5,000, despite the bidders’ argument that the federal department should be dealt a harsher blow for allowing the successful bidder to change the terms of its winning bid retroactively.
The penalty, ordered by the Canadian International Trade Tribunal, also requires Public Works to conduct certain checks and balances before potentially extending its contract with the bidder it selected.
The dispute dates back to 2018, when Public Works awarded a contract to Atlantic Towing Limited, under which the company would provide two emergency towing vessels to support Canadian Coast Guard operations.
Several weeks later, Public Works allowed Atlantic Towing to substitute all of the ship masters the company had proposed in its winning bid with new masters. This was permitted under the request for proposals' substitution clause.
Heiltsuk Horizon Maritime Services Ltd. and Horizon Maritime Services Ltd., which had also bid for the contract and had been ranked last among seven bidders by Public Works, filed a complaint with the tribunal. The companies argued that Atlantic Towing’s new ship masters did not meet the technical requirements of the RFP under the substitution clause, and that Public Works had effectively conducted a sole-source procurement in which Atlantic Towing was the only bidder.
The tribunal dismissed Heiltsuk/Horizon’s complaint, finding that while Public Works should have better documented how it evaluated the substitute ship masters, it was ultimately reasonable for the department to find that the substitutes met all the requirements of the RFP.
In a 2023 decision, however, the FCA found that there was no contemporaneous evidence to support the tribunal’s conclusion that the substitute ship masters complied with the RFP and merited full points under the bid scoring system. The appellate court found that Heiltsuk/Horizon’s complaint was valid and ordered the companies to return to the tribunal for a decision on remedies.
The tribunal recommended that Public Works pay Heiltsuk/Horizon $5,000 for its breach. It also recommended that, when Public Works potentially extends its contract with Atlantic Towing, it verify and document that the proposed ship masters have qualifications that meet or exceed the score earned by the ship masters the company originally proposed.
Heiltsuk/Horizon appealed the remedies ruling. They told the FCA that it should declare that Public Works’ breach was serious and undermined the integrity of the procurement process. The companies also asked the court to cancel Atlantic Towing’s contract, award Heiltsuk/Horizon compensation for lost opportunity, and denounce Public Works.
The FCA dismissed the appellants’ arguments, finding that the tribunal reasonably assessed the remedies. The appellate court also agreed with the tribunal’s finding that cancelling Atlantic Towing’s contract is unjustified, “given the advanced stage of its execution and the concerns its interruption would have on the provision of an essential service.”
Counsel for Heiltsuk/Horizon were unable to immediately provide a comment.
Counsel for Atlantic Towing and spokespeople for the Attorney General of Canada’s office did not respond to requests for comment.
