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TABLE OF CONTENTS

• DECISION
• STATEMENT OF REASONS
• • DECISION

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IN THE MATTER OF a complaint filed under subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C. 1985 (4th Supp.), c. 47

BY

TERMA A/S

AGAINST

THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES

Pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal has decided not to conduct an inquiry into the complaint.

Hélène Nadeau
Hélène Nadeau
Secretary

1. Subsection 30.11(1) of the Canadian International Trade Tribunal Act ¹ provides that, subject to the Canadian International Trade Tribunal Procurement Inquiry Regulations,² a potential supplier may file a complaint with the Canadian International Trade Tribunal (the Tribunal) concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint. Moreover, subsection 30.13(1) of the CITT Act provides that, subject to the Regulations, after the Tribunal determines that a complaint complies with subsection 30.11(2) of the CITT Act, it shall decide whether to conduct an inquiry into the complaint.

2. Terma A/S (Terma) of Herlev, Denmark, alleged that the Department of Public Works and Government Services (PWGSC), in regard to Solicitation No. W8472-085129/A for fire control and launcher systems on behalf of the Department of National Defence (DND), awarded the contract to a bidder whose product did not meet all the mandatory requirements listed in the solicitation.

3. As indicated above, subsection 30.11(1) of the CITT Act provides that, “[s]ubject to the regulations, a potential supplier may file a complaint with the Tribunal concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint.”

4. The Tribunal must first examine whether there is a “designated contract” as defined in section 30.1 of the CITT Act. This section defines such a contract as “a contract for the supply of goods or services that has been or is proposed to be awarded by a government institution and that is designated or of a class of contracts designated by the regulations.”

5. For the purposes of the definition of “designated contract” in section 30.1 of the CITT Act, the Regulations designate any contract or class of contract concerning a procurement of goods or services or any combination of goods or services by a government institution, as described in Article 1001 of the North American Free Trade Agreement,³ in Article 502 of the Agreement on Internal Trade,⁴ in Article I of the Agreement on Government Procurement ⁵ or in Article Kbis-01 of Chapter Kbis of the Canada-Chile Free Trade Agreement.⁶ .

6. The Tribunal notes that the procurement at issue concerns goods that are classified under Federal Supply Classification code N5865. According to Annex 1001.1b-1 of NAFTA, Appendix 1 to Canada’s Annex 1 of the AGP and Annex Kbis-01.1-3 of the CCFTA, none of those trade agreements apply when such goods are being purchased on behalf of DND. Terma’s complaint included PWGSC’s Notice of Proposed Procurement and the Request for Proposal, both of which identify DND as the department for which the goods are being procured. Thus, the Tribunal finds that, as these goods are for DND, NAFTA, the AGP and the CCFTA do not apply. There is no such exclusion provided for under the AIT. As all the other applicable conditions are met, the Tribunal finds that the AIT applies to this solicitation. In that sense, the solicitation constitutes a “designated contract” as defined by section 30.1 of the CITT Act.

7. Second, the Tribunal must address, under subsection 30.11(1) of the CITT Act, whether the complainant is a “potential supplier”.

8. In that respect, the Tribunal must refer to Canada (Attorney General) v. Northrop Grumman Corporation,⁷ where a majority of the Federal Court of Appeal recently adopted an interpretation of section 30.11 of the CITT Act and of the applicable provisions of the AIT, in review of an earlier Tribunal decision. Specifically, the Federal Court of Appeal determined as follows:

[85] The three trade agreements may be regarded as “doors” into the jurisdiction of the CITT. A potential complainant in respect of a procurement may pass through a “door” and thereby gain access to the CITT complaint procedure, by demonstrating that the subject matter of the procurement is within the scope of one of the trade agreements and that the activity contemplated by that potential complainant is covered by, or within the scope of, that agreement. In the present circumstances, the NAFTA and the Agreement on Government Procurement “doors” are closed because the subject matter of the procurement is specifically excluded from the scope of those agreements. The AIT, the only remaining “door”, will only be open to Northrop Overseas if it can demonstrate that it is a Canadian supplier that would be engaged in a procurement within Canada, as required by Article 502(1) [of the AIT], if it were to be awarded the contract contemplated by the RFP.

9. Given this decision, the Tribunal must confirm whether Terma is a “Canadian supplier that would be engaged in a procurement within Canada”. Article 518 of the AIT defines “Canadian supplier” as a “supplier that has a place of business in Canada.” Article 518 further defines “place of business” as “an establishment where a supplier conducts activities on a permanent basis that is clearly identified by name and accessible during normal working hours.” Therefore, to have the necessary standing to file a complaint for an alleged violation of the AIT, a complainant must meet the definition of “Canadian supplier” under Article 518.

10. In the case at hand, the complaint identifies Terma as the only complainant in this matter. No information or evidence is provided in the complaint to indicate whether Terma maintains a permanent place of business in Canada, as required by the AIT. The Tribunal therefore finds that Terma is not a “Canadian supplier” as defined by the AIT and that it does not have standing to file a complaint under section 30.11 of the CITT Act for an alleged violation of the AIT. Therefore, the Tribunal does not have jurisdiction to entertain the complaint filed by Terma.

DECISION

11. Pursuant to subsection 30.13(1) of the CITT Act, the Tribunal has decided not to conduct an inquiry into the complaint.

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¹ . R.S.C. 1985 (4th Supp.), c. 47 [CITT Act].

² . S.O.R./93-602 [Regulations].

³ . 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, 17 December 1992, 1994 Can. T.S. No. 2 (entered into force 1 January 1994) [NAFTA].

⁴ . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/index_en/ait.htm> [AIT].

⁵ . 15 April 1994, online: World Trade Organization <http://www.wto.org/english/docs_e/legal_e/final_e.htm> [AGP].

⁶ . Free Trade Agreement between the Government of Canada and the Government of the Republic of Chile, 1997 Can. T.S. No. 50 (entered into force 5 July 1997) [CCFTA]. Chapter Kbis, the chapter entitled “Government Procurement”, came into effect on September 5, 2008.

⁷ . 2008 FCA 187 (CanLII).