ENTREPRISE MARISSA INC.
ENTREPRISE MARISSA INC.
v.
DEPARTMENT OF PUBLICS WORKS AND GOVERNMENT SERVICES
File No. PR-2010-086
Determination issued
Monday, June 13, 2011
Reasons issued
Friday, July 22, 2011
- DETERMINATION OF THE TRIBUNAL
- STATEMENT OF REASONS
IN THE MATTER OF a complaint filed by Entreprise Marissa Inc. pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C. 1985 (4th Supp.), c. 47;
AND FURTHER TO a decision to conduct an inquiry into the complaint pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act.
BETWEEN
ENTREPRISE MARISSA INC. Complainant
AND
THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES Government Institution
Pursuant to subsection 30.14(2) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal determines that the complaint is not valid.
Pursuant to section 30.16 of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal awards the Department of Public Works and Government Services its reasonable costs incurred in responding to the complaint, which costs are to be paid by Entreprise Marissa Inc. The Canadian International Trade Tribunal’s preliminary indication of the level of complexity for this complaint case is Level 3, and its preliminary indication of the amount of the cost award is $4,100. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Canadian International Trade Tribunal, as contemplated in article 4.2 of the Guideline for Fixing Costs in Procurement Complaint Proceedings. The Canadian International Trade Tribunal retains jurisdiction to establish the final amount of the award
Serge Fréchette
Serge Fréchette
Presiding Member
Dominique Laporte
Dominique Laporte
Secretary
The statement of reasons will be issued at a later date.
Place of Hearing: Ottawa, Ontario
Date of Hearing: April 20, 2011
Tribunal Member: Serge Fréchette, Presiding Member
Director: Randolph W. Heggart
Senior Investigator: Josée B. Leblanc
Counsel for the Tribunal: Georges Bujold
Complainant: Entreprise Marissa Inc.
Counsel for the Complainant: Sylvain Trudel
Government Institution: Department of Public Works and Government Services
Counsel for the Government Institution: Alexandre Kaufman
Susan D. Clarke
Ian McLeod
Roy Chamoun
Danie Belisle
Please address all communications to:
The Secretary
Canadian International Trade Tribunal
Standard Life Centre
333 Laurier Avenue West
15th Floor
Ottawa, Ontario
K1A 0G7
Telephone: 613-993-3595
Fax: 613-990-2439
E-mail:
1. On January 27, 2011, Entreprise Marissa Inc. (Marissa) fil .ed a complaint with the Canadian International Trade Tribunal (the Tribunal) pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act.1 The complaint relates to an invitation to tender (Solicitation No. EE517-111250/B) by the Department of Public Works and Government Services (PWGSC) for the maintenance dredging of the St. Lawrence Seaway in the North Traverse sector, between Saint-Jean-de-l’Île-d’Orléans and Cap Gribane, and the Bécancour sector, which extends from Bécancour to Batiscan.
2. According to the complaint, the nature of the work consists mainly of maintenance dredging in the North Traverse sector by removing an annual volume of sediment estimated at 50,000 cubic metres, which represents the biggest contract of this type in the section of the Seaway between Montréal and Île aux Coudres. The contract also consists of dredging to remove about 20,000 cubic metres of sediment in the Bécancour sector. As an option, the invitation to tender provides that the Cap-Santé Traverse sector may also be dredged by the successful bidder.
3. Marissa alleged that one of the mandatory requirements of the invitation to tender is overly restrictive and creates an “unnecessary obstacle” [translation] that prevents it from tendering, which, according to Marissa, is contrary to the fair procurement principles set out in the Agreement on Internal Trade.2 The requirement in question concerns the type of equipment required to perform the dredging, namely, the obligation that the self-propelled trailing suction hopper dredge, with which the work must be performed, “shall be equipped with doors in the hull or could have a split hull to unload the spoil” [translation].3 According to Marissa, this condition requiring that the dredge be equipped with doors in the hull had never been stipulated previously in any of the invitations to tender for dredging in the North Traverse, notwithstanding the fact that the obligation to perform dredging with a self-propelled trailing suction hopper dredge has existed for approximately 27 years.
4. Moreover, Marissa alleged that the addition of this condition has the effect of restricting competition, without valid reason, for a major contact which, in addition, will for the very first time be awarded for a seven-year period.
5. As a remedy, Marissa requested that the existing invitation to tender be cancelled and that the Tribunal recommend that PWGSC issue a new invitation to tender, deleting the new mandatory requirement mentioned above wherever it is referenced in the invitation to tender that is the subject of the complaint.
6. On February 4, 2011, the Tribunal informed the parties that the complaint had been accepted for inquiry, as it met the requirements of subsection 30.11(2) of the CITT Act and the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations.4 In addition, the same day, the Tribunal issued a postponement of award of contract order, in which it ordered PWGSC to postpone the award of any contract until the Tribunal determined the validity of the complaint.
7. On February 14, 2011, PWGSC requested that the Tribunal rescind the postponement of award of contract order issued on February 4, 2011. The same day, Marissa requested, in the event that, pursuant to subsection 30.13(4) of the CITT Act, the Tribunal rescinded the postponement of award of contract order, that it issue another postponement of award of contract order for the portion of the contract extending beyond the first year, to pursue the objective of protecting the public interest and the Tribunal’s inquiry process, as well as the rights of potential suppliers.
8. On February 15, 2011, the Tribunal issued an order rescinding the postponement of award of contract order of February 4, 2011, and did not act on Marissa’s request to order the postponement of award of contract for the portion of the contract extending beyond the first year. The same day, Marissa asked the Tribunal for permission to file additional comments following this rescission. On February 18, 2011, the Tribunal dismissed Marissa’s request to file additional comments at that stage of the proceedings, but informed it that it would have the opportunity to do so after the filing of the Government Institution Report (GIR).
9. On March 1, 2011, PWGSC filed its GIR with the Tribunal. On March 11, 2011, Marissa filed its comments on the GIR.
10. On March 22, 2011, the Tribunal informed the parties that, pursuant to rule 105 of the Canadian International Trade Tribunal Rules,5 it would hold a public hearing on April 20, 2011, to clarify certain questions relating to the interpretation and eventual application of Article 404 (Legitimate Objectives) of the AIT in this complaint. In the same correspondence, the Tribunal ordered the parties to inform it in writing, not later than April 6, 2011, of the number of witnesses that they intended to call at the hearing, including their names. Moreover, the Tribunal advised the parties that they should pay special attention to rule 22 of the Rules if they planned to have a witness qualified as an expert, by filing and serving on the other parties a report, signed by the expert, setting out the expert’s name, address, qualifications and area of expertise, the expert’s résumé and a detailed outline of the expert’s testimony. The Tribunal also informed the parties that they had until April 13, 2011, to file additional comments concerning the GIR or the comments on the GIR, if they so desired.
11. On March 30, 2011, as it had undertaken to do in its GIR, PWGSC informed the Tribunal that it had received five bids following the invitation to tender, including that of Marissa. According to PWGSC, of the five bids received, only Marissa’s bid did not meet the criterion to offer a self-propelled trailing suction hopper dredge with doors in the hull.6
12. On April 6, 2011, Marissa confirmed to the Tribunal that it would be participating at the hearing and provided it with the names of its witnesses, including a copy of the expert report, dated April 5, 2011, prepared by the witness that it intended to call as an expert. In its letter of April 6, 2011, Marissa requested that the Tribunal postpone the hearing to allow its expert witness, Mr. Marc Villeneuve, to testify, because he would be out of Canada from April 15 to 25, 2011, or that it ask PWGSC to agree to the filing of the expert witness report with the Tribunal without the witness having testified.
13. On April 11, 2011, PWGSC informed the Tribunal that it did not object to the filing in evidence of the April 5, 2011, letter of Marissa’s expert witness without the witness having testified. On April 13, 2011, PWGSC and Marissa filed their respective additional comments.
14. The Tribunal held a hearing in Ottawa, Ontario, on April 20, 2011. At the hearing, Marissa called as witnesses Mr. René Lagacé, President of Marissa and of Métro Excavation Inc. (parent company), and Mr. Benoit Blouin, a geological engineer, a project manager and an estimator of work in hydric environments. PWGSC called as witnesses Mr. Jean Rochette, Procurement Specialist, Acquisitions Branch, and Mr. Marc-André Baillargeon, Manager, Dredging and Bathymetric Surveys, both from PWGSC.
PROCUREMENT PROCESS
15. The invitation to tender concerning the solicitation in question was published on MERX7 on December 9, 2010. The solicitation was supposed to end on February 3, 2011, but the bid closing date was postponed to February 24, 2011, and then to March 3, 2011, at the request of certain contractors, to allow them to submit proposals.
16. The following provisions of the invitation to tender are particularly relevant to this case:
IP10 MANDATORY BID REQUIREMENTS
A bid must meet all the mandatory requirements of the invitation to tender to be declared responsive, including those contained under other headings of this invitation to tender, including the instructions, conditions and clauses incorporated by reference in the invitation to tender.
. . .
2. ADDITIONAL CONDITIONS (AC)
. . .
AC03 MANDATORY CONDITIONS OF THE CONTRACT
The contractor must meet all the mandatory conditions of the contract. Otherwise, it will be considered in default of contract, including the other obligations contained under other headings of the contract, including the clauses of the bid and acceptance form, conditions and clauses incorporated by reference in the contract.
. . .
Mandatory conditions Submission period of the requested document Reference . . . 4. Mandatory Characteristics of the Dredge
The trailing suction hopper dredge must be a single-hull self-propelled ship designed to suction-dredge marine shoals while moving and store dredged sediment in its hopper. The dredge shall be equipped with doors in the hull or could have a split hull to unload the spoil. The dredge may be fitted with either one or two trailing drag arms. The volume of the hopper shall be no less than 750 m³.
The contractor will be in default of the contract if this condition is not met at any time during the contract.The contractor shall prove that the dredge satisfies this requirement within forty-eight (48) hours of Canada’s written request. Appendix 4 of this invitation to tender
Specifications, section 01 11 11, article 1.4.2 and section 35 20 23, article 2.1.1
[Translation]
17. The relevant provisions of the specifications8 provide as follows:
Section 01 11 11
. . .
1.4 WORK CONTEMPLATED IN THE CONTRACT DOCUMENTS
. . .
.2 The maintenance dredging sectors, and the quantities for each year of the contract, are:
.1 Bécancour to Batiscan, between buoys C33 and D68;
. . .
This work may be performed with a self-propelled trailing suction hopper dredge and/or a gripping dredge.
.2 North Traverse, between buoys K136 and K91;
. . .
This work must be performed with a self-propelled trailing suction hopper dredge.
. . .
Section 01 35 43
. . .
1.2 REFERENCES
.1 For each year of the contract, the Contractor shall meet the requirements of the most recent environmental screening(s) (ES) available (the ES recommendations produced in 2010 appear in Appendix 9) regarding use of its dredging equipment and its other floating plant, if applicable. In particular, it shall ensure that its equipment and work methods meet the requirements specified therein.
.2 The Contractor shall comply with the laws and regulations regarding protection of the environment, fisheries management and fish habitat protection.
. . .
Section 35 20 23
. . .
1.3 DEFINITIONS
. . .
.11 The trailing suction hopper dredge must be a single-hull self-propelled ship designed to suction-dredge marine shoals while moving and store dredged sediment in its hopper. The dredge shall be equipped with doors in the hull or could have a split hull to unload the spoil. The dredge may be fitted with either one or two trailing drag arms. The volume of the hopper shall be at least 750 m³.
. . .
2.1 DREDGING AND POSITIONING EQUIPMENT
.1 The work in the North Traverse, between buoys K136 and K91, must be performed with a self-propelled trailing suction hopper dredge, the definition of which appears in article 1.3.11 above; the work between Bécancour and Batiscan, and the work on option in the Cap-Santé Traverse, may be performed with a self-propelled trailing suction hopper dredge, or with a gripping dredge.
[Translation]
18. On December 22, 2010, Marissa sent a letter of objection to PWGSC in which it requested the removal of the mandatory requirement set out in the invitation to tender under the heading “Mandatory Characteristics of the Dredge”, according to which the dredge in question must be equipped with doors in the hull or a split hull to unload the spoil. On January 14, 2011, PWGSC responded that it could not consent to this request. PWGSC then informed Marissa that the mention of doors in the hull in the description of the dredge, in the mandatory conditions of the contract, had been added for the sole purpose of providing greater precision regarding the standard characteristics that the type of equipment required must have to meet the operational and environmental constraints specific to dredging the North Traverse. In this letter, PWGSC also indicated that the environmental screening prepared in accordance with the requirements of the Canadian Environmental Assessment Act9 authorized it to dispose of the dredging material in designated open-water disposal areas only, by mass unloading from a dredge with doors in the hull.
19. On January 27, 2011, Marissa filed its complaint with the Tribunal.
20. On March 24, 2011, the contract in question was awarded to a bidder other than Marissa.
POSITIONS OF PARTIES
Marissa’s Position
21. Marissa submitted that the addition of the mandatory condition regarding the presence of doors in the hull on the equipment used to perform the dredging in the North Traverse represents an “unnecessary obstacle” and, at a minimum, operates to create an obstacle to internal trade, which is contrary to Article 403 of the AIT. According to Marissa, it is automatically prevented from bidding, solely due to the addition of this mandatory condition, even though its ship, although it does not have doors in the hull, is designed to suction-dredge while moving, by means of trailing drag arms, is registered in Canada and has a loading capacity twice as great and power four times greater than the dredges that performed dredging in the North Traverse between 1984 and 2008. Marissa argued that whether or not a trailing suction hopper dredge like the one that it intended to propose is equipped with doors in the hull does not change in any way its capacity to dredge suitably according to the provisions of the invitation to tender and the specifications, but also presents environmental advantages regarding its dredged sediment disposal method.10
22. Moreover, Marissa submitted that PWGSC has not proved that this obstacle to trade is justified by the provisions of Article 404 of the AIT, which allow a party to the AIT to maintain a measure that is inconsistent with Article 403 if certain conditions are demonstrated. In this regard, Marissa submitted that the addition of the requirement for doors in the hull and PWGSC’s position regarding the alleged obligation of mass unloading of the sediment from a dredge with doors in the hull do not serve any of the legitimate objectives set out in Article 404, which are defined in Article 200.
23. Regarding this issue, Marissa submitted that the measure does not have the purpose of protecting public safety or marine safety because when a single-hull ship performs dredging operations with its drag arms while moving, the way the ship unloads its spoils does not change the nature of its dredging operations or their marine safety. As for protecting public order, Marissa submitted that the criterion is not applicable in this case. As for the protection of human, animal or plant life or health, Marissa submitted that nowhere in the environmental screening performed by CJB Environment Inc.11 in July 2008 or in the one performed by Dessau12 in May 2010 is there any discussion with regard to the requirement for a self-propelled trailing suction hopper dredge to be equipped with doors in the hull in order to protect human, animal or plant life or health, directly or indirectly. According to Marissa, the complete removal of the sediment from the river is the only method that would not represent any disadvantage for the St. Lawrence, the fish habitat and the plant cover. Regarding protection of the environment, Marissa submitted that the analysis of the environmental screenings even shows that repeated concerns regarding environmental impacts had resulted in an environmental impact study by a departmental working group regarding disposal site X-01, near Île Madame, and in an agreement to abandon the site.
24. On the basis of these concerns and of the fact that the above-mentioned environmental screenings refer to other sediment disposal methods, Marissa claimed that open-water disposal by mass unloading of dredged sediment inherently presents environmental disadvantages, so that nothing in the evidence indicates that doors in the hull are required to unload the sediment on the river bottom to pursue a legitimate objective of protecting the environment. In any case, Marissa submitted that its ship can dispose of the dredged materials directly on the river bottom by mass unloading, just like a dredge equipped with doors in the hull, but that it does so through a pipe that is 42 inches in diameter.13 According to Marissa, this ship could unload the materials at the prescribed locations with great precision, while minimizing, and even eliminating, the risk that the materials unloaded in this manner would drift outside the disposal site as such.
25. Concerning the environmental screening reports prepared by Dessau in 2010 and CJB Environment Inc. in 2008, Marissa alleged that there are very great similarities between certain excerpts from these reports and that nowhere is it specified, required or even recommended that the dredged materials, when they are disposed of in open water, be unloaded through doors in the hull. Marissa submitted that, according to these documents, open-water disposal is the least costly solution to consider under certain conditions, which do not include mass unloading from a dredge with doors in the hull. Thus, Marissa submitted that open-water disposal of dredged sediment at specified sites, which is contemplated by Dessau and CJB Environment Inc., can be accomplished by means other than a dredge with doors in the hull.
26. Moreover, Marissa submitted that, contrary to what PWGSC claims, a self-propelled trailing suction hopper dredge does not necessarily unload its contents through doors in the hull, although generally this type of dredge has such a bottom. Marissa submitted that the ship that it proposes, although it does not have doors in the hull, can unload sediment in two ways:14 (1) by means of a telescopic pipeline (extendable pipe), which unloads the sediment by gravity, at the exact depth desired, and not hydraulically or by force, which is a disposal method similar to mass unloading by a dredge with doors in the hull, and which is just as valid, or (2) by unloading on land, by means of a mobile conveyor with which its ship is already equipped.
27. According to Marissa, PWGSC was fully aware that the ship that it was outfitting at great expense so that it could bid on the contract in question did not have doors in the hull or a split hull, since this ship has been moored in the Port of Québec, close to the offices of PWGSC and the Canadian Coast Guard (CCG), since August 2009. In these circumstances, and considering that this is the first time that the description of the mandatory characteristics of the dredge expressly mentions the requirement for doors in the hull, Marissa submitted that PWGSC’s intention in adding this requirement was manifestly to eliminate the ship that it intended to propose in response to the invitation to tender process and to prevent it from submitting a responsive bid.15
28. In its comments on the GIR, Marissa submitted that, since there had been little competition to obtain the dredging contract in the North Traverse in the past, PWGSC could show flexibility and openness regarding the characteristics of the equipment that a self-propelled trailing suction hopper dredge can offer without compromising its capacity to dredge while navigating. According to Marissa, the special characteristics related to the dredger’s range, manoeuvrability and capacity while moving are the most important characteristics of a self-propelled trailing suction hopper dredge used to dredge the North Traverse; the way in which it unloads the amassed sediment is not important. Marissa submitted that the bid documents could have been drafted to allow for the proposal of equivalent products, i.e. a self-propelled trailing suction hopper dredge that unloads sediment by means other than through doors in the hull.
29. Marissa submitted that it agrees with PWGSC that it is mandatory for the CCG, as promoter of the St. Lawrence River dredging project, to conduct an environmental assessment according to the Canadian Environmental Assessment Act. However, Marissa disagrees with PWGSC’s argument that the assessments had considered the environmental impacts if the work was performed by a dredge with doors in the hull. Marissa submitted that there is no such mention anywhere in the environmental screenings by Dessau or CJB Environment Inc. Moreover, according to Marissa, neither is it specified in these same reports that the “self-propelled trailing suction hopper dredge” [translation] must be equipped with doors in the hull.
30. Regarding PWGSC’s allegation that “[t]he use [of Marissa’s ship unloading system] could have harmful consequences for water quality and the fish habitat” [translation],16 Marissa submitted that the assertion is totally gratuitous and is without any basis or technical reference. Marissa submitted that it disagrees completely with PWGSC’s assertion that “[a]ccepting equipment for which the environmental impacts have never been assessed would infringe the law” [translation]17 and finds that it is overly interpretative and devoid of any basis in law.
31. According to Marissa, Dessau’s report,18 which mentions real environmental concerns on pages 85 and 86, which are illustrated in Figure 2, “Behaviour of Sediment During Open-water Disposal” [translation], provides a good description of where lies the problematic aspect of open-water mass unloading. Marissa submitted that it contains a clear explanation of the effect of “passive diffusion” [translation] of sediment, which, especially in the case of fine particles, is swept further away by turbulence during mass descent of sediment. Marissa argued that these fine particles, which represent between 1 and 5 percent of all deposited sediment, are the main environmental concerns because they are dispersed over longer distances. According to Marissa, Figure 2 illustrates the concentrated “mass unloading” [translation] of sediment, i.e. the unloading is not executed over a large surface under the boat. According to Marissa, this figure perfectly illustrates how the sediment would be unloaded by its ship, because it would use a telescopic pipeline to unload the sediment by gravity.
32. Marissa thus submitted that it does not see how any regulatory or legislative provision could justify preventing its self-propelled trailing suction hopper dredge from performing the dredging operation, regardless of whether it has doors in the hull.
PWGSC’s Position
33. PWGSC submitted that it is well established that the Crown can set its requirements to the extent that they reflect its legitimate operational requirements in good faith.19 According to PWGSC, the criterion according to which the self-propelled trailing suction hopper dredge must have doors in the hull or a split hull to unload the sediments reflects the CCG’s legitimate operational requirements, and it should not be obliged to compromise its legitimate operational requirements to accommodate Marissa’s ship conversion project. In addition, PWGSC stated that there is no proof that Marissa was unable to satisfy the contested requirement, because it could have equipped one of its ships with a self-propelled trailing suction hopper dredge with doors in the hull, as other contractors did. Moreover, PWGSC noted that, despite the mandatory criterion in question, the level of competition for the contract in question had clearly improved in relation to the previous situation. Consequently, PWGSC submitted that the criterion requiring that the dredge have doors in the hull is not a condition that restricts competition, that is overly restrictive, that creates an obstacle to internal trade or that is inconsistent with Article 403 of the AIT.
34. PWGSC also contested Marissa’s assertion that this criterion constitutes a new requirement because, even though this characteristic of the required equipment appears for the first time in the invitation to tender, all the dredges used to perform the work in the North Traverse, since at least 1986, had doors in the hull. According to PWGSC, the evidence shows that, in the dredging industry, it is generally recognized that a self-propelled trailing suction hopper dredge has standard characteristics, including doors in the hull or a split hull. PWGSC submitted that this confirms that the requirement for doors in the hull was added for the sole purpose of providing greater precision regarding the standard characteristics that the required type of equipment must have and not to prevent competition.
35. PWGSC submitted that this requirement in the mandatory characteristics does not constitute an “unnecessary obstacle”. PWGSC submitted in this regard that Dessau’s environmental screening,20 which was prepared pursuant to the requirements of the Canadian Environmental Assessment Act, only authorizes the disposal of dredging materials in open-water disposal areas, by mass unloading from a dredge with doors in the hull. According to PWGSC, no other disposal mode and no other disposal site were authorized. In this regard, PWGSC referred Marissa to the statement of work,21 an integral part of the invitation to tender, which sets out the requirements concerning open-water disposal and the disposal sites authorized for the North Traverse.
36. As an alternative, PWGSC submitted that, even if the Tribunal decided that the mandatory criterion in question is contrary to the provisions of the AIT, it would still be permitted because it meets the four conditions set out in Article 404 of the AIT. According to PWGSC, to meet the first of these conditions, it must be demonstrated that the purpose of the measure is to achieve a legitimate objective, as defined in Chapter Two of the AIT. According to PWGSC, the purpose of the mandatory criterion in question is to achieve legitimate objectives, namely, compliance with the environmental protection laws. In this regard, PWGSC argued that the criteria set out in the invitation to tender textually reiterate the requirements assessed by environmental experts, who recommended that sediment be unloaded by mass descent in open water. Moreover, PWGSC submitted that the contested criterion is not a disguised restriction and is not a measure that constitutes excessive undue impairment or that is more trade-restrictive than necessary in order to achieve these legitimate objectives.
37. PWGSC submitted that an environmental screening required by law must be performed before proceeding with the dredging. This screening concluded that “due to various environmental, economic and technical constraints, open-water disposal of the sediment that will be dredged within the context of this project is the appropriate solution” [translation].22 PWGSC submitted that it was implicit in Dessau’s environmental screening, and in the previous environmental studies, which all recommend that a self-propelled trailing suction hopper dredge be used for the work in the North Traverse, that the dredge in question must have doors in the hull or a split hull, given that these are the standard characteristics of this type of dredge and that the recommended mass descent of sediment can only be achieved with doors in the hull. PWGSC argued that these facts were confirmed subsequently in a letter from Dessau23 dated February 23, 2011, and in a letter from CJB Environment Inc.24 dated February 16, 2011.
38. According to PWGSC, since no environmental study was performed to determine the environmental impact of unloading by “pipe” [translation], such a system could also have repercussions on water quality, due to the re-suspension of sediment, and on the fish habitat. PWGSC added that, since it is mandatory for the CCG to conduct an environmental assessment to consider the environmental impact of dredging, accepting equipment for which the environmental impact has never been assessed would be an infringement of the law.
39. PWGSC submitted that Dessau and CJB Environment Inc. both stated that additional technical studies should be undertaken if another unloading method were considered. PWGSC submitted that even the letter from Marissa’s expert witness, Mr. Villeneuve, is not reassuring regarding the environmental impact that unloading by “pipe” could have.25 PWGSC alleged that it is clear, from reading Mr. Villeneuve’s résumé, that he has no expertise in the environmental field, because his area of expertise is civil engineering. Moreover, according to PWGSC, Mr. Villeneuve’s opinion contains several reservations and cautionary notes that greatly reduce its usefulness. As such, PWGSC submitted that Marissa has not proven that its sediment unloading technique would meet the legitimate objective pursued.
40. PWGSC submitted that it does not exclude the possibility that unloading techniques other than mass disposal through doors in the hull could be environmentally acceptable. However, before being permitted and accepted, they must be proposed and assessed. According to PWGSC, Marissa only proposed unloading through a “pipe” once the invitation to tender was issued and the environmental assessment was concluded, which did not leave the CCG enough time to proceed with an environmental assessment of its unloading method. PWGSC submitted that, during consultations with the industry in September 2010, nobody had contacted it to propose another mode of sediment disposal. According to PWGSC, if this had been done, the method proposed by Marissa could have been reviewed in a timely manner.
41. In its additional submissions filed on April 13, 2011, PWGSC also submitted that the low level of competition in the past was due to the term of the contracts, the limited market in Eastern Canada in the dredging field, particularly for this type of equipment, and the requirements of the “Floating Plant Clause”26 (FPC). Therefore, according to PWGSC, it is clear that the contested measure has almost no effect on trade and that its scope is limited to preventing dredging with an uncertain environmental impact. PWGSC submitted that it must be noted that the Tribunal, in previous cases,27 accepted that a measure did not contravene Article 404 of the AIT when it was established to avoid a risk.
42. Therefore, according to PWGSC, the criteria in the invitation to tender reiterate literally the requirements of the environmental experts, who clearly recommended that dredging be performed by means of a self-propelled trailing suction hopper dredge with doors in the hull and that sediment be unloaded by open-water “mass descent” [translation].28 PWGSC submitted that it developed technical specifications for legitimate reasons relating to environmental and operational considerations and that it did this for legislative compliance, not for the purpose of preventing competition. PWGSC submitted that the measures taken, which included a seven-year contract, aroused sufficient interest in the industry to increase competition, as five bids were received under this invitation to tender. According to PWGSC, Marissa had the opportunity to equip one of its ships with a self-propelled trailing suction hopper dredge with doors in the hull, but chose not to do so. PWGSC noted that in Canada (Attorney General) v. Trust Business Systems, the Federal Court of Appeal noted that “[n]othing prevented Trust from entering proposals using the brand-name products specified by Public Works”.29 According to PWGSC, the same conclusion applies in this case. PWGSC submitted that it increased the term of the contract to seven years so that the modifications to such equipment or its acquisition would be profitable for the potential suppliers, and it also increased the scope of the work. According to PWGSC, these actions had the effect of increasing competition and not restricting it.
ANALYSIS
43. Subsection 30.14(1) of the CITT Act requires that, in conducting an inquiry, the Tribunal limit its considerations to the subject matter of the complaint. At the conclusion of the inquiry, the Tribunal must determine whether the complaint is valid on the basis of whether the procedures and other requirements prescribed in respect of the designated contract have been observed. Section 11 of the Regulations further provides that the Tribunal is required to determine whether the procurement was conducted in accordance with the applicable trade agreements, which, in this case, is the AIT.30 In this regard, it should be mentioned that it is not contested that the AIT is the only relevant trade agreement and that the procurement process in this case is therefore subject to the provisions of Chapter Five of the AIT.
44. Chapter Five of the AIT pertains to the conditions of procurements, for the purpose of establishing a framework that will ensure equal access to procurement for all Canadian suppliers, while favouring competition, a reduction in purchasing costs and the development of a strong economy in a context of transparency and efficiency.31
45. Chapter Five of the AIT contains a set of general rules and specific obligations, which must be observed by the parties to the AIT, including the federal government. Concerning the general rules, Article 500 (Application of General Rules) provides specifically that Articles 403 (No Obstacles) and 404 (Legitimate Objectives) apply to Chapter Five.32 Article 504 provides for an express obligation of non-discrimination with respect to the goods and services covered by the AIT and with respect to the suppliers of these goods or services under the procurements covered by Chapter Five.
46. In view of the facts relating to this complaint and Marissa’s allegations, the Tribunal must address the interpretation and application of Articles 403 (No Obstacles), 404 (Legitimate Objectives) and 504 (Reciprocal Non-Discrimination) of the AIT in its analysis. Indeed, Marissa alleged that the mandatory requirement of the invitation to tender regarding the use of a self-propelled trailing suction hopper dredge “with doors in the hull or a split hull to unload the spoil” [translation] is a condition that is overly restrictive and creates an unjustified obstacle to trade. Moreover, Marissa alleged somewhat implicitly that this measure discriminates against it.33 Because of these allegations, the Tribunal will examine the scope of Articles 403 and 504 to determine whether the requirement for exclusive and mandatory use of a dredge with doors in the hull is inconsistent with any of these articles.
47. However, the obligations set out in Articles 403 and 504 of the AIT are not absolute; they apply “subject to Article 404”. This provision allows the maintaining of a measure that is inconsistent with Article 403 or 504 if certain conditions are met.
48. In other words, the issues are as follows. The Tribunal must determine whether a breach of Article 403 of the AIT exists, due to the existence of an obstacle to trade, or of Article 504, due to the existence of a discriminatory measure relating to the conditions of the subject procurement. In the affirmative, the Tribunal must determine whether PWGSC can benefit from the exception provided in Article 404, which could apply if the purpose of the inconsistent measures is to achieve a legitimate objective, allow the measure and thus justify the existence of the infringement. The Tribunal will first determine whether the mandatory requirement contested in this case breaches Article 403.
Does the Requirement for Doors in the Hull Operate to Create an Obstacle to Internal Trade?
49. Article 403 (No Obstacles) of the AIT provides as follows:
Subject to Article 404, each Party shall ensure that any measure it adopts or maintains does not operate to create an obstacle to internal trade.
50. Therefore, the Tribunal must determine whether the mandatory requirement that the invitation to tender is limited to suppliers that can offer a dredge with doors in the hull is a measure which “operates to create an obstacle to internal trade” within the meaning of Article 403 of the AIT.
51. Pursuant to Article 200 of the AIT, a “measure” includes any legislation, regulation, directive, requirement, guideline, program, policy, administrative practice or other procedure. Consequently, the contested requirement, which constitutes one of the mandatory requirements or provisions of the invitation to tender, is a “measure” for the purposes of Article 403. PWGSC has not contested this fact. It is also not contested that this measure was adopted by PWGSC on behalf of the federal government, which is one of the signatories of the AIT. Therefore, it is a measure adopted or maintained by a party to the AIT.
52. The AIT does not contain a definition of the term “obstacle to internal trade”. The Tribunal must therefore rely on the rule of interpretation applicable in similar circumstances. In interpreting trade agreements, the Tribunal is mindful of Article 31(1) of the Vienna Convention on the Law of Treaties,34 which states as follows:
A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
53. This principle is consistent with the modern contextual approach to statutory interpretation, which holds that the words of an enactment must be read in their entire context and in their grammatical and ordinary sense harmoniously with the sections of the act, the object of the act and the intention of Parliament.35 Thus, Article 403 of the AIT must not be read in isolation, and its meaning must be ascertained in light of its entire context and the object and purpose of the AIT.
54. Le Nouveau Petit Robert defines the term “obstacle” (obstacle) as follows: “1 That which opposes passage, hinders movement” [translation].36 Nothing in this definition indicates that the effect of the obstacle must be absolute. In fact, there is nothing absolute in the representation of what can “hinder movement”. Thus, an obstacle may impair, restrict or hinder movement, without necessarily blocking or prohibiting it. This connotation seems implicit to the definition. According to its usual meaning, the term “obstacle” thus encompasses both a total prohibition and a partial restriction of the passage or movement of something.
55. It is clear from a reading of the term “obstacle to internal trade” that “internal trade” is the object of the obstacle, i.e. of the impairment of passage, movement or action caused by the subject measure. The preamble and Articles 100 and 101 of the AIT give indications on what constitutes internal trade. The preamble states that the parties to the agreement have resolved to promote “an open, efficient and stable domestic market” and “equal economic opportunity for Canadians”, and thus reduce “barriers to the free movement of persons, goods and services, and investments within Canada”. Article 100 provides that the parties have the obligation to eliminate barriers to the free movement of persons, goods, services and investments within Canada and to establish an open, efficient and stable domestic market. According to Article 101(1), the AIT applies to trade within Canada. Article 101(3) provides additional explanations in this regard. Paragraph 101(3)(a) indicates that the parties will not establish new barriers to internal trade and paragraph 101(3)(b) states that they will treat persons, goods, services and investments equally, irrespective of where they originate in Canada. According to paragraphs 101(3)(c) and 101(3)(d), the parties will reconcile their relevant standards and regulatory measures and their administrative policies to provide for the free movement of trade within Canada.
56. Article 501 of the AIT sets out the purpose of Chapter Five: “. . . to establish a framework that will ensure equal access to procurement for all Canadian suppliers . . . .” The term “Canadian supplier” is defined in Article 518 as a “[s]upplier that has a place of business in Canada”.
57. These provisions provide a useful context to determine the meaning of the term “internal trade” and, read together, lead to the conclusion that public procurement within Canada is a sub-category of “trade within Canada”, whereby the Government acquires supplies or obtains services from Canadian suppliers.37
58. Consequently, it is self-evident that, when it is used within the context of Chapter Five of the AIT, “obstacle to internal trade” means a measure that operates to create an obstacle or impair equal access by Canadian suppliers to procurement, since the stated purpose of Chapter Five is to ensure equal access to procurement. This interpretation of the term serves as the starting point of the Tribunal’s analysis.
59. However, because the issue here is to determine what constitutes an “obstacle to internal trade” with regard to procurement processes, this phrase must be interpreted to take into account the special provisions of Chapter Five of the AIT, which govern these matters. Indeed, these provisions are relevant for the purposes of defining the meaning and scope of the term “obstacle to internal trade” in this case, because they are clearly part of the context of Article 403. In the Tribunal’s opinion, these provisions influence therefore the scope that can be given to Article 403, as it must be interpreted and applied in the specific context of procurement. In this regard, Article 506(6) provides that the tender documents must clearly identify the requirements of the procurement and that a party may account for a supplier’s ability to meet the requirements of procurement in the evaluation of the bids. In other words, the federal government may impose conditions that may restrict access to procurement, to ensure that it obtains goods and services that meet its needs. Thus, in view of the provisions of Chapter Five, it is clear that the Government may impose conditions of participation in the tender procedures, which are essential to ensure that a supplier is able to meet the requirements of the subject procurement.
60. For this reason, the Tribunal cannot conclude that the requirement at issue constitutes an “obstacle to internal trade” for any firm unable to offer such equipment, simply on the basis of the fact that the requirement that the self-propelled trailing suction hopper dredge must necessarily have doors in the hull manifestly operates to prevent dredging service providers that are not equipped with such a dredge from offering their services in response to the invitation to tender. If such were the scope of Article 403 of the AIT, this would mean that any requirement in an invitation to tender, imposed by the Government to ensure that it obtains goods or services that meet its needs in accordance with the provisions of Chapter Five but which operates to limit access to procurement for certain firms, would become an obstacle to internal trade, which the Government would have to justify in each case pursuant to Article 404. This interpretation of Article 403 appears unreasonable.
61. If such were the scope of Article 403 of the AIT, simply by requiring, as it has done for several years, that the use of a self-propelled trailing suction hopper dredge be mandatory to perform the dredging in the North Traverse, excluding any other type of equipment, such as a gripping dredge, the federal government would be creating an obstacle to trade. Indeed, it is clear that the federal government thus bars access to the procurement for all firms that might perform maintenance dredging by means other than a self-propelled trailing suction hopper dredge. Therefore, in the Tribunal’s opinion, interpreting Article 403 without accounting for the Government’s needs would be unacceptable because a requirement which is clearly required for the federal government to obtain dredging services that meet its needs in the North Traverse, that is, the requirement to use a self-propelled trailing suction hopper dredge, which is not contested by Marissa, would then be inconsistent with Article 403. Therefore, in the Tribunal’s opinion, for procurement processes, the phrase “obstacle to internal trade” does not encompass all the measures that operate to limit access to procurement for certain suppliers.
62. Moreover, the Tribunal has stated repeatedly that the federal government has the right to define its procurement requirements, to the extent that they meet its operational requirements.38 The Tribunal’s jurisprudence also indicates that the Government is under no obligation to compromise its legitimate operational requirements to account for the special circumstances of a potential supplier or to meet suppliers’ needs.39 Moreover, the Tribunal has indicated that an invitation to tender is not necessarily discriminatory and may conform to the spirit of Article 501 of the AIT, even when the bidders are not on an equal footing when they participate in a bidding procedure. Some competitive advantages for certain suppliers over others may arise from the fact that a company holds a contract or intellectual property rights, or from other commercial factors.40
63. In view of these precedents, the Tribunal is of the view that Article 403 of the AIT must be interpreted to take into account the principle that procurement processes must seek to achieve a balance between the interest of the potential suppliers in benefiting from fair and transparent access to procurement opportunities and the interest of government institutions in obtaining the necessary goods and services. The Federal Court of Appeal recently stated, in Almon Equipment Ltd. v. Canada (Attorney General),41 that the purposes of the federal procurement system include (1) guaranteeing competitors a fair procurement system and (2) maximizing the probability that the Government will obtain high-quality goods and services that meet its needs.
64. Consequently, the Tribunal concludes that not all the conditions that restrict or hinder access to procurement for certain suppliers operate to create an obstacle to internal trade within the meaning of Article 403 of the AIT. If such were the case, government institutions would be prohibited, in principle, from imposing requirements that they consider essential to obtain goods or services corresponding to their needs, when these requirements operate to exclude the participation of certain suppliers in an invitation to tender. In the Tribunal’s opinion, the parties to the AIT cannot have envisaged such a result, and it cannot interpret Article 403 by giving it such a broad scope that it would prohibit the inclusion, in an invitation to tender, of conditions or requirements that otherwise conform to the provisions of Chapter Five and that reflect the Government’s legitimate operational requirements.
65. However, the Tribunal is of the view that government institutions must avoid discouraging potential bidders from participating fully in the procurement process or preventing them from doing so by imposing onerous or restrictive conditions that do not reflect their legitimate operational requirements. Therefore, the Tribunal finds that a requirement or a provision of an invitation to tender will operate to create an obstacle to internal trade if it does not constitute a legitimate operational requirement. The Tribunal finds that, in such a situation, the Government would restrict or impede access to procurement for Canadian suppliers in a manner that would be inconsistent with Article 403 of the AIT.
66. In view of its interpretation of the meaning and scope of Article 403 of the AIT in the context of procurement, the Tribunal must therefore examine whether the requirement of the invitation to tender that the equipment required to perform the dredging covered by the subject procurement must have doors in the hull is a legitimate operational requirement of the government institution. If such is not the case, it will have to conclude that this measure is inconsistent with Article 403.
67. In a previous case, the Tribunal stated the following regarding the issue of the legitimate operational requirements of a procuring entity:
The Tribunal has often stated, and Foundry agrees with that view, that procuring entities do not have to compromise their legitimate operational requirements to accommodate bidders. Nevertheless, in the Tribunal’s opinion, not all requirements can be qualified as “legitimate operational requirements”. Instead, the Tribunal is of the view that, when it is claimed that a function, a feature or any other requirement constitutes a “legitimate operational requirement”, the procuring entity must be able to demonstrate why such a function or feature is legitimately required to fulfil its needs and to achieve the targeted end result.42
68. In the Tribunal’s opinion, this demonstration has not been made in this case. On the contrary, the evidence indicates that this is the first time that PWGSC is imposing the contested requirement in the description of the mandatory characteristics of the dredge. The fact that, in the past, PWGSC did not consider it necessary to specify that the dredge required to perform the dredging in the North Traverse had to have doors in the hull suggests that the main characteristic of the equipment required to perform this work is to suction-dredge while moving, by means of trailing drag arms. Nothing in the evidence demonstrates that the circumstances have changed, from an operational point of view, in relation to the previous invitations to tender, such that the unloading of the dredged sediment by a single method, excluding all others, had become an essential requirement to perform the work within the deadline and obtain the desired final result. The evidence shows that, once a single-hull ship performs dredging operations with its drag arms while moving, the way the ship unloads the spoil does not change the nature of its dredging operations and does not affect their marine safety.
69. In this regard, although the evidence filed by PWGSC indicates that a self-propelled trailing suction hopper dredge often has doors in the hull, it does not establish that this attribute is a standard characteristic for this type of equipment. Indeed, the documents that were filed show instead that this type of dredge can unload sediment otherwise than through doors in the hull and that there are no generally accepted minimum standards in the industry that define the characteristics that a self-propelled trailing suction hopper dredge must have.43 The Tribunal also has already stated, on the basis of various definitions from sources in the field of navigation and marine dredging, that what characterizes a self-propelled trailing suction hopper dredge is its ability to dredge while moving freely, transport the dredged sediment aboard and unload it afterwards, without any reference to the presence of doors in the hull.44
70. Moreover, the Tribunal notes that the evidence filed by Marissa, as well as the testimony of Messrs. Lagacé and Blouin, indicates that the dredge proposed by Marissa, which is equipped with trailing drag arms, would be able to perform the work suitably and in accordance with the provisions of the invitation to tender and specifications and, in particular, could unload sediment at the prescribed disposal sites with great precision, has not been contradicted.45 In addition, Mr. Rochette, one of PWGSC’s witnesses, indicated that the requirement for doors in the hull had been added to respond to environmental concerns and not for reasons relating to security or to the dredge’s required seaworthiness characteristics.46
71. Therefore, after examining all the evidence, the Tribunal is not satisfied that the Government’s operational needs justified the limitation of the invitation to tender to suppliers that can offer a self-propelled trailing suction hopper dredge with doors in the hull.
72. Regarding PWGSC’s argument that Marissa, on the same basis as other potential suppliers, only had to invest in fitting one of its ships with doors in the hull to be able to submit a compliant proposal, the Tribunal points out that the definition of the term “obstacle” does not require that the obstacle to trade be absolute, but that it be sufficient, in theory, for a measure that is not a legitimate operational requirement, to “impair” access to procurement for it to be inconsistent with Article 403 of the AIT. As long as it has not been established that a mandatory requirement of an invitation to tender is a legitimate operational requirement, it is of little importance that the measure has not operated to prevent completely a potential supplier from bidding. An obstacle to trade is created once the measure operates to impair or hinder equal access to procurement by imposing an unjustified burden on certain potential suppliers. In this sense, a measure that disadvantages a potential supplier, without valid operational grounds, by forcing it to purchase equipment that it does not possess, so that it can have access to a procurement, remains a partial restriction of access to procurement and, consequently, an obstacle to internal trade.
73. In light of the foregoing analysis, the Tribunal finds that the requirement that the self-propelled trailing suction hopper dredge have doors in the hull operates to create an obstacle to internal trade within the meaning of Article 403 of the AIT and is therefore a breach of the obligation set out in this article.
Is the Requirement for Doors in the Hull Permitted according to Article 404 of the AIT?
74. As mentioned above, Article 500 of the AIT also provides for the application of Article 404 to the measures prescribed in Chapter Five. Consequently, Article 403 is subject to Article 404, which provides a defence that can be invoked by a government institution if it is determined that one of its measures breaches Article 403.
75. Article 404 (Legitimate Objectives) of the AIT provides as follows:
Where it is established that a measure is inconsistent with Article 401, 402 or 403, that measure is still permissible under this Agreement where it can be demonstrated that:
(a) the purpose of the measure is to achieve a legitimate objective;
(b) the measure does not operate to impair unduly the access of persons, goods, services or investments of a Party that meet that legitimate objective;
(c) the measure is not more trade restrictive than necessary to achieve that legitimate objective; and
(d) the measure does not create a disguised restriction on trade.
76. Therefore, it is necessary to examine whether, in the circumstances of this case, PWGSC can justify the existence of an obstacle to internal trade by meeting the conditions set out in Article 404 of the AIT.
77. It is clear, in view of the wording of Article 404 of the AIT, that all the conditions must be fulfilled for a measure to remain permissible, even if it is inconsistent with Article 403. It also seems clear that Article 404 is an exception to the obligation provided in Article 403 and that PWGSC has the burden of proving that these conditions are met.47
78. Consequently, to determine whether the contested requirement in the invitation to tender is permissible under Article 404 of the AIT, the Tribunal must first determine whether the evidence establishes that the four listed conditions have been met.
Article 404(a) of the AIT: Achievement of a Legitimate Objective
79. The first of these conditions is that the purpose of the measure is to achieve a legitimate objective. Section 200 of the AIT defines “legitimate objective” as any of the following objectives pursued within the territory of a party:
(a) public security and safety;
(b) public order;
(c) protection of human, animal or plant life or health;
(d) protection of the environment;
(e) consumer protection;
(f) protection of the health, safety and well-being of workers; or
(g) affirmative action programs for disadvantaged groups;
considering, among other things, where appropriate, fundamental climatic or other geographical factors, technological or infrastructural factors, or scientific justification.
80. The Tribunal notes that the Canadian Environmental Assessment Act and various federal regulations in force clearly require that an environmental assessment be performed before the performance of dredging operations in the North Traverse.48 In this instance, the environmental screening report prepared by Dessau serves as the environmental assessment required by the Act. In accordance with these requirements, this report covers, among other things, the environmental impact of the project and proposes solutions and preventive measures to minimize the potential environmental repercussions of this dredging.49 Within the context of this environmental screening and to ensure its compliance with the applicable laws and regulations, Dessau consulted the Department of the Environment (the expert department, particularly regarding management of dredged sediment), the Department of Transport, because the St. Lawrence Seaway falls under this department’s jurisdiction, and the Department of Fisheries and Oceans, because of the potential disturbance of the fish habitat that could be caused by maintenance dredging.
81. PWGSC submitted that the purpose of the requirement for doors in the hull is to achieve the legitimate objectives of statutory compliance and protection of the environment, because this criterion only implements the measures recommended by Dessau’s experts who, in view of the environmental constraints, consider that the dredge used for this work must be a self-propelled trailing suction hopper dredge with doors in the hull. For its part, Marissa submitted that nothing in Dessau’s environmental screening report expressly or implicitly links the relevant and recommended environmental protection measure, namely, open-water mass disposal of sediment, to the mandatory requirement for doors in the hull on the dredge used to unload the sediment.
82. In the Tribunal’s opinion, for the mandatory requirement for doors in the hull to have the purpose of achieving the legitimate objectives of animal and plant life or health protection, paragraph (c) of the definition of “legitimate objective” in Article 200 of the AIT, and protection of the environment, paragraph (d), the existence of a factual relationship or close connection between the contested measure of the invitation to tender and the solutions contained in Dessau’s report, which account for the environmental constraints of the project, must be demonstrated. This demonstration will be done to the extent that it is established that the contested mandatory requirement can be interpreted reasonably as having the purpose of implementing the recommendations of the environmental screening report.
83. The environmental screening report conducted by Dessau in 2010 clearly establishes the importance of mass unloading as a disposal technique to ensure the achievement of the environment protection objectives in general, as well as protection of the life and health of animal (fish) and plant species present in the marine space concerned.50 However, the report does not specify explicitly that this disposal technique requires the use of doors in the hull. PWGSC claims that the requirement for doors in the hull is a direct consequence of the necessity, according to the report, to dispose of sediment by the “mass descent” technique.
84. From the outset, it must be assumed that, in this appeal, the Tribunal must not rule on the relevance of the environmental considerations appearing in Dessau’s environmental screening report, and more specifically, on the necessity, from the environmental point of view, to dispose of accumulated sediment by using the mass disposal method. Moreover, this issue has not really been contested by the parties.
85. Indeed, even though Marissa alleged that its proposed dredge was capable of responding to the environmental concerns relating to disposal of sediment by removing it completely from the water for reuse as road construction materials, Dessau’s report clearly shows that moving sediment to land is not the recommended solution, due to the potentially harmful environmental effects of this sediment management method.51 The report instead concludes that due to “. . . various environmental economic and technical constraints, open-water disposal of the sediment that will be dredged . . . is the appropriate solution” [translation].52
86. Marissa seems to accept this recommendation. What it contested, in substance, is the existence of the relationship between the method of open-water mass disposal of sediment and the necessity, for this purpose, of using a dredge with doors in the hull. Marissa claimed that Dessau’s environmental screening report makes no mention of such a requirement and that the mandatory requirement for doors in the hull, added to the invitation to tender, cannot therefore be founded on considerations relating to compliance with environment protection, fisheries management and fish habitat laws and regulations. Marissa even submitted that the report does not exclude alternatives to the use of doors in the hull for open-water disposal of dredged sediment.
87. As mentioned above, the absence of a reference to the requirement for doors in the hull in Dessau’s environmental screening report is admitted by PWGSC. However, PWGSC submitted that, because it recommends the use of a self-propelled trailing suction hopper dredge for the performance of the work in the North Traverse and the use of the mass disposal method for unloading sediment, and in view of the fact that self-propelled trailing suction hopper dredges with doors in the hull have been used historically for this project, Dessau’s report necessarily implies, when it indicates that disposal of dredging sediment is possible with a self-propelled trailing suction hopper dredge, that the dredge in question must have doors in the hull. According to PWGSC, this is the only type of dredge that has been considered and approved concerning this particular sector.
88. In the Tribunal’s opinion, the evidence preponderantly shows that a close de facto relationship exists between the contested measure and the environmental considerations contained in Dessau’s environmental screening report. After carefully examining the contents of this report, the Tribunal considers, as does PWGSC, that it is implicit in the report that the self-propelled trailing suction hopper dredge recommended to perform the work must have doors in the hull to unload the dredged materials. Nothing in the evidence allows the Tribunal to doubt the assertions of PWGSC’s witnesses that the requirement for doors in the hull was added to achieve an environmental protection objective and that, in view of the history of maintenance dredging in the North Traverse, it is reasonable to conclude that, when the environmental screening report discusses the disposal of sediment by means of a self-propelled trailing suction hopper dredge, it is referring to disposal through doors in the hull.53
89. PWGSC’s submissions in this regard are substantiated by the contents of Dessau’s report. The description of the project concerning the North Traverse maintenance dredging contained on page 11 of Dessau’s environmental screening report indicates the following: “The second dredging period would be conducted from August 17 to October 10 in the North Traverse . . . . It is mandatory to use a trailing suction hopper dredge for the work. It would be extremely difficult (or almost impossible) for a gripping dredge to perform maintenance dredging in the North Traverse” [emphasis added, translation].
90. Section 2.1.5 of the descriptive part of the project deals with the type of dredges used and specifies the following: “A trailing suction hopper dredge has always been required and used for maintenance dredging in the North Traverse” [translation].
91. Section 2.2 pertains to the “alternatives and variants of dredged sediment management” [translation]. It is specified that, “[d]epending on the availability, needs, aptitudes and constraints of the environment and the degree of contamination, several management scenarios can be considered for disposal of dredged sediment. Open-water, on-shore or on-land disposal are possible. In all three cases, depending on the contamination level of the sediment, it will be possible to dispose of them freely (without protection or containment measures), contain them partially or ensure highly secure containment” [translation].54 In this last passage, it can be recognized that the sediment management mode will vary according to the sediment contamination level.
92. Open-water disposal is one of the management modes available. The following is specified in section 2.2.1.1 of Dessau’s environmental screening report, before concluding in section 2.3 that this management mode is the appropriate solution: “During dredged sediment disposal operations, measures must be adopted to limit the increase in the concentration of suspended matter as much as possible” [translation].55 It is also specified that, in the event that open-water disposal sites are used for a certain time, as is the case for the North Traverse, “. . . it is generally preferable to continue to use these sites, already disturbed by such activities. The dredged sediment can be disposed of directly through a pipeline, with a barge or with a self-propelled trailing suction hopper dredge” [translation].56 This passage makes a clear distinction among different disposal technologies. Thus, the use of a “pipeline”, a barge or a self-propelled trailing suction hopper dredge represents different disposal methods. This passage implicitly indicates that, in the spirit of the authors of the report, unloading sediment by means of a self-propelled trailing suction hopper is not accomplished by using a “pipeline” or a pipe.
93. Section 2.3.1 of Dessau’s environmental screening report indicates that the precise disposal choice was made after considering environmental constraints: “All the disposal sites are located at places where the bottoms have been qualified as stable and where the environment is least affected. Apparently, since 2009, it is no longer permissible to use disposal site X-01 located south of Île Madame in the North Traverse. This site was abandoned following studies . . . that showed that the annual disposal of sediment at this site reduced the production capacity of a major Atlantic sturgeon juvenile feeding area, located further downstream in Chenal Saint-Thomas. These same studies also led to restriction of the total volume of sediment disposal at site X-02 to 10,000 m3 . . . . Site X-03 (Sault-au-Cochon) is used for disposal of all other sediment dredged in the Seaway in the North Traverse” [translation].57
94. Part 3 of Dessau’s environmental screening report deals expressly with the environmental and animal and plant protection considerations. Section 3.5.4 specifically deals with these considerations in the North Traverse.
95. Part 4 of Dessau’s environmental screening report discusses the environmental impact. Section 4.1.2.2 deals expressly with the impact of the self-propelled trailing suction hopper dredge. It indicates the following: “An intensive monitoring program was carried out during the 1996 dredging in the North Traverse . . . . The results of this monitoring campaign indicate that the use of a self-propelled trailing suction hopper dredge has very little impact on water quality, whether during dredging or during open-water disposal of the sediment” [translation].58 This passage clearly indicates that recent history shows that this type of dredge was used and that findings were made regarding its impacts on the marine environment in the North Traverse, whether for dredging or disposal. No reference is made to any other type of dredge.
96. On the basis of these findings, the report concludes that “[t]he re-suspension caused by the dredging will therefore be relatively low and circumscribed. The impact on water quality can therefore be considered minor” [translation].59 It seems obvious, in this section, that the environmental impact in the North Traverse is related to the use of the self-propelled trailing suction hopper dredge only, both concerning dredging and disposal.
97. Section 4.2 of Dessau’s environmental screening report deals with the impact of open-water disposal. Section 4.2.3 discusses the impact on water quality. It explains fairly clearly that “mass descent”60 is the open-water disposal method that was the subject of the studies considered in the report. The method is described by way of a description and a diagram that shows the different stages and phases of performance of this method. The diagram (Figure 2) shows unloading of the dredge from the bottom, thereby suggesting the idea that the dredge has doors in the hull.61 The Tribunal also points out that this illustration does not show unloading through a pipe or a “pipeline”.
98. In itself, the foregoing does not necessarily allow the Tribunal to conclude that only this type of equipment was covered by the study but, when all the above factors are taken into consideration, the Tribunal must say that there is a strong indication that this is the case.
99. However, the determining factor in this regard is undoubtedly Dessau’s letter62 of February 23, 2011, filed together with the GIR, which very clearly indicates that additional technical studies would have to be performed if another unloading method were considered. The letter indicates the following: “Therefore, in the event that another sediment disposal mode is used, thus replacing the use of doors in the hull, it would be necessary to amend the environmental screening report according to this new method. Indeed, since the environmental screening report assesses the impact of open-water sediment disposal from a dredge with doors in the hull, it will be mandatory to review this entire analysis. This new analysis will have to be based on a complete review of the existing literature, as well as on conclusions drawn from technical studies conducted in different fields (current measurement, hydrosedimentary dynamics, tide gauge system, etc.) that would be specific to the sector covered by the work, allowing precise determination of the sediment dispersion mode using a pipe or a pipeline” [translation].
100. On the basis of the contents of this letter, the Tribunal finds that the environmental impact analysis of the use of the open-water sediment disposal method was performed, concerning the North Traverse, by only considering the use of a self-propelled trailing suction hopper dredge with doors in the hull. Consequently, in light of all the evidence examined above, it is clear that a strong factual relationship exists between the objective of compliance with environment, fisheries management and fish habitat laws and regulations and the requirement to use a dredge with doors in the hull to perform the work. In fact, the contested measure only reiterates a requirement considered environmentally acceptable by Dessau.
101. In other words, the evidence shows that the objective pursued by the measure was to ensure the establishment of the protection and prevention measures provided for in Dessau’s environmental screening report. As such, the Tribunal is convinced that the purpose of the requirement for doors in the hull was to pursue the legitimate objectives mentioned in paragraphs (c) and (d) of the definition of “legitimate objective” in Article 200 of the AIT. Therefore, the Tribunal finds that the “the purpose of the measure is to pursue a legitimate objective”, within the meaning of Article 404(a), and that the first condition of application of Article 404 is fulfilled.
Article 404(b) of the AIT: Absence of Undue Impairment
102. Article 404(b) of the AIT sets out the second condition of application of Article 404. For this condition to be fulfilled, PWGSC must demonstrate that “the measure does not operate to impair unduly the access of persons, goods, services or investments of a Party that meet the legitimate objective”. This condition clearly indicates to the Tribunal that it must examine, in this appeal, whether the contested measure operates to impair “unduly” the access of persons (potential suppliers) or of certain services to the procurement in question.63
103. In Port Weller Dry Docks, the Tribunal stated that “. . . the condition under Article 404(b) of the AIT should be interpreted as a safeguard against the establishment of a restrictive measure that creates an excessive impact.”64 According to the Tribunal, to meet the second condition, the contested measure must not operate to impair unduly the participation in the procurement process of a bidder that can achieve the targeted objectives of protection of the environment, or of its services. In other words, even if it is understood that a measure with the purpose of achieving a legitimate objective can operate to restrict a bidder’s participation in such a procedure, it must nonetheless allow the participation of potential bidders whose services meet this legitimate objective. Otherwise, the measure would excessively restrict participation in procurement and would therefore unduly impair internal trade. It is thus appropriate to examine whether the contested measure operates to exclude participation in procurement by bidders that can meet the Government’s legitimate objective.
104. In the case at hand, to meet the second condition of Article 404 of the AIT, the mandatory criterion of use of a dredge with doors in the hull must not impair access to procurement of persons or services of a party that meet the legitimate objectives of the measure. In short, the issue is whether the solution proposed by Marissa to perform the dredging in the North Traverse meets the above-mentioned legitimate objectives. Indeed, if it is demonstrated that this offer of services, which does not include the use of a dredge with doors in the hull, would allow the Government to achieve its legitimate objectives of protection of the environment, it would be necessary to conclude that the contested measure is an undue impairment within the meaning of Article 404(b).
105. The evidence does not make it possible to conclude that the dredged sediment unloading method proposed by Marissa meets the Government’s legitimate objectives. Indeed, Dessau’s and CJB Environment Inc.’s experts stated that additional technical studies would be required to measure the environmental impact if a pipe or a “pipeline” were used to unload the sediment. They also indicated that it would be necessary to review and amend the environmental screening report in the event of use of this new method.65 Moreover, as PWGSC noted, even Mr. Villeneuve’s letter, filed by Marissa, implies that the environmental impact of Marissa’s proposed disposal method is uncertain. The letter also does not indicate conclusively that the disposal mode in question would not be harmful or would not pose an increased risk to the environment.66
106. Moreover, during the hearing, Marissa’s witnesses admitted that the proposed sediment unloading mode probably had never really been studied in Canada and were unable to cite recognized sources to support their assertion that this method meets the relevant environmental standards.67 Thus, the Tribunal has no choice but to conclude that the environmental impact of the method proposed by Marissa is unknown and has never really been assessed. To meet the Government’s targeted objectives of protection of the environment, the unloading method proposed by Marissa must have been deemed acceptable in terms of environmental impact, or equivalent to sediment disposal through doors in the hull, which is obviously not the case.
107. Consequently, by not allowing Marissa and the dredging services that it proposes to have access to procurement, by requiring a dredge with doors in the hull, the contested measure does not operate to “impair unduly the access of persons . . . [or] services . . . of a Party that meet that legitimate objective”. Since the evidence does not establish that access of other persons or services that meet this legitimate objective was impaired by the contested measure, the Tribunal finds that the second condition of application of Article 404 of the AIT is fulfilled.
Article 404(c) of the AIT: Necessity of the Measure to Achieve the Legitimate Objective
108. Article 404(c) of the AIT provides the following: “the measure is not more trade restrictive than necessary to achieve that legitimate objective”. This wording clearly indicates that Article 404(c) concerns the examination of the impact of the measure on trade. However, unlike the condition of Article 404(b), the issue is not whether the measure impairs access to procurement of persons, goods, services or investments that meet the legitimate objective concerned, but rather whether, to achieve that legitimate objective, it was necessary for the Government to restrict trade to such an extent. In other words, to meet the condition set out in Article 404(c), the measure cannot have a scope that is broader than necessary to achieve the legitimate objective.
109. In the Tribunal’s opinion, the purpose of the different conditions set out in Articles 404(b) and 404(c) of the AIT, which both imply an examination of the impact of the measure, must not be confused, because it is reasonable to believe that the parties to the AIT did not agree to make these conditions redundant. Therefore, the Tribunal interprets Article 404(c) so as to avoid a possible overlap between these two conditions.
110. The Tribunal previously gave an overview of its interpretation of Article 404(c) of the AIT. In Port Weller Dry Docks, it stated that the criterion of Article 404(c) resembles that of the necessity of the “trade restrictive” test under Article XX of the GATT 1947 in respect of which the panel, in United States-Section 337 of the Tariff Act of 1930, stated as follows:
It was clear to the Panel that a contracting party cannot justify a measure inconsistent with another GATT provision as “necessary” in terms of Article XX(d) if an alternative measure which it could reasonably be expected to employ and which is not inconsistent with other GATT provisions is available to it. By the same token, in cases where a measure consistent with other GATT provisions is not reasonably available, a contracting party is bound to use, among the measures reasonably available to it, that which entails the least degree of inconsistency with other GATT provisions.68
111. In European Communities, Measures affecting asbestos and products containing asbestos,69 the Appellate Body of the World Trade Organization indicated that, to determine whether a measure was “necessary” within the meaning of Article XX of the GATT 1947, it was appropriate to examine whether an alternative measure was reasonably available and whether this other measure allowed the same objective to be achieved, while being less trade restrictive.
112. The Tribunal thus must examine the effect of the contested measure in this case and consider whether this impact is necessary, i.e. whether another, less trade-restrictive measure exists that would allow it to achieve the Government’s legitimate objective.
113. In this regard, it is important to mention that Marissa has made no submissions in this regard. Marissa’s argument is limited to saying that the requirement was unnecessary and that this impact, which bars Marissa from access to procurement, is excessive, given that there is no provision in Dessau’s environmental screening for any requirement concerning doors in the hull. The logical consequence of this argument is that it was unnecessary to require this mandatory characteristic, namely, that the dredge have doors in the hull to achieve the Government’s legitimate objective.
114. PWGSC submitted that the contested measure has almost no impact on trade, because the number of bids received in response to the invitation to tender shows a level of competition that was unprecedented and because the scope of the measure is limited to preventing dredging with an uncertain environmental impact. In view of the respective positions of the parties, is this level of restriction more than is necessary to achieve the objective of legislative and regulatory compliance regarding protection of the environment, fisheries management and fish habitat protection?
115. This issue must be determined in view of the factual context already considered. The dredging cannot take place unless there has been an environmental impact assessment of the projected work. The idea is that the assessment report must provide for the protective measures required for the purposes of protection of the environment in the setting concerned, which, in this case, is the North Traverse, measures that PWGSC must implement through the requirements of the invitation to tender. In short, the mandatory conditions of the invitation to tender can and even must account for the relevant environmental constraints.
116. Dessau’s environmental screening report took into account the data accumulated in previous years. As has been established, the protective measures provided implicitly for the use of a self-propelled trailing suction hopper dredge with doors in the hull. Dessau’s letter of February 23, 2011, indicates that any other unloading mode than the one covered by the study would have to be studied prior to the work. The Tribunal’s understanding of the regulatory framework applicable in this regard is also that any other unloading mode would have to be subjected to such a study. In other words, the study that allows performance of the work for the period covered by the invitation to tender does not approve any other unloading except unloading from a self-propelled trailing suction hopper dredge with doors in the hull. The use of this type of dredge is thus the only means by which, at this stage, PWGSC can ensure the performance of the dredging service within the required period, while achieving the objective of legislative and regulatory compliance regarding environment, fisheries management and fish habitat protection.
117. The Tribunal has no grounds to doubt Marissa’s claims that the sediment disposal method that it proposes meets the same requirement level in terms of environmental protection. However, this method has not been assessed within the meaning of the applicable law. Therefore, the Tribunal cannot be influenced by Marissa’s submissions in this regard for the purposes of its ruling. The question of the necessity of the measure and the existence of another measure that allows achievement of the results sought cannot be decided without taking into account the necessity of measuring the potential environmental impact of such an alternative measure. This is the heart of the matter. However, the preponderant evidence before the Tribunal indicates that this impact is unknown. Therefore, the Tribunal cannot conclude that the disposal method proposed by Marissa allows the achievement of the Government’s legitimate objectives.
118. Therefore, the evidence and all the facts taken into account above show that no other measure exists than doors in the hull to allow PWGSC to achieve its legitimate objectives, because no other measure has been subjected to an environmental assessment. Although theoretically possible, the method suggested by Marissa is not a possible and acceptable method, in view of the legislative restrictions that PWGSC had to take into account and the fact that it was established before the Tribunal that this unloading method could have environmental repercussions that go beyond the impact considered acceptable by Dessau’s and CJB Environment Inc.’s environmental screening reports. Neither can the Tribunal blame PWGSC for not having commissioned supplementary environmental studies to have the method proposed by Marissa validated in view of its legitimate objectives because, by Marissa’s admission, this was an “avant-garde” [translation] solution70 that had never been considered within the context of maintenance dredging in the North Traverse. Moreover, the Tribunal accepts PWGSC’s arguments that the deadline at the time of release of the invitation to tender and the beginning of the projects did not allow a new environmental assessment. Moreover, in the Tribunal’s opinion, PWGSC’s interpretation of its obligations pursuant to the applicable legislative and regulatory provisions was reasonable under the circumstances.
119. Therefore, the Tribunal finds that the requirement for doors in the hull does not restrict access to the procurement concerned by the invitation to tender more than is necessary to achieve the legitimate objective within the meaning of Article 404(c) of the AIT. This measure simply assures the Government that the dredging will be performed according to a proven method, for which the environmental impact is known and judged to be acceptable. PWGSC has therefore ensured that the measure is not more trade-restrictive than necessary. The third condition for the application of Article 404 is met.
Article 404(d) of the AIT: No Disguised Restriction on Trade
120. Article 404(d) of the AIT provides that “the measure does not create a disguised restriction on trade”.
121. The purpose of this condition is to determine whether the measure concerned creates a restriction on trade, without this being obvious or apparent at first glance. The idea of an unapparent or hidden restriction on trade is at the heart of this provision.
122. The Tribunal has no difficulty stating that the contested measure was obvious at first glance in reading the contents of the invitation to tender and was thus transparent. The clearest confirmation of this fact is how rapidly Marissa communicated with PWGSC to discuss the necessity of this requirement and to ask that it be removed. This clearly indicates that the restriction was obvious and was not a disguised measure. The wording of the requirement immediately indicates the scope of its effects, i.e. to limit access to the invitation to tender to the bidders capable of performing the dredging by means of a dredge with doors in the hull. In this sense, there cannot be here a “disguised restriction on trade”.
123. PWGSC submitted that, during consultations with the industry in September 2010, nobody had contacted it to propose another sediment disposal mode. According to PWGSC, if this had been done, the method proposed by Marissa could have been considered in a timely manner. Marissa alleged that the non-inclusion of the mandatory criterion at the time of publication of the pre-project notice showed an intention to hide PWGSC’s real intentions. Marissa submitted that it could not respond to the pre-project notice because it did not know that this major restriction would be added in the invitation to tender. In the Tribunal’s opinion, no evidence supports the allegation that PWGSC had a particular or malicious intention in omitting this criterion in publication of the pre-project notice. Similarly, the Tribunal holds that Marissa’s allegation that PWGSC deliberately produced misleading information when it published its pre-project notice is unfounded.
124. The Tribunal also notes that, although this was desirable, PWGSC had no obligation to include a mention of this criterion at this stage of the process. The objective of this notice was only to inform the dredging industry of the procurement strategy developed by PWGSC and the CCG for the performance of the maintenance dredging. Clearly, this notice did not seek to describe the mandatory requirements of the invitation to tender in detail. Consequently, it is the provisions of the invitation to tender that must be examined to determine whether the measure creates a disguised restriction on trade and, in the event of incompatibility between the invitation to tender and the pre-project notice, the invitation to tender must prevail.
125. Therefore, the fourth condition of application of the exception set out in Article 404 of the AIT is met.
126. The Tribunal finds that, although the contested measure operates to create an obstacle to trade in infringement of Article 403 of the AIT, it is permitted nonetheless, because the conditions applicable under Article 404 (Legitimate Objectives) are met.
127. In addition, the Tribunal considers it appropriate to reiterate the limits of its decision concerning Article 403 of the AIT. The Tribunal wishes to specify that it does not intend to indicate, by this decision, that any measure operating to limit access to procurements contemplated in Chapter Five automatically becomes an obstacle to trade and that PWGSC, in each procurement, will have to justify this measure pursuant to Article 404. There must not be any overlap between the specific and general disciplines prescribed in Chapter Five. The definition of obstacle to trade in Article 403 is so broad that it theoretically could embrace any kind of description of goods or services that operates to limit the nature of the goods or services contemplated by the procurement. Chapter Five contains specific disciplines that apply in such circumstances, like those on non-discrimination (Article 504) or on the conditions specific to goods and services applicable to procurement (Article 506). In the abstract, it appears unreasonable that a measure that would meet the requirements of these specific disciplines can be subject to the more general disciplines of Article 403 on the same basis and for the same alleged effects. In the Tribunal’s opinion, such an overlap in the disciplines cannot exist. It is the specific facts of a case, particularly the legitimate operational needs of the procuring entities, which allow the Tribunal to specify the respective fields of application of these specific and general disciplines of Chapter Five, on a case by case basis, in view of the specific circumstances of a complaint.
Is the Requirement for Doors in the Hull Discriminatory Within the Meaning of Article 504 of the AIT?
128. Articles 504(1) and (2) of the AIT generally prohibit discrimination between services and suppliers within the framework of a procurement process. Article 504(3) provides examples of measures that are inconsistent with Articles 504(1) and (2) and, specifically, provides the following:
3. Except as otherwise provided in this Chapter, measures that are inconsistent with paragraphs 1 and 2 include, but are not limited to, the following:
. . .
(b) the biasing of technical specifications in favour of, or against, particular goods or services, including those goods or services included in construction contracts, or in favour of, or against, the suppliers of such goods or services for the purpose of avoiding the obligations of this Chapter
129. To the extent that Marissa argues that PWGSC has discriminated against it or against its services by adding criteria requiring the use of a dredge with doors in the hull, the Tribunal finds that this allegation is unfounded. Indeed, Marissa’s assertions in this regard are not corroborated by the evidence. Indeed, contrary to Marissa’s claims, the evidence does not prove that the persons responsible at PWGSC knew the characteristics of the ship that Marissa intended to propose and that they drafted the technical specifications for the purpose of disadvantaging Marissa or preventing it from submitting a compliant proposal. On the contrary, PWGSC’s witnesses testified at the hearing that it was only after issuing the invitation to tender that they learned that Marissa’s ship did not have doors in the hull and that they had little knowledge about Marissa’s plans at the time of preparing the invitation to tender. Therefore, the Tribunal finds that it was not established that the subject requirement had been added with a view to eliminating Marissa from the process and that PWGSC discriminated against Marissa or its services.
130. In any event, even if this had been the case, Article 504 of the AIT is subject to Article 404 and, as mentioned previously, the Tribunal is satisfied that the conditions of application of Article 404 are met in this instance. Consequently, even if the measure were inconsistent with Article 504, it would still be permitted by the AIT under Article 404.
131. On the grounds stated above, the Tribunal finds that the requirement for a self-propelled trailing suction hopper dredge with doors in the hull meets the conditions prescribed in Article 404 of the AIT and, as such, is permitted under the AIT. Therefore, the Tribunal finds that the complaint is not valid.
Costs
132. The Tribunal awards PWGSC its reasonable costs incurred in responding to the complaint.
133. In determining the amount of the cost award for this complaint case, the Tribunal considered its Guideline for Fixing Costs in Procurement Complaint Proceedings (the Guideline), which contemplates classification of the level of complexity of cases on three criteria: the complexity of the procurement, the complexity of the complaint and the complexity of the proceedings.
134. The Tribunal’s preliminary indication is that this complaint case has a complexity level corresponding to the highest level referred to in Annex A of the Guideline (Level 3). The complexity of the procurement was high because it pertained to complex facilities and specialized services. The Tribunal finds that the complexity of the complaint was high because it pertained to an allegation that a specification was too restrictive, the examination of which required the consideration of a legislative framework and complex environmental studies. Finally, the complexity of the proceedings was high, as the Tribunal allowed the parties to present additional information going beyond the usual exchange of information outside the usual scope of the Tribunal’s inquiries. Moreover, the procedure required the use of the 135-day time frame to determine the validity of the complaint, and a public hearing was held.
135. Accordingly, as contemplated in the Guideline, the Tribunal’s preliminary indication of the amount of the cost award is $4,100.
DETERMINATION OF THE TRIBUNAL
136. Pursuant to subsection 30.14(2) of the CITT Act, the Tribunal determines that the complaint is not valid.
137. Pursuant to section 30.16 of the CITT Act, the Tribunal awards PWGSC its reasonable costs incurred in responding to the complaint, which costs are to be paid by Marissa. In accordance with the Guideline, the Tribunal’s preliminary indication of the level of complexity of this complaint is Level 3, and its preliminary indication of the amount of the cost award is $4,100. If any party disagrees with the preliminary indication of the level of complexity or the preliminary indication of the amount of the cost award, it may make submissions to the Tribunal, as contemplated in its Guideline. The Tribunal retains jurisdiction to establish the final amount of the award.
1 . R.S.C. 1985 (4th Supp.), c. 47 [CITT Act].
2 . 18 July 1994, C. Gaz. 1995.I.1323, online: Internal Trade Secretariat <http://www.ait-aci.ca/index_en/ait.htm> [AIT].
3 . Complaint at 4, para. 18.
4 . S.O.R./93-602 [Regulations].
5 . S.O.R./91-499 [Rules].
6 . PWGSC initially indicated that the information contained in its letter of March 30, 2011, was confidential. However, during the public hearing, PWGSC’s witnesses and its counsel stated that PWGSC had received five bids and that four of them offered equipment with doors in the hull. Transcript of Public Hearing, 20 April 2011, at 77, 103, 190-93; PWGSC’s additional submissions, Exhibit PR-2010-086-31 at 7, para. 20.
7 . Canada’s electronic tendering service.
8 . GIR, tab L.
9 . S.C. 1992, c. 37.
10 . Specifically, Marissa claimed that one of these advantages is that the dredged materials would not be released into the St. Lawrence River (except into the Seaway), but would be removed completely from the water for reuse as road construction materials.
11 . Complaint, Exhibit P-5.
12 . GIR, tab D.
13 . Transcript of Public Hearing, 20 April 2011, at 150-57.
14 . Marissa’s comments on the GIR at para. 15.
15 . Transcript of Public Hearing, 20 April 2011, at 161-63, 169-70.
16 . GIR at para. 37.
17 . GIR at para. 42.
18 . GIR, tab D at 85, 86.
19 . Re Complaint Filed by Computer Talk Technology, Inc. (26 February 2001), PR-2000-037 (CITT) at 11.
20 . GIR, tab D.
21 . GIR, tab L.
22 . PWGSC’s additional submissions at para. 6.
23 . GIR, tab H.
24 . GIR, tab I.
25 . Tribunal Exhibit PR-2010-086-28.
26 . In French, “Clause d’outillage flottant”. The FPC requires the Government of Canada to award dredging contracts to firms that use equipment made in Canada. If the floating plant is foreign-made, this can be accepted on condition that it has been Canadian-owned for at least one year and has been modified by a Canadian shipyard for a value greater than its acquisition price. PWGSC submitted that, following the 2008 invitation to tender, which denoted an unavailability of dredges conforming to the FPC, the Cabinet, in May 2009, approved a derogation from the FPC for a three-year period, namely, for the work in the years from 2009 to 2011. According to PWGSC, the dredging operations in 2009 and 2010 were therefore performed with a foreign-owned dredge that did not comply with the FPC. PWGSC submitted that, because the derogation from the FPC obtained in the spring of 2009 expired in 2011, it had estimated, in consultation with the industry, that the contractors would have to be granted an 18-month lead time to have Canadian equipment available in August 2012. PWGSC submitted that it is for this reason that it was necessary to award the contract for the work beginning in 2012 as soon as possible and that the deadline made it impossible to conduct a new environmental assessment.
27 . Re Complaint Filed by Port Weller Dry Docks, a Division of Canadian Shipbuilding & Engineering Ltd. (14 July 2003), PR-2003-007 (CITT) at 8 [Port Weller Dry Docks].
28 . GIR at para. 53.
29 . 2007 FCA 89 at para. 7 [Trust Business Systems].
30 . The North American Free Trade Agreement (NAFTA), the Agreement on Government Procurement (AGP), the Canada-Chile Free Trade Agreement (CCFTA) and the Canada-Peru Free Trade Agreement (CPFTA) do not apply to this procurement. Construction services relating to dredging contracts are excluded from the scope of Chapter 10 (para. 1 of Section B of Annex 1001.1b-3) of NAFTA, Section VI (Note 1 of Annex 5) of the AGP, Article Kbis-07 (para. 1 of Section B of Annex Kbis-01.1-5) of the CCFTA and Chapter 14 (para. 1 of Section B of Annex 1401.1-5) of the CPFTA.
31 . Article 501, “Purpose”.
32 . Article 500 of the AIT provides as follows:
. . .
2. For greater certainty, Articles 400 (Application), 402 (Right of Entry and Exit), 403 (No Obstacles), 404 (Legitimate Objectives) and 405 (Reconciliation) apply to this Chapter.
3. For the purposes of Article 504, the reference in Article 404 (Legitimate Objectives) to “Article 401” shall be construed as a reference to “Article 504”.
33 . Although the complaint does not contain an explicit allegation that the contested measure is inconsistent with Article 504 of the AIT, the Tribunal notes that Marissa maintained that the mandatory requirement for doors in the hull was added with a view to preventing it from bidding and thus sought to place it at a disadvantage. Marissa also maintained that this measure operates to render its ship unfit and to exclude it from the procurement process.
34 . (1969) 1155 U.N.T.S. 331, in force 27 January 1980.
35 . Re Complaint Filed by Georgian College of Applied Arts and Technology (3 November 2003), PR-2001-067R (CITT) at 4.
36 . 2009, s.v. “obstacle”.
37 . Northrop Grumman Overseas Services Corp. v. Canada (Attorney General), 2009 CSC 50, [2009] 3 RCS 309 at para. 25.
38 . Re Complaint Filed by Inforex Inc. (24 May 2007), PR-2007-019 (CITT); Re Complaint Filed by FLIR Systems Ltd. (25 July 2002), PR-2001-077 (CITT); Re Complaint Filed by Aviva Solutions Inc. (29 April 2002), PR-2001-049 (CITT).
39 . Re Complaint Filed by Eurodata Support Services Inc. (30 July 2001), PR-2000-078 (CITT); Re Complaint Filed by Bajai Inc. (7 July 2003), PR-2003-001 (CITT).
40 . Re Complaint Filed by CAE Inc. (7 September 2004), PR-2004-008 (CITT).
41 . [2010] F.C.J. No. 948.
42 . Re Complaint Filed by Foundry Networks Inc. (12 March 2002), PR-2001-048 (CITT) at 10.
43 . GIR, tabs E, F and G.
44 . Re Complaint Filed by Métro Excavation inc. and Entreprise Marissa inc. (5 November 1999), PR-99-016 (CITT).
45 . Transcript of Public Hearing, 20 April 2011, at 18-25, 41-48.
46 . Ibid. at 132-33.
47 . Trust Business Systems at para. 36.
48 . The legislative context and the legal framework regarding these dredging operations are described at pages 10-11 of the GIR. Marissa admits that it is mandatory for the CCG, as promoter of the St. Lawrence River maintenance dredging project, to commission an environmental assessment before the work is begun. Under the relevant regulatory provisions, the CCG must consult the federal authorities that may have a designated legislative or regulatory power or be an expert federal authority under the project.
49 . GIR, tab D.
50 . GIR, tab D at 85, section 4.2.3.
51 . GIR, tab D at 25.
52 . Ibid. at 29.
53 . Transcript of Public Hearing, 20 April 2011, at 133-38.
54 . GIR, tab D at 18.
55 . Ibid. at 18.
56 . Ibid. at 19.
57 . Ibid. at 29.
58 . Ibid. at 77.
59 . Ibid. at 78.
60 . Ibid. at 85.
61 . Ibid. at 86.
62 . GIR, tab H.
63 . Access to “goods” or “investments” is not at issue.
64 . At 8.
65 . GIR, tabs H, I.
66 . Exhibit PR-2010-086-28.
67 . Transcript of Public Hearing, 20 April 2011, at 58-60.
68 . 7 November 1989, BISD S36/345 at para. 5.26.
69 . EC—Asbestos, WT/DS135/AB/R, Appellate Body Report adopted on 5 April 2001 at para. 172.
70 . Complaint, Exhibit P-3 at 3.