File No. PR-2018-057 Autopos Marine Inc. d.b.a. AutoNav v. Department of Public Works and Government Services

Determination and reasons issued Wednesday, June 5, 2019

 

TABLE OF CONTENTS

DETERMINATION.. i

STATEMENT OF REASONS. 1

SUMMARY OF THE COMPLAINT. 1

PROCEDURAL BACKGROUND.. 1

TRADE AGREEMENTS. 3

RELEVANT PROVISIONS OF THE ACAN.. 3

POSITIONS OF THE PARTIES. 4

AUTONAV.. 4

PWGSC’S SUBMISSION.. 4

ANALYSIS. 5

1.     Was the Limited Tendering Justified Under the CFTA?. 5

2.     Did PWGSC Attempt to Avoid Competition?. 9

REMEDY.. 10

DECISION.. 11

 

IN THE MATTER OF a complaint filed by Autopos Marine Inc. d.b.a. AutoNav pursuant to subsection 30.11(1) of the Canadian International Trade Tribunal Act, R.S.C., 1985, c. 47 (4th Supp.);

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
AUTOPOS MARINE INC. d.b.a. AUTONAV	Complainant
AND
THE DEPARTMENT OF PUBLIC WORKS AND GOVERNMENT SERVICES	Government Institution

DETERMINATION

Pursuant to subsection 30.14(2) of the Canadian International Trade Tribunal Act, the Canadian International Trade Tribunal determines that the complaint is valid in part.

Ann Penner                             
Ann Penner
Presiding Member

Tribunal Panel:                                                Ann Penner, Presiding Member

Support Staff:                                                  Anja Grabundzija, Counsel
Heidi Lee, Counsel

Complainant:                                                   Autopos Marine Inc. d.b.a. AutoNav

Government Institution:                                   Department of Public Works and Government Services

Counsel for the Government Institution:          Ian McLeod
Roy Chamoun
Kathryn Hamill
Nick Howard

Please address all communications to:

The Registrar
Secretariat to the Canadian International Trade Tribunal
333 Laurier Avenue West
15th Floor
Ottawa, Ontario  K1A 0G7

Telephone: 613-993-3595
Fax: 613-990-2439
E-mail: citt-tcce@tribunal.gc.ca

 

STATEMENT OF REASONS

1.                  This inquiry concerns a complaint filed by Autopos Marine Inc. d.b.a. AutoNav (AutoNav) regarding an Advance Contract Award Notice (Solicitation No. F7049-180066/A) (the ACAN[1]) issued by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of Fisheries and Oceans and the Canadian Coast Guard (CCG) on November 28, 2018, with a closing date of December 14, 2018, for the provision of a replacement steering gear system for the CCGS Amundsen.

2.                  The Tribunal accepted the complaint for inquiry pursuant to subsection 30.13(1) of the Canadian International Trade Tribunal Act[2] and in accordance with the conditions set out in subsection 7(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations.[3]

3.                  The Tribunal conducted an inquiry into the validity of the complaint as required by sections 30.13 to 30.15 of the Act. For the reasons that follow, the Tribunal finds that the complaint is valid in part.

SUMMARY OF THE COMPLAINT

4.                  AutoNav claimed that PWGSC proceeded unjustifiably with the ACAN, and in so doing, acted contrary to its limited tendering obligations of the Canadian Free Trade Agreement.^[4] Specifically, AutoNav claimed that (1) the reasons of urgency stipulated in the ACAN did not amount to unforeseeable circumstances, as required by the trade agreement, and (2) Jastram Engineering Ltd. (Jastram), the preselected supplier pursuant to the ACAN, did not hold exclusive rights to the Wagner system as claimed by PWGSC.

5.                  AutoNav also alleged that PWGSC attempted to avoid competition by refusing to provide the statement of requirement (SOR), which set out the technical specifications for the good and was, according to AutoNav, necessary to adequately respond to the ACAN. It further submitted that the mandatory requirements included in the ACAN were overly stringent.

6.                  As a remedy, AutoNav requested that the contract to Jastram be cancelled and the project retendered. AutoNav neither requested compensation nor its complaint costs.

PROCEDURAL BACKGROUND

7.                  On November 23, 2018, PWGSC published the ACAN at issue for a replacement steering gear system (also known as a “refit”) for the Wagner system on board the Amundsen. As noted above, it identified Jastram as the preselected supplier on the grounds of exclusive intellectual property rights and noted that the refit was urgently required. The ACAN also invited other potentially qualified suppliers to submit a statement of capabilities on the basis of its mandatory requirements.[5]

8.                  On December 1, 2018, AutoNav informed PWGSC of its intent to submit a statement of capabilities, claiming that it was fully qualified and able to provide the refit. AutoNav also contested PWGSC’s stated claim in the ACAN that Jastram was the only potential supplier, arguing that Jastram did not hold exclusive rights to the Wagner system.

9.                  In response, PWGSC noted that it was in receipt of documents showing that Jastram held the intellectual property rights to the Wagner system. PWGSC also noted that it had undertaken several contracts with Jastram for the refurbishment of other Wagner steering gear parts and the complete overhaul of the steering gear system aboard another icebreaker, the CCGS Pierre Radisson; in its view, these contracts further demonstrated Jastram’s exclusive rights to the Wagner system.

10.              In the following days, AutoNav requested the SOR on the basis that the ACAN contained insufficient technical information to enable it to respond to the requirements. PWGSC declined to provide it and informed AutoNav that the SOR was not necessary; it also stated that the mandatory requirement of the ACAN that suppliers demonstrate compliance with the SOR had been lifted.[6] In this correspondence, PWGSC also informed AutoNav that the intent of the ACAN was “not to develop a new steering gear system but to verify if you have, or not, already designed, delivered and installed the same class approved steering gear system that you intend to provide as a response to this ACAN, as a prime contractor, by giving two (2) examples of successfully completed projects within the last ten (10) years.”[7]

11.              On December 12, 2018, AutoNav submitted a statement of capabilities to the ACAN, in which it reiterated its view that it was unable to respond fully to the requirement without the SOR.

12.              On December 14, 2018, PWGSC informed AutoNav that its statement of capabilities failed to meet the mandatory requirements of the ACAN and rejected its challenge to the limited tender. In response, AutoNav disputed PWGSC’s findings, again on the basis that it was unable to respond to the mandatory requirements without the SOR.

13.              On December 18, 2018, AutoNav objected to PWGSC.

14.              On January 17, 2019, PWGSC awarded the contract to Jastram and published the contract award the following day.

15.              On January 21, 2019, AutoNav filed the present complaint with the Tribunal. On January 25, 2019, the Tribunal informed the parties that it had accepted the complaint for inquiry.

16.              On March 8, 2019, PWGSC provided its response to the complaint in its Government Institution Report (GIR). AutoNav provided its comments on the GIR on March 18, 2019.

17.              Pursuant to a request by the Tribunal for clarifications on points made in the GIR and PWGSC’s position on remedy, PWGSC made further submissions on March 29, 2019, and AutoNav provided its comments on those submissions on April 8, 2019.

18.              The Tribunal did not consider an oral hearing necessary and therefore made its determination based on the written record.

TRADE AGREEMENTS

19.              As noted, the trade agreement applicable to this procurement is the CFTA. The CFTA allows limited tendering only in specified circumstances. In this case, the relevant provisions are as follows:

Article 513: Limited Tendering

1.     Subject to paragraphs 2 and 3, and provided that it does not use this provision for the purpose of avoiding competition among suppliers or in a manner that discriminates against suppliers of any other Party or protects its own suppliers, a procuring entity may use limited tendering in the following circumstances:

. . .

(b)     if the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute goods or services exist for any of the following reasons:

. . .

(ii)   the protection of patents, copyrights, or other exclusive rights;

. . .

(d)     if strictly necessary, and for reasons of urgency brought about by events unforeseeable by the procuring entity, the goods or services could not be obtained in time using open tendering;

Article 521: Government Procurement – Specific Definitions

For the purposes of this Chapter:

. . .

limited tendering means a procurement method whereby the procuring entity contacts a supplier or suppliers of its choice;

. . .

open tendering means a procurement method whereby all interested suppliers may submit a tender.

RELEVANT PROVISIONS OF THE ACAN

20.              The relevant provisions of the ACAN at issue are as follows:

2. Background

. . .

The replacement of the existing system is urgently required in order to maintain critical icebreaking services in the St-Laurence Seaway and the Great Lakes region.

The existing steering gear system found on this class of vessel is over 35 years old and has become difficult to maintain during the past years due to parts obsolescence.

. . .

3. Definition of the Requirement

The CCG has a requirement to replace the existing steering gear system currently installed on the CCGS Amundsen by a new, class approved system that will meet all the mandatory requirements detailed in section 4 below. . . .

4. Mandatory Criterias for assessment of the Statement of Requirement

a) The proposed steering gear system shall already be approved, by the closing date of this ACAN, by a classification society that is recognized by Transport Canada Marine Safety (TCMS) . . . .

b) Suppliers must provide objective evidence of their ability to design, deliver and install the same class approved steering gear system that they intend to provide as a response to this ACAN, as a prime contractor, by giving two (2) examples of successfully completed projects within the last ten (10) years. . . .

Definition of “completed project”: Design, delivery and installation of a steering gear system for vessels of at least the same tonnage or greater, than the Pierre Radisson. To be valid, each of the steering gear systems provided as reference must be currently installed in a vessel of at least the same tonnage, or greater, than the Pierre Radisson and for vessels operating in ice breaking conditions, using the same equipment that they intent [sic] to provide for this project.

. . .

7. Justification for the Pre-Selected Supplier

Intellectual Property (IP) rights. Jastram currently owns all IP rights to the Wagner designed steering gear system that is currently installed in the vessel and will not share any technical information with another supplier.

POSITIONS OF THE PARTIES

AUTONAV

21.              As noted above, AutoNav claimed that the reasons of urgency relied on in the ACAN were not justified under Article 513(1)(d) of the CFTA. The ACAN stipulated that the requirement was urgent because the Amundsen provides critical ice-breaking services, and that the equipment is over 35 years old and approaching obsolescence. Neither of these, AutoNav argued, were valid urgent circumstances.

22.              AutoNav also claimed that the preselected supplier, Jastram, did not hold exclusive intellectual property rights to the Wagner engine system. AutoNav argued that there was nothing proprietary about the systems which Jastram may have delivered in the past and that none of the Wagner steering components were patented.[8]

23.              AutoNav further submitted that PWGSC attempted to avoid competition by (1) refusing to provide the SOR, which AutoNav argued precluded it from submitting a responsive statement of capabilities, and (2) by crafting overly stringent mandatory requirements that aimed to exclude other capable suppliers.

PWGSC’S SUBMISSION

24.              As background to the ACAN, PWGSC explained that the CCGS Amundsen is one of CCG’s fleet of four 1200 Class icebreakers.[9] Because the fleet did not include any surplus vessels and must be operational year-round, the maintenance and repair had to be tightly scheduled.[10] Furthermore, it noted that in 2012, CCG announced its Vessel Life Extension (VLE) program, and by 2015, CCG developed a plan to refit the 1200 Class vessels with a new steering system.^[11]

25.              In 2016, PWGSC awarded a contract pursuant to a competitive procurement to refit the CCGS Pierre Radisson, one of the other 1200 Class icebreakers (the 2016 Contract). Following the outcome of the 2016 Contract, CCG determined that the need to refit the 1200 Class icebreakers had become high risk to, and thereby urgent for, CCG operations,^[12] and that it required delivery of a steering system before any such risks materialized.^[13] CCG, therefore, determined that its operational requirement could only accommodate a tried-and-tested system that had already been certified by a classification society and successfully installed on ice-breaking vessels of the same tonnage or greater than the CCGS Pierre Radisson.

26.              Accordingly, PWGSC submitted that the two grounds for proceeding with an ACAN, and subsequently awarding a contract to Jastram without an open tender, were legitimate and in accordance with the CFTA. It knew of only one firm – Jastram – with a tried-and-tested system as it held exclusive rights as the Original Equipment Manufacturer of the existing Wagner system aboard the Amundsen, and proceeded by way of an ACAN to confirm its position.^[14] Further, CCG had a bona fide operational urgency which justified the requirement for stringent technical and experience requirements.[15] It argued that while either ground would be sufficient to justify the limited tendering in this case, the two justifications should be read together.[16]

27.              PWGSC also submitted that AutoNav’s statement of capabilities provided no indication that it had a steering system which met CCG’s mandatory requirements as set out in the ACAN.[17] It maintained that the ACAN was sufficient in and of itself for AutoNav to prepare a responsive statement of capabilities, as it contained CCG’s mandatory requirements, and only required demonstration of a supplier’s own prior experience and certifications.[18]

ANALYSIS

28.              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 provides that the Tribunal is required to determine whether the procurement was conducted in accordance with the applicable trade agreements, in this case, the CFTA.

29.              The Tribunal will proceed in its analysis by considering whether (1) the limited tendering was justified under the CFTA on the basis of an unforeseen urgency or exclusive rights, and (2) PWGSC attempted to preclude competition by refusing to provide the SOR to AutoNav and by applying overly stringent mandatory requirements.

1.      Was the Limited Tendering Justified Under the CFTA?

30.              Under the trade agreements, competitive solicitations are the norm and limited tendering procedures are the exception. The Tribunal has long stated that limited tendering exceptions in trade agreements should be read narrowly. Accordingly, the threshold for the successful challenge of a sole-source procurement or limited tendering procedure is relatively low. A complainant need not demonstrate the case for a competitive solicitation. Rather, the complainant need only present evidence to suggest that a limited tendering procedure was not justified.

31.              Where such evidence is presented, the onus falls on the government institution to show that use of a limited tendering procedure is appropriate, both in fact and in law. The Tribunal has also held that ACANs should not replace the process of open competition in the selection of suppliers, nor should they be treated as flexible, more expeditious means of running or attempting to run a competitive procurement process.

32.              With these principles in mind, the issue before the Tribunal is to determine whether the ACAN and ensuing directed contract to Jastram was justified under Article 513 of the CFTA on either of the two grounds identified by PWGSC: (1) unforeseen urgency, or (2) exclusive rights.

33.              As will be discussed below, the Tribunal finds that PWGSC did not meet its burden for either of the two grounds. While PWGSC’s objective may have been legitimate from an operational point of view, the Tribunal finds that PWGSC nevertheless failed to provide evidence to substantiate its rationale for invoking the limited tendering provisions of the CFTA instead of proceeding with an open competition.

Unforeseeable Urgency

34.              Article 513(1)(d) allows limited tendering “if . . . for reasons of urgency brought about by events unforeseeable to the procuring entity, the goods or services could not be obtained in time using open tendering.”^[19] The Tribunal has previously stated that this exception requires the government institution to show both that there was urgency preventing the use of open tendering procedures and that it was caused by unforeseeable events.^[20]

35.              As noted above, clause 2 of the ACAN provides that the refit was urgently required in order to maintain critical ice-breaking services and notes that the existing system, at over 35 years old, was difficult to maintain due to parts obsolescence. In its submissions, PWGSC also argued that the outcome of the 2016 Contract was an unforeseeable event which contributed to CCG’s urgent operational need to procure the new system.

36.              While the Tribunal accepts that the outcome of the 2016 Contract may have contributed to CCG’s operational needs, the Tribunal is not persuaded, based on the evidence, that the CGG’s needs were urgent and unforeseen, within the meaning of Article 513(1)(d). CCG identified a plan to refit the 1200 Class icebreakers with new steering systems as early as 2015, as they were fitted with equipment in excess of 30 years old. Furthermore, CGG would certainly have known of the importance of keeping the Amundsen operational as it is one of four vessels that routinely and regularly undertake vital ice-breaking services. The Tribunal is therefore not persuaded that either justification set out in the ACAN amounts to an unforeseen urgency.

37.              That said, even if PWGSC had presented evidence to justify why and how CCG was facing an unforeseen urgency, the Tribunal finds that PWGSC did not demonstrate why it could not procure the refit in a timely manner by open tendering. The CFTA makes it clear that this is a necessary condition for an urgent situation to fall within the ambit of Article 513(1)(d) and to justify going down the path of limited tendering under that provision.

38.              In the Tribunal’s view, PWGSC’s submissions explain that the operational circumstances flowing from the 2016 Contract dictated the type of good CCG was able to consider, that is a modern, class-approved “tried-and-tested steering” system. However, the Tribunal finds that this explanation is insufficient to discharge PWGSC’s burden to justify the use of limited tendering under Article 513(1)(d). While the Tribunal accepts that the circumstances may have required CCG to procure a highly specific and stringently defined good, PWGSC failed to demonstrate how this requirement could not be procured in time using open tendering, as required by the applicable provision.

39.              Furthermore, the Tribunal finds there is insufficient evidence or specific argument to suggest that CCG’s requirement could not be properly defined, without compromising its legitimate operational needs, in an open procurement, while appreciating that an open tender might necessarily have taken longer than a limited one (a point, the Tribunal notes, that PWGSC did not address).[21]

40.              The Tribunal has previously stated, and reiterates here, that a properly conducted competitive procurement that reflects the true operational and technical requirements of a government institution should not result in compelling the government institution to procure equipment that does not meet its needs.[22] Furthermore, a procuring entity is entitled to define its own procurement needs provided that it does so reasonably and in compliance with the rules of the applicable trade agreements. The Tribunal has also previously held that a procuring entity may impose conditions that may restrict access to procurement to ensure that it obtains goods and services that meet its needs, and 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.[23] In that regard, PWGSC affirmed that open tendering procedures allow a procuring entity to impose certain conditions for participation of suppliers, including a supplier’s prior experience, legal capacity and commercial and technical abilities, so long as the conditions form part of the essential requirements to undertake the procurement.[24] Nevertheless, there must be a sufficient and demonstrated rationale for proceeding in such a manner.

41.              Therefore, the Tribunal finds that PWGSC did not demonstrate how and why the circumstances leading to the ACAN fell within the narrow parameters of Article 513(1)(d) of the CFTA. Accordingly, it can only conclude that the limited tendering is not justified under this provision, and that AutoNav’s complaint is valid in this regard.

Exclusive rights

42.              Article 513(1)(b)(ii) provides that limited tendering is permitted where there is only one supplier and no reasonable alternatives due to reasons of “the protection of patents, copyrights, or other exclusive rights.” As noted above, the Tribunal has previously expressed the view that this exception, as all limited tendering exceptions, should be applied narrowly. In this regard, PWGSC submitted that the existence of exclusive rights does not automatically justify a directed contract – rather, the government entity must be satisfied that the exclusive rights justify a directed contract on the basis of technical requirements or operational risks.^[25]

43.              For the reasons below, the Tribunal finds that PWGSC did not meet its burden to demonstrate that the limited tendering in this case is justified under this provision.

44.              As noted above, clause 7 of the ACAN identified Jastram as the preselected supplier because it owned all intellectual property rights to the Wagner engine system and was unwilling to share any technical information with other suppliers. On this basis, PWGSC asserted that no other supplier could provide the refit because Jastram held exclusive rights to the Wagner system.

45.              However, even accepting clause 7 to be factually true, the Tribunal finds that PWGSC did not demonstrate that Jastram was the only potential supplier. Indeed, the fact that in 2016, PWGSC awarded the replacement contract for the Pierre Radisson, which also uses a Wagner engine system, to a company other than Jastram suggests to the Tribunal that there is no link between Jastram’s alleged rights in the existing Wagner system and the availability of other suppliers for a replacement system. PWGSC did not explain how Jastram’s exclusive rights applied to the refit of the Amundsen but not to one for the Pierre Radisson.^[26] The Tribunal therefore finds that PWGSC failed to demonstrate that there was only one supplier and that no reasonable alternatives existed due to Jastram’s exclusive rights in the Wagner engine system and its unwillingness to share any technical information with other suppliers.

46.              Both AutoNav and PWGSC made significant submissions on whether or not Jastram, in fact and in law, held any exclusive rights in the Wagner system aboard the CCGS Amundsen. Based on the evidence submitted by PWGSC and the requirement of the applicable trade agreement provision, the Tribunal also finds that it was not reasonable for PWGSC to conclude that in the circumstances, Jastram was the only potential supplier and no reasonable alternative existed due to the protection of Jastram’s exclusive rights in the Wagner system.

47.              In particular, the Tribunal notes that PWGSC only received the document it relied on as proof of Jastram’s exclusive rights after issuing the ACAN, and that PWGSC did not explain how this document confirmed Jastram’s exclusive rights to provide a refit of the Amundsen.[27] Before issuing the ACAN, PWGSC had limited evidence in hand that demonstrated Jastram’s rights to the Wagner system. For example, PWGSC pointed to one document that merely contains a brief one-sentence assertion by an interested party as evidence. It also highlighted other documents which were, in some cases, unsolicited proposals from Jastram which referred to Wagner Engineering design and components. In the Tribunal’s view, these documents do not provide a sufficient basis for PWGSC to reasonably conclude that Jastram held exclusive rights to the extent that it was the only supplier able to supply the refit. The Tribunal also notes that PWGSC did not explain how this evidence demonstrates Jastram’s exclusive rights to provide a refit of the Amundsen.

48.              As noted in the previous section, PWGSC’s submissions and evidence explain why, in the circumstances it found itself in in the wake of the 2016 Contract, the CCG determined it was only able to consider a modern, class-approved “tried-and-tested steering” system. However, these submissions fall short of establishing a link between any exclusive rights that Jastram may have held and the ability to provide the refit. As such, the evidence does not establish that, in accordance with Article 513(1)(b)(ii), the limited tendering was permitted because there is only one supplier and no reasonable alternatives due to reasons of “the protection of patents, copyrights, or other exclusive rights.”

49.              In summary, the Tribunal finds that the complaint is valid on the basis that the evidence on the record is insufficient to show that the limited tendering was permitted under the two specific grounds invoked by PWGSC, namely, the existence of exclusive rights or of unforeseeable urgency.

2.         Did PWGSC Attempt to Avoid Competition?

50.              As stated above, AutoNav also claimed that PWGSC attempted to avoid competition by refusing to provide the SOR (which it alleged was necessary to successfully respond to the ACAN), and by applying overly stringent essential requirements.

51.              On the evidence before it, the Tribunal does not find this ground of complaint to be valid.

52.              Evidence indicates that PWGSC explained to AutoNav that the mandatory requirements of the ACAN were solely aimed at confirming whether other potential suppliers had the requisite prior experience and certifications on similar recent projects.[28] In other words, the mandatory requirements of the ACAN, as communicated by PWGSC to AutoNav, did not solicit a detailed technical solution for the Amundsen.[29] The Tribunal notes that this point was communicated to AutoNav during the parties’ correspondence before AutoNav submitted its statement of capabilities. As such, while AutoNav was limited in its ability to respond with a detailed technical solution, no additional information, such as the SOR, was required to respond to the ACAN. The Tribunal, therefore, accepts PWGSC’s submissions that the ACAN did not preclude competition, but simply lowered the threshold and made it easier for a potential supplier, including AutoNav, to demonstrate its capability.

53.              As for the stringency of the mandatory requirements themselves,[30] the Tribunal is satisfied that the GIR reasonably supports their application in the circumstances, which involved sensitive operational requirements to ensure crew and ship safety, and ultimately, the safety and security of Canada’s waterways, and to avoid severe consequences to CCG vessel maintenance.[31] Furthermore, as stated above, a procuring entity is entitled to define its procurement needs. In particular, the CFTA specifically allows for the application of conditions of participation that are essential to ensure that a supplier has the requisite legal, commercial and technical capacity, as well as the relevant prior experience, to undertake the procurement.[32] In this case, there is no evidence to suggest that the stated requirements were unreasonable. Accordingly, this ground of complaint is invalid.

REMEDY

54.              Having found the complaint to be valid in part, the Tribunal, pursuant to subsection 30.15(2) of the Act, “may recommend such remedy as it considers appropriate.” In doing so, the Tribunal must consider all the circumstances relevant to the procurement in question, including (1) the seriousness of any deficiency found by the Tribunal, (2) the degree to which AutoNav and other interested parties were prejudiced, (3) the degree to which the integrity and efficiency of the competitive procurement system were prejudiced, (4) whether the parties acted in good faith, and (5) the extent to which the contract was performed.[33]

55.              AutoNav requested that the designated contract be cancelled and the requirement be retendered. PWGSC submitted that, should the Tribunal find the complaint valid notwithstanding its submissions, the appropriate remedy would be compensation for lost opportunity to profit on the primary contract, and that given the “significant operational risks now facing the CCG and the immediate need for the steering gear system”, as described in the GIR, the Tribunal should not recommend cancellation and re-tender. In reply, AutoNav denied that the steering gear system was in immediate danger of failure and submitted that the requirement should proceed to open tender. AutoNav also indicated that it was not requesting compensation or costs of any kind.

56.              The evidence on record indicates that the contract was awarded on January 17, 2019. In the Tribunal’s view, CCG had legitimate operational concerns and there is no question that the Amundsen requires a refit of its decades’ old equipment. While those legitimate operational concerns do not fall within the limited tendering provisions of the CFTA, as determined above, the Tribunal does not, however, consider it appropriate to recommend a remedy that would disrupt the contract already in place and delay the refit once more.

57.              Furthermore, while failing to proceed to an open tender without a proper justification under the applicable trade agreement is a serious breach, in this case, any prejudice flowing therefrom is mitigated on the facts. The Tribunal cannot ignore the evidence on the record indicating that AutoNav failed to provide evidence of its capability to satisfy the mandatory requirements of the ACAN. Rather, the evidence confirms PWGSC’s submissions that AutoNav failed to meet the mandatory requirements of the ACAN in that it did not demonstrate the necessary prior experience and certifications.^[34] Specifically, AutoNav did not demonstrate that it had the requisite experience as a prime contractor on at least two relevant projects, over the last 10 years.[35] As such, in light of the evidence on the record, the Tribunal cannot conclude whether AutoNav would have been capable of supplying this requirement.

58.              The evidence does not indicate that any party acted in bad faith.

59.              On a balance of the foregoing considerations, in the particular circumstances of this case, the Tribunal does not consider that the interests of fairness and efficiency, or the general public’s interest in the integrity and efficiency of the competitive system, require recommending a remedy in this case. The Tribunal however urges PWGSC to take measures to ensure that it will conduct future procurements in strict adherence to the requirements of the applicable trade agreements.

60.              Finally, despite AutoNav’s partial success in this complaint, the Tribunal cannot award AutoNav any costs as AutoNav did not request them.[36]

DECISION

61.              The complaint is valid in part.

Ann Penner                             
Ann Penner
Presiding Member