Judgments

A-687-97

Attorney General of Canada (Applicant)

v.

Symtron Systems Inc. (Respondent)

and

Canadian International Trade Tribunal (Intervener) 

A-700-97

I.C.S. International Code Fire Services Inc. (Applicant)

v.

Symtron Systems Inc. (Respondent)

and

Canadian International Trade Tribunal (Intervener) 

Indexed as: Canada (Attorney General)v. Symtron Systems Inc. (C.A.)

Court of Appeal, Stone, Linden and McDonald JJ.A. "Ottawa, December 1 and 2, 1998, February 5, 1999.

Foreign Trade — NAFTA — Government procurement contracts — DND, government agency contracting out for Fire Fighter Training System — RFP containing mandatory qualification requirement — Agency awarding contract to applicant, an Ontario company — Respondent, unsuccessful American bidder, filing first complaint regarding procurement process — Alleging in second complaint mandatory qualification not met — CITT making decisions on each complaint — Under NAFTA, —any aspect— of procurement process open to challenge — Tribunal's recommendations should be implemented —to the greatest extent possible— — Contract let by DND through agency, subject to NAFTA — Parties may not design procurement contracts to avoid NAFTA obligations — Tribunal correct on merits.

Administrative law — Judicial review — Certiorari — Applicants challenging CITT's decisions on complaints made by unsuccessful bidder for government procurement contract — Tribunal deciding: (1) mandatory qualification requirements of request for proposals improperly applied, (2) —extended— procurement process not conducted in accordance with NAFTA as consultant not given entire text of Tribunal's findings with respect to original complaint — CITT having wide latitude when deciding on legal, factual matters within jurisdiction — Standard of review one of correctness — Tribunal not functus officio regarding second complaint — Decisions made by CITT different determinations based on different legal considerations — Second decision not patently unreasonable on merits.

In these two applications for judicial review, the applicants contended that the Canadian International Trade Tribunal (CITT) exceeded its jurisdiction by seeking in a second decision to implement its prior decision. In 1996, the Department of National Defence (DND) and a government agency, Defence Construction Canada (DCC) contracted out for a Fire Fighter Training System, a computer-run facility used to train fire fighters. The request for proposals (RFP) by which the procurement process was started contained one key mandatory qualification requirement: the successful completion of a propane fuelled computer controlled fire fighter training system with a value of C$1,000,000. The contract was awarded to I.C.S. International Code Fire Services Inc. (ICS), one of the applicants herein. Symtron Systems Inc., respondent in both applications and one of the unsuccessful bidders, filed a complaint regarding the procurement process. In response to that complaint, the CITT made a first decision to the effect that DCC had improperly applied the minimum mandatory qualification requirements and recommended that DCC re-evaluate Symtron's and ICS' proposals to determine whether they complied with those requirements. DCC implemented the Tribunal's recommendation in hiring a consultant to evaluate whether Symtron and ICS met the minimum criteria required by the contract. According to the consultant's report, both companies met the criteria. Shortly after, Symtron filed a second complaint alleging that ICS had not met the minimum mandatory qualification as provided in the RFP and that DCC improperly instructed its consultant by providing it with only the last two pages of the findings of the Tribunal, rather than the entire text. That lead to a second decision of the CITT in which the Tribunal ruled that the "extended" procurement process was not conducted in accordance with the North American Free Trade Agreement (NAFTA) and concluded that ICS' position as a qualified supplier was still an open matter. Judicial review of that decision sought by the applicants raised a number of issues: (1) the applicable standard of review, (2) whether the CITT had jurisdiction to hear the second complaint or was functus officio , (3) whether NAFTA applies to government procurement contracts, (4) whether the CITT was correct on the merits of the issue.

Held, the applications should be dismissed.

(1) The standard of review of the CITT's decisions in matters within its jurisdiction is one of high deference. When the Tribunal makes a decision which defines the boundaries of its jurisdiction, the standard of review is one of correctness. When making a determination within its jurisdiction, decisions of the CITT may only be overturned if they are patently unreasonable; when making a decision regarding its own jurisdiction, the CITT must be correct. The CITT made two decisions about the parameters of its own jurisdiction: (a) the second complaint was a new complaint and not enforcement of its earlier decision, (b) the contract in question met the standard for NAFTA. The CITT must be correct in those two determinations. In addition, the Tribunal decided that DCC had not sufficiently determined whether ICS was a qualified supplier. That decision was a matter within its jurisdiction and would therefore be given high deference.

(2) The CITT held that it had juridiction to hear the second complaint. The Tribunal reasoned that the entire procurement process, up to the award of the contract, must be handled in accordance with NAFTA. The purpose of the bid challenge procedure under Article 1017 of NAFTA is to allow suppliers to challenge a procurement process and receive a fair, open and impartial determination as to whether the procurement standards set out in the NAFTA agreement are met. Under that Article, "any aspect" of the procurement process is open to challenge. The CITT was correct in maintaining that the second decision was a determination as to whether the procurement process was within the bounds of NAFTA, a determination which it had the jurisdiction to make. While the first determination was based on whether the suppliers met the RFP requirements, the second determination investigated the government institution's behaviour to ascertain whether it had lived up to NAFTA requirements for fairness and transparency. These were different determinations based on different legal considerations. The Tribunal did not exceed its jurisdiction in making the second decision. Because the second complaint was found to be a new complaint, the doctrine of functus officio did not apply.

(3) Under subsection 30.18(1) of the Canadian International Trade Tribunal Act, government institutions shall implement the Tribunal's recommendations "to the greatest extent possible". The intent of the legislation is to render non-compliance an awkward and unusual occurrence. Neither the Government of Canada, nor any other government bound by NAFTA, should be able to establish government enterprises for the purpose of avoiding compliance under Chapter 10 of NAFTA. Likewise, parties may not design contracts so as to hide them from compliance. If Canada is to honourably uphold its NAFTA obligations, the CITT must be able to decide that the true contracting agent was DND, not DCC. The CITT did not err in finding that the contract should be evaluated as having been let by the Department of National Defence. A contract should not be exempt from NAFTA simply because the government has decided to let the contract through DCC.

(4) The Tribunal is given wide latitude when deciding on legal and factual matters within its jurisdiction. When it decided that DCC acted unreasonably by relying entirely on the consultant's report to decide that ICS was a qualified contractor, the CITT made a decision which was within its competence. That decision was not shown to be patently unreasonable.

statutes and regulations judicially considered

Canadian International Trade Tribunal Act, R.S.C., 1985 (4th Supp.), c. 47, ss. 30.1 (as enacted by S.C. 1993, c. 44, s. 44), 30.11 (as enacted idem), 30.14(2) (as enacted idem), 30.15(2) (as enacted idem), 30.18 (as enacted idem).

North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America, December 17, 1992, [1994] Can. T.S. No. 2, Art. 1002, 1003, 1004, 1005, 1006, 1007, 1008, 1009, 1010, 1011, 1012, 1013, 1014, 1015, 1016, 1017.

North American Free Trade Agreement Implementation Act, S.C. 1993, c. 44, s. 10.

cases judicially considered

applied:

Chandler v. Alberta Association of Architects, [1989] 2 S.C.R. 848; (1989), 101 A.R. 321; 62 D.L.R. (4th) 577; [1989] 6 W.W.R. 521; 70 Alta. L.R. (2d) 193; 40 Admin. L.R. 128; 36 C.L.R. 1; 99 N.R. 277.

considered:

Essex Incorporated Congregational Church Union v. Essex County Council, [1963] A.C. 808 (H.L.).

referred to:

Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554; (1993), 100 D.L.R. (4th) 658; 13 Admin. L.R. (2d) 1; 46 C.C.E.L. 1; 17 C.H.R.R. D/349; 93 CLLC 17,006; 149 N.R.1; Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; (1994), 114 D.L.R. (4th) 385; [1994] 7 W.W.R. 1; 92 B.C.L.R. (2d) 145; 22 Admin. L.R. (2d) 1; 14 B.L.R. (2d) 217; 4 C.C.L.S. 117; Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748; (1997), 144 D.L.R. (4th) 1; 50 Admin. L.R. (2d) 199; 71 C.P.R. (3d) 417; 209 N.R. 20; British Columbia (Vegetable Marketing Commission) v. Washington Potato and Onion Assn., [1997] F.C.J. No. 1543 (C.A.) (QL); Deputy Minister of National Revenue for Customs and Excise v. Hydro-Quebec (1994), 172 N.R. 247 (F.C.A.); Grandview (Town of) v. Doering, [1976] 2 S.C.R. 621; (1975), 61 D.L.R. (3d) 455; [1976] 1 W.W.R. 388; 7 N.R. 299; O'Brien v. Canada (Attorney General) (1993), 12 Admin. L.R. (2d) 287; 153 N.R. 313 (F.C.A.); Kaloti v. Canada (Minister of Citizenship and Immigration), [1998] F.C.J. No. 1281 (T.D.) (QL); Jhammat v. Canada (Minister of Employment & Immigration) (1988), 6 Imm. L.R. (2d) 166 (F.C.T.D.); Del Zotto v. Canada, [1994] 2 F.C. 640; [1994] 1 C.T.C. 254; (1994), 94 DTC 6170; 71 F.T.R. 1 (T.D.); Singh v. Canada (1996), 123 F.T.R. 241; 37 Imm. L.R. (2d) 140 (F.C.T.D.).

APPLICATIONS for judicial review of two decisions of the Canadian International Trade Tribunal ([1997] C.I.T.T. No. 46 (QL); [1997] C.I.T.T. No. 91 (QL)) concerning the North American Free Trade Agreement (NAFTA) as it applies to government procurement contracts. Applications dismissed.

appearances:

Michael F. Ciavaglia and Kathleen McManus for applicants.

Marshall N. Margolis and Lynda Covello for respondent.

Joël J. Robichaud and Hugh J. Cheetham for intervener.

solicitors of record:

Deputy Attorney General of Canada for applicants.

Morris, Rose, Ledgett, Toronto, for respondent.

Canadian International Trade Tribunal, Legal Services, Ottawa, for intervener.

The following are the reasons for judgment rendered in English by

Linden J.A.:

I.  Introduction

This is a case about the operation of the North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America [December 17, 1992, [1994] Can. T.S. No. 2] (NAFTA) in a government procurement situation. Two applications were heard together on December 1, 1998 in which the applicants contend that the Canadian International Trade Tribunal (CITT or the Tribunal) exceeded its jurisdiction by seeking in a second decision to enforce or implement one of its prior decisions. The parties also raise two additional issues before this Court. They are (a) whether the Fire Fighter Training System (FFTS) contract in this case met the minimum value required for NAFTA regulation, and (b) whether the CITT erred on the merits of the second complaint.

II.  The Complaint System under NAFTA

Before reviewing the facts and decisions in this case, I shall outline the relevant aspects of the NAFTA complaints mechanism applicable to government procurement which are relied on in this case.

Chapter 10 of NAFTA sets out the rules and regulations which apply to government procurement projects in member states. Briefly summarized, government procurement contracts of a certain size will be open to suppliers from all parties to NAFTA without discrimination.¹ Also included, at Article 1017, are skeletal rules by which disappointed suppliers may challenge the bidding procedure for a contract.

Article 1017(1) of NAFTA sets out a preamble, stating that "In order to promote fair, open and impartial procurement procedures, each Party shall adopt and maintain bid challenge procedures for procurement covered by this Chapter in accordance with" procedures which are set out (and described below).

Among the bid challenge procedures are several subsections which are directly relevant to this matter. First, NAFTA expressly permits challenges concerning "any aspect" of the procurement process, which begins when a government institution defines its requirements and ends when the contract is awarded, according to Article 1017(1)(a) which reads as follows:

Article 1017 . . .

(a) each Party shall allow suppliers to submit bid challenges concerning any aspect of the procurement process, which for the purposes of this Article begins after an entity has decided on its procurement requirement and continues through the contract award;

Second, the parties to NAFTA have agreed that no party may prevent a supplier from initiating a bid challenge. To this end, Article 1017(1)(d) states:

Article 1017 . . .

(d) whether or not a supplier has attempted to resolve its complaint with the entity, or following an unsuccessful attempt at such a resolution, no Party may prevent the supplier from initiating a bid challenge or seeking any other relief;

Third, NAFTA signatories agree that the reviewing authority may suspend the awarding of a contract pending resolution of a bid challenge. Signatories recognize, however, that situations of urgency may arise where a pending decision should not suspend a contract award if it is in the public interest. Article 1017(1)(j) states that:

Article 1017 . . .

(j) in investigating the challenge, the reviewing authority may delay the awarding of the proposed contract pending resolution of the challenge, except in cases of urgency or where the delay would be contrary to the public interest;

Fourth, NAFTA signatories have signalled that reviewing authorities are not to be toothless. Specifically, Article 1017(1)(k) directs reviewing authorities to resolve disputes by making recommendations which may include directing the government institution to take a fresh look at tender offers, terminate the contract, or hold a new competition. Moreover, Article 1017(1)(l) directs that government entities shall normally follow the recommendations of the reviewing authority. Those provisions read as follows:

Article 1017 . . .

(k) the reviewing authority shall issue a recommendation to resolve the challenge, which may include directing the entity to re-evaluate offers, terminate or re-compete the contract in question;

(l) entities normally shall follow the recommendations of the reviewing authority;

Thus, the purpose of the bid challenge procedure is to allow suppliers to challenge a procurement process and receive a fair, open and impartial determination as to whether the procurement standards set out in the NAFTA agreement are met.

As Chapter 10 of NAFTA sets out only skeletal rules, Parliament has amended the Canadian International Trade Tribunal Act (CITT Act)² to provide some muscle to the provisions. First, subsection 30.11(1) [as enacted by S.C. 1993, c. 44, s. 44], like NAFTA Article 1017(1)(d), directs that a potential supplier may file a complaint concerning "any aspect" of the procurement process and reads:

30.11 (1) Subject to the regulations, a potential supplier may file a complaint with the Tribunal concerning any aspect of the procurement process that relates to a designated contract and request the Tribunal to conduct an inquiry into the complaint.³

Second, CITT Act subsection 30.15(2) [as enacted idem] gives the Tribunal wide-ranging powers to make recommendations, including but not limited to the three recommendations enumerated in NAFTA Article 1017(1)(k). Notably, however, Parliament chose to expand on NAFTA Article 1017(1)(k). CITT Act subsection 30.15(2) reads that:

30.15 . . .

(2) Subject to the regulations, where the Tribunal determines that a complaint is valid, it may recommend such remedy as it considers appropriate, including any one or more of the following remedies:

(a) that a new solicitation for the designated contract be issued;

(b) that the bids be re-evaluated;

(c) that the designated contract be terminated;

(d) that the designated contract be awarded to the complainant; or

(e) that the complainant be compensated by an amount specified by the Tribunal.

Finally, subsection 30.18(1) [as enacted idem] of the CITT Act creates a type of "enforcement" mechanism, directing that government institutions shall implement the Tribunal's recommendations "to the greatest extent possible." The words "to the greatest extent possible" in subsection 30.18(1) of the CITT Act replace the word "normally" as written in NAFTA Article 1017(1)(l). Subsection 30.18(1) of the CITT Act states:

30.18 (1) Where the Tribunal makes recommendations to a government institution under section 30.15, the government institution shall, subject to the regulations, implement the recommendations to the greatest extent possible.

Without further modification, this seems to give the government institution some discretion over whether and how much to comply with the Tribunal's recommendation. However, Parliament indicated its intention that government institutions are meant to comply with the Tribunal. The plain language of subsections 30.18(2) [as enacted idem] and 30.18(3) [as enacted idem] is aimed at making non-compliance an awkward and unusual occurrence. The institution must tell the Tribunal what they plan to do and then advise it what they have done to implement the recommendations. Those sections of the CITT Act read as follows:

30.18 . . .

(2) Within the prescribed period, the government institution shall advise the Tribunal in writing of the extent to which it intends to implement the recommendations and, if it does not intend to implement them fully, the reasons for not doing so.

(3) Where the government institution has advised the Tribunal that it intends to implement the recommendations in whole or in part, it shall further advise the Tribunal in writing, within the prescribed period, of the extent to which it has then implemented the recommendations.

This case provides this Court with an opportunity to explain some aspects of how this part of the CITT Act operates.

III.  Facts

1.  Introduction

The case arises out of a 1996 decision by the Department of National Defence (DND) and Defence Construction Canada (DCC), a government agency, to contract out for a Fire Fighter Training System (FFTS), a computer-run facility which is used to train fire fighters. The request for proposals (RFP) by which the procurement process was started contained one key mandatory qualification requirement:

In order for any potential supplier of this fire fighter training system to be considered they must complete all of the information requested in appendix 001, 002, and 003. The minimum requirement that must be met for further consideration will be the following:

A company's successful completion of a propane fuelled computer controlled fire fighter training system with a value of $1,000,000 Canadian Currency.⁴

In order to be considered for this contract, each company was required to submit two envelopes, marked "A" and "B". Envelope "A" contained the mandatory experience sheets and the tender proposal. Envelope "B" contained the tender form. If the contents of a bid (in envelope "A") did not meet the mandatory minimum requirement, envelope "B" would not be opened.

Four companies submitted bids for the FFTS contract. DCC originally decided to award the contract to one of them I.C.S. International Code Fire Services Inc. (ICS), an Ontario company.

In the wake of that first decision, Symtron Systems Inc. (Symtron), a New Jersey company which lost the contract, filed a complaint dated February 12, 1997 regarding the procurement process. Symtron made several allegations, including that DCC considered tenders which failed to conform to the mandatory requirements set out in the RFP.

2.  The first decision of the CITT

In its determination of May 6, 1997 [[1997] C.I.T.T. No. 46 (QL)], the Tribunal found, in part, that DCC had improperly applied the minimum mandatory qualification requirements of the RFP resulting in DCC considering for award suppliers who may or may not have met all of those requirements. The Tribunal recommended that DCC re-evaluate Symtron's and ICS' proposals to determine whether they complied with the minimum mandatory qualification requirements, and to proceed thereon with the procurement. Specifically, the CITT held that DCC had not sufficiently investigated whether ICS had "completed" a FFTS project with a value of greater than C$1 million. The CITT held that:

. . . a company can complete a major project on its own or in concert with other parties. ICS claims, in its own name, the successful completion of . . . a [FFTS] project of the Australian Navy. ICS's involvement in the above-mentioned project was in the form of a joint venture . . . . The Tribunal believes that participation in a joint venture would be sufficient to qualify ICS as meeting the minimum requirement, if Defence Construction is satisfied that ICS' participation in the joint venture allowed it to acquire the expertise and know-how to be able to implement such a project. Symtron has presented evidence which casts doubt on the level of involvement of ICS in this project . . . . Defence Construction needs to conduct an independent verification of this claim.⁵

3.  The response to the first decision and the second complaint

In response to the CITT recommendation, DCC contracted Morrison Hershfield (MH), an independent consulting engineering company, to evaluate whether Symtron and ICS met the minimum criteria for the FFTS contract. In a letter dated May 14, 1997, as it was required to do, DCC informed the Tribunal that it was proceeding to implement the Tribunal's recommendation. On June 10, 1997, MH reported to DCC that both companies met the criteria. On that same day, DCC, in accordance with the Act, wrote to the CITT to explain the steps it had taken to comply with CITT recommendations. On June 16, 1997, DCC informed the Tribunal that the contract had been awarded to ICS on June 10, 1997.

On June 12, 1997, Symtron filed a second complaint alleging that ICS had not met the minimum mandatory qualification as provided in the RFP. This leads to the second CITT decision referred to below.

4.  The second decision of the CITT

The second decision of the CITT, dated September 10, 1997 [[1997] C.I.T.T. No. 91 (QL)], reviewed the facts up to that time, including the submission of the MH report. The Tribunal noted that, although this second complaint dealt with the same procurement process at issue in the first decision it explained that it had jurisdiction to hear this case:

First, the Tribunal notes that the matter in dispute does not consist in determining whether or not its recommendations of May 6, 1997 were properly implemented by Defence Construction. However, the Tribunal is of the view that the implementation by Defence Construction of its recommendations effectively extended the procurement process and, therefore, gave rise to the possibility of new challenges by potential suppliers. Article 1017(1)(a) of NAFTA provides that the procurement process begins after an entity has decided on its procurement requirement and continues through the contract award.⁶

Holding that this was a separate complaint made before the contract award, the Tribunal proceeded to determine whether the "extended" procurement process was conducted in accordance with NAFTA. The CITT took issue with DCC presenting only the last two pages of the May 6, 1997 decision to MH, it held that, having decided to present some of the May 6, 1997 decision to MH and DCC should have given over the entire decision. The CITT wrote:

Symtron alleges that Defence Construction improperly instructed Morrison Hershfield by providing it with only the last two pages of the findings of the Tribunal, rather than the entire text, which would have allowed a more informed evaluation process. The explanation offered by Defence Construction is that only the last two pages were pertinent to the re-evaluation of the qualifications of both ICS and Symtron from the technical perspective and that it merely raised the issue of whether ICS's participation in the Australian Navy Project was sufficient to meet the mandatory requirements set out in the RFP.

The Tribunal, however, notes that, throughout its findings of May 6, 1997, there is a detailed recounting of the allegations made by Symtron against ICS and, in the Tribunal's opinion, it cannot be said that such allegations are not relevant. Indeed, they are relevant inasmuch as the Tribunal found that Defence Construction had, "improperly applied the minimum mandatory qualification requirement provisions of the RFP." In this context, one might conclude that the more prudent course for Defence Construction would have been to present the entire text of the findings or none of it to Morrison Hershfield to conduct its evaluation.⁷

Further, the CITT noted its concerns regarding whether ICS had sufficiently participated in the Australian Navy project, and found that the MH report was virtually silent on the matter. The CITT concluded that:

The Tribunal is prepared to accept the expert opinion of [MH] that ICS is qualified to carry out such a project as contemplated in the RFP. This, however, is quite different from a conclusion that ICS fully met all of the requirements as laid out in the RFP. In the Tribunal's opinion, Defence Construction acted unreasonably when it accepted the MH report as fully satisfying the qualification requirements of the RFP. Given the importance attached to a joint venture arrangement and given that the MH report is silent on this point, Defence Construction should have been more thorough in its assessment.⁸

The CITT also noted the diverging views on the monetary value of the projects listed by ICS, and reasoned that it was up to DCC to properly establish whether or not ICS is a qualified supplier within the meaning of the RFP. In the light of DCC's wholesale adoption of the MH report, the CITT concluded that ICS' position as a qualified supplier was still an open matter.

Both the Attorney General and ICS now seek judicial review of the September 10, 1997 decision in this Court.

IV.  Submissions of the parties

1.  Submission of the Attorney General, applicant in Canada (Attorney General) v. Symtron Systems Inc. (A-687-97)

1.1  What is the standard of review in this matter?

The applicant argues that, while deference to the CITT is the general rule within its areas of expertise, deference exists only as to the merits of a complaint. As to the question of whether a second complaint is lawful, the applicant submits that, because the question is one of jurisdiction, the standard of review should be one of correctness.

1.2  Did the CITT have jurisdiction to hear the second complaint?

The applicant notes that the CITT Act neither gives the Tribunal jurisdiction to enforce recommendations, nor does it give jurisdiction to review or evaluate compliance with previous decisions. The Attorney General argues that the CITT decision of September 10, 1997 was a review of"and an attempt to enforce"compliance with previous recommendations, and was, therefore made without jurisdiction. Implementation in the guise of a new complaint, it is argued, is not permitted by any Act or Regulation.

1.3  Was the CITT functus officio with regards to the second complaint?

The applicant submits that, once a tribunal has made a final decision, that decision can not be reviewed on the grounds that the tribunal has changed its mind, or made an intra-jurisdictional error, or because circumstances have changed. The applicant contends that the Tribunal's recommendations of May 6, 1997 were the Tribunal's final word on the subject of whether ICS was a properly qualified bidder for this FFTS contract. The applicant argues that because the subject-matter of the claims was identical, the second complaint should have been rejected by the Tribunal, as it was functus officio with regards to this issue.

The Attorney General further argues that if this Court accepts that these were different determinations, then single procurement processes will never be free from complaints, and will be subject to endless reviews by the Tribunal.

1.4  Was the CITT correct when it decided that whether ICS was a qualified supplier was an open question?

The applicant Attorney General argues that the CITT was wrong to determine (on September 10, 1997) that the matter of whether ICS was a qualified supplier was still open. The Attorney General argues that the May 6, 1997 recommendation instructed DCC about what it had to do to close the matter, that is, to obtain an independent evaluation. Given that this is precisely what DCC did, and given that the CITT has no powers of enforcement or review, the Attorney General argues that the matter must be closed.

2.  Submission of ICS, applicant in I.C.S. International Code Fire Services Inc. v. Symtron Systems Inc. (A-700-97)

2.1  ICS argues that the CITT erred in finding that the value of this contract met the NAFTA threshold

ICS argues that the procurement process in question did not meet the monetary or financial threshold for coverage under NAFTA. Specifically, ICS notes that the estimated value of the FFTS project was between C$9-11 million, and points out that this is below the C$11.3 million which is required before a contract by a Canadian government enterprise will fall under NAFTA. DCC is defined as a government enterprise in the annex to NAFTA Chapter 10. The CITT held on May 6, 1997, that this contract was really let by DND, and applied the lower threshold (C$9.1 million) applicable to government entities under NAFTA. ICS argues that this was an error: DCC is a government enterprise established for the sole purpose of letting and supervising government contracts, with full authority to act before the courts. Further, DCC is signatory to the FFTS contract. The CITT therefore erred in claiming jurisdiction over such a small contract.

For its part, the respondent argues that ICS is estopped from bringing this claim, as the issue was decided by the CITT in its decision of May 6, 1997 and not appealed at that time. In response, counsel for ICS argued before this Court that estoppel did not apply. A question of jurisdiction, it was argued, could be raised at any time. Counsel quoted from the speech of Lord Reid in Essex Incorporated Congregational Church Union v. Essex County Council:⁹

. . . in my judgment, it is a fundamental principle that no consent can confer on a court or tribunal with limited statutory jurisdiction any power to act beyond that jurisdiction, or can estop the consenting party from subsequently maintaining that such court or tribunal has acted without jurisdiction.¹⁰

2.2  ICS argues that the CITT had no jurisdiction to evaluate the implementation of the May 6, 1997 recommendations.

ICS notes that section 30.18 of the CITT Act provides no absolute requirement on the part of parties to follow CITT recommendations, and argues that DCC amply complied with the May 6, 1997 recommendation despite being under no formal obligation to do so. ICS, therefore, argues that, despite the CITT statement that it was not reviewing DCC's implementation of its earlier recommendations, that is exactly what it was doing (and did) when it heard and decided the second complaint.

2.3  ICS argues that it is a qualified bidder.

ICS argues that, even if the CITT had jurisdiction to hear the second complaint, ICS is a qualified bidder and DCC properly found that as a fact. ICS notes that the MH report clearly stated that ICS had the relevant expertise to carry out the project, and submits that the real issue at hand was whether ICS had sufficient expertise. ICS further submits that the MH review was carried out according to the CITT's May 6, 1997 recommendations. In ICS' view, the CITT did not recommend on May 6, 1997, that MH investigate one specific project, i.e., the Australian Navy project, so much as it recommended that MH determine whether ICS had the relevant know-how to carry out the project.

3.  Submission of Symtron Systems, respondent in both actions

3.1  Did the CITT have the jurisdiction to hear the second complaint?

The respondent argues that the CITT did have jurisdiction to hear the second complaint. First, the respondent notes that NAFTA Article 1017 defines procurement as beginning after the decision on the procurement requirement and continuing through the contract award. The respondent also notes that CITT Act section 30.11 gives the CITT jurisdiction to consider complaints involving any aspect of procurement. It further contends that CITT Act subsection 30.14(2) [as enacted by S.C. 1993, c. 44, s. 44] gives the CITT jurisdiction to ensure that the procurement was conducted in accordance with NAFTA. Thus the Tribunal was within its jurisdiction to ensure that NAFTA Articles 1015 (a tender must conform to bid requirements at the time of bid opening) and Article 1017(1)(d) (anticipating multiple challenges arising under one bid, and prohibiting governments from preventing challenges) were met.

Second, the respondent notes that no one challenged the jurisdiction of the CITT to hear the second complaint at the time the second complaint was heard.

Third, the respondent argues that the second complaint was not a redetermination of the first complaint, so that functus officio has no application here. The respondent supports this with the assertion that the first complaint addressed whether DCC failed to determine whether bidders met the standard set out in the RFP, and DCC's alteration of the RFP's requirements from "completion" of previous projects to "participation in" previous projects. This is different from the second complaint, which, the respondent submits, dealt with DCC's failure to give relevant information to MH, and their acceptance of the MH conclusion without assessment of ICS' role in the Australian Navy project.

3.2  Did the CITT err when it found that the contract met the value for determination under NAFTA?

The respondent notes that the CITT dealt with this matter and argues that the CITT properly held on May 6, 1997, that the contract could be reviewed under NAFTA. First, the respondent argues that had ICS wanted to seek judicial review of this finding, it should have done so at the time, and is now estopped from doing so.

Second, the CITT found that the contract fell under the "government entity" standard because (a) the FFTS is required by DND; (b) DND ultimately approved the specifications drafted by DCC; (c) DND conducted technical evaluations of the proposals; (d) DND will pay for the work; and (e) DND will own the work. The respondent concludes that the CITT found as a fact that DND was the controlling agency, which finding was amply supported by the evidence.

In the alternative, the respondent argues that, if the CITT was wrong, and the appropriate standard is that set out for a government enterprise, then the contract was not for construction (which has the C$11.3 million threshold for NAFTA application), but was for miscellaneous goods and services, (which has a C$250,000 threshold for NAFTA application to government enterprises).

In the further alternative, the respondent notes that NAFTA Article 1001(4) provides that no government may prepare or structure a contract to avoid Chapter 10 of NAFTA. Further, that NAFTA Article 1002 states that no government may select a valuation method or divide a contract so as to avoid Chapter 10 of NAFTA. The respondent argues that attempted exclusion of this contract violates these sections.

3.3  Did the CITT err in its determinations?

The respondent notes that the CITT found that DCC acted unreasonably when it accepted the MH report as a full answer to whether ICS was a qualified bidder or not. In the respondent's view, the CITT finding was based on ample evidence, including conflicting evidence regarding ICS' role in the Navy project, a dispute as to the value of ICS' past projects, and vagueness as to whether the value of whole projects were to be taken into account, or just the value of the FFTS portions of the projects.

4.  Submission of the CITT, intervener

The CITT, intervener in both matters, argues that it had jurisdiction to hear the second Symtron complaint. The CITT points out the breadth of section 30.11 of the CITT Act, and the definition of "procurement" set out in Article 1017(1)(a) of NAFTA. The CITT argues that it heard and decided different matters regarding the same procurement process, and that it was legitimate for one procurement process to yield several complaints. In response to questioning by this Court, counsel for the CITT maintained that the second determination dealt with whether the procurement process was within the bounds of NAFTA, a determination which it had the jurisdiction to make.

V.  Analysis

1.  The applicable standard of review

It was agreed by counsel before this Court that the standard of review for the CITT in matters within its jurisdiction is one of high deference. It was further accepted that, when a tribunal such as the CITT makes a decision which defines the boundaries of its jurisdiction, the standard of review is one of correctness. Pursuant to the decisions of the Supreme Court of Canada¹¹ and this Court,¹² the standards of review to be employed here are as follows: (1) when making a determination within its jurisdiction, decisions of the CITT may only be overturned if they are patently unreasonable; (2) when making a decision regarding its own jurisdiction, the CITT must be correct.

The CITT made two decisions about the parameters of its own jurisdiction. Those were (a) that the second complaint was a new complaint and not enforcement of an earlier decision, and (b) that the contract in question met the standard for NAFTA. The CITT must be correct in those two determinations.

In addition, the CITT decided that DCC had not sufficiently determined whether ICS was a qualified supplier. That decision was on a matter within the jurisdiction of the CITT, and would therefore be given high deference. Let me now consider the alleged jurisdictional errors.

2.  Was the CITT attempting to enforce its previous recommendation?

Counsel for the Attorney General and ICS vigorously argued that the second complaint was beyond the jurisdiction of the CITT, being a thinly veiled attempt by it to move beyond the bounds of the CITT Act and to enforce its earlier decision.

Counsel for the Attorney General suggested that, had there not been a first recommendation, there would have been no second complaint. In the view of the applicants, the whole purpose of the second decision was to review"and enforce"the recommendation set out in the first decision.

While the applicants' arguments on this point are not without appeal, they are not sufficient to convince me that the Tribunal overstepped its bounds here. The express purpose of Article 1017 of NAFTA is to bring fairness and transparency to bid challenge procedures. That Article specifically contemplates that several challenges may arise from one procedure, and expressly holds procurement open until the time at which the contract is awarded. Where a government institution may be acting in ways which contravene its own RFP, suppliers have an interest"and through NAFTA a corresponding right"to determine the propriety of that institution's conduct.

In arguing this aspect of the case, the parties are talking past one another. On the one hand, counsel for the Attorney General and ICS argue that the second complaint arose from the first complaint, and that a plain reading of the two complaints must yield the conclusion that the CITT was enforcing its earlier decision, and deciding the same matter twice.

On the other hand, counsel for Symtron argues that the two complaints were completely different. The respondent asserts that the first complaint addressed (a) whether DCC failed to determine whether bidders met the standard set out in the RFP, and (b) DCC's alteration of the RFP's requirements from "completion" of previous projects to "participation in" previous projects. This is different from the second complaint, which, the respondent submits, dealt with (a) DCC's failure to give relevant information to MH, and (b) their acceptance of the MH conclusion without assessment of ICS' role in the Australian Navy project.

Finally, the CITT, for its part, considered whether it had jurisdiction to hear the second complaint and held that it did. In its second decision, the CITT wrote that the procurement process gave rise to two separate considerations: the first based on the events leading up to the first decision, and the second based on the events which occurred after that decision. The Tribunal reasoned that the entire procurement process"up to the award of the contract"must be handled in accordance with NAFTA. The Tribunal wrote:

First, the Tribunal notes that the matter in dispute does not consist in determining whether or not its recommendations of May 6, 1997 were properly implemented by Defence Construction. However, the Tribunal is of the view that the implementation by Defence Construction of its recommendations effectively extended the procurement process and, therefore, gave rise to the possibility of new challenges by potential suppliers. Article 1017(1)(a) of NAFTA provides that the procurement process begins after an entity has decided on its procurement requirement and continues through the contract award.

The complaint at issue, although part of the same procurement process at issue in [the May 6, 1997 decision], is a separate complaint and must be treated as such by the Tribunal. Section 30.14 of the CITT Act provides that, in conducting an inquiry, the Tribunal limit its considerations to the subject matter of the complaint, which, in the present case, consists of events which occurred subsequent to the Tribunal's determination dated May 6, 1997 . . . i.e. the approach adopted by Defence Construction in order to determine whether ICS and Symtron met the minimum mandatory qualification requirements and its subsequent reliance on the MH Report in deciding to award the contract to ICS. The Tribunal must determine whether this part of the procurement process was conducted in accordance with the requirements set out in the relevant provisions of NAFTA.¹³

Counsel for the CITT maintained that the second decision was a determination as to whether the procurement process was within the bounds of NAFTA, a determination which it has the jurisdiction to make.

On balance, I am convinced that the CITT was correct on this issue. On May 6, 1997 the CITT determined whether a series of suppliers were capable of meeting the requirements of the RFP. On September 10, 1997 the CITT reviewed the government institution's behaviour when it secured an outside opinion. These were different determinations based on different legal considerations. While the first determination is based on whether the suppliers met the RFP in question, the second determination looked at the behaviour of the government institution and asked whether that behaviour lived up to the fairness and transparency demanded by NAFTA.

Another way of looking at this matter is as follows. The Attorney General argued before this Court that, had there not been a first recommendation, there would have been no second complaint. This is not so, except perhaps in hindsight. To change the facts slightly, if DCC engaged an outside consultant before making the contract award (as government institutions often do), and if DCC supplied that consultant with only part of the information it required (as happened here), and if DCC received the consultant's report and relied entirely on it without consideration of further facts and context (as happened here),¹⁴ then Symtron would have had exactly the same complaint as it did here.

3.  Was the Tribunal functus officio?

Because I have found that the second complaint, which dealt with the behaviour of DCC in relation to its receipt of the MH report and its subsequent consideration of bid proposals, was a new complaint, functus officio does not apply to these facts. Nevertheless, I would make one point regarding the application of functus officio to the CITT. In this Court, counsel for the Attorney General quoted a passage from Chandler v. Alberta Association of Architects.¹⁵ In that passage, Sopinka J. wrote for a majority of three judges that:

As a general rule, once such a tribunal has reached a final decision in respect to the matter that is before it in accordance with its enabling statute, that decision cannot be revisited because the tribunal has changed its mind, made an error within jurisdiction or because there has been a change of circumstances. It can only do so if authorized by statute or if there has been a slip or error. . . .¹⁶

It was further pointed out that Sopinka J. continued on in his reasons to state that:

[the application of the doctrine of functus officio] must be more flexible and less formalistic in respect to the decisions of administrative tribunals which are subject to appeal only on a point of law. Justice may require the reopening of administrative proceedings in order to provide relief which would otherwise be available on appeal.

Accordingly, the principle should not be strictly applied where there are indications in the enabling statute that a decision can be reopened in order to enable the tribunal to discharge the function committed to it by enabling legislation . . . .

Furthermore, if the tribunal has failed to dispose of an issue which is fairly raised by the proceedings and of which the tribunal is empowered by its enabling statute to dispose, it ought to be allowed to complete its statutory task. If, however, the administrative entity is empowered to dispose of a matter by one or more specified remedies or by alternative remedies, the fact that one is selected does not entitle it to reopen proceedings to make another or further selection.¹⁷ [Emphasis added.]

While not necessary to the determination of this case, I would suggest that this passage has application to the CITT. If, as here, Parliament has curtailed the enforcement and implementation powers of the Tribunal, and if, as here, appeal from a decision of the Tribunal is only by way of judicial review, then justice may require that the CITT be allowed some latitude when faced with a new complaint which might, in other circumstances, be the subject of an appeal or an action for enforcement.

4.  Did NAFTA apply to these contracts?

The relevant standard of contracting under NAFTA was decided in the May 6, 1997 decision and was not made the subject of judicial review by ICS or any other party at that time. The cases now before this Court deal with the propriety of the CITT decision of September 10, 1997. Assuming, without deciding, that ICS is not estopped from raising this matter, I would hold that the CITT was not incorrect to decide the matter as it did. On one hand, the Government of Canada must be able to structure its organizations in order to best serve the Canadian public. This must include the ability to establish enterprises which specialize in letting and supervising Government contracts. On this analysis, the Government of Canada should be able to organize its affairs in order to accomplish its goals efficiently. On the other hand, however, none of the parties to NAFTA should be able to do indirectly what they may not do directly. Neither the Government of Canada, nor any other government bound by NAFTA, should be able to establish government enterprises for the purpose of avoiding compliance under Chapter 10 of NAFTA.

It is noteworthy that the parties to NAFTA enshrined this principle of non-avoidance into Chapter 10 when they adopted Article 1001(4), which reads that:

Article 1001 . . .

4. No Party may prepare, design or otherwise structure any procurement contract in order to avoid the obligations of this Chapter.

The parties to NAFTA further adopted Article 1002(4), which states that:

Article 1002 . . .

4. Further to Article 1001(4), an entity may not select a valuation method, or divide procurement requirements into separate contracts, to avoid the obligations of this Chapter.

The intention of the parties is manifest. Under NAFTA, parties may not design contracts so as to hide them from compliance. If Canada is to honourably uphold its NAFTA obligations, the CITT must be able to decide that the true contracting agent was DND, not DCC. In this case, the Tribunal based its conclusion on the following findings of fact: (a) the FFTS is required by DND; (b) DND ultimately approved the specifications drafted by DCC; (c) DND conducted technical evaluations of the proposals; (d) DND will pay for the work; and, (e) DND will own the work. I would add to this list that the RFP itself has the following words in bold capital letters on top of its cover page: "DEPARTMENT OF NATIONAL DEFENCE".¹⁸ Nowhere on the cover of the RFP are the words "Defence Construction (1951) Canada Limited" to be found. Further, each and every page of the RFP has a header which reads:

Department of National Defence

Fire Fighter Training Facility

Halifax, Nova Scotia

Esquimalt, British Columbia

I am of the view, therefore, that the CITT did not err when it found that this contract should be evaluated as having been let by the Department of National Defence. On facts such as these, a contract should not be exempt from NAFTA simply because the government has decided to let the contract through DCC. The decisions of the Canadian civil service, no matter how well intentioned, may not supercede our international obligations.

With regard to the application of estoppel, the parties raised the matter only briefly. ICS argued before this Court¹⁹ that estoppel can not apply in cases where it is said that an administrative tribunal was without jurisdiction. There have been several cases, not all consistent, decided in the Supreme Court of Canada,²⁰ in this Court and in the Federal Court (Trial Division) on this matter.²¹ Since the point was not fully argued here, nor is it necessary to decide it in this case, I would leave it open to be decided in another case.

5.  Was the Tribunal correct on the merits of the issue?

The Tribunal is given wide latitude when deciding on legal and factual matters within its jurisdiction. When it decided that DCC acted unreasonably by relying entirely on the MH report to decide that ICS was a qualified contractor, the CITT made a decision which was within its competence. In my view, that decision was not shown to be patently unreasonable.

VI.  Conclusion and disposition

For the foregoing reasons, I am of the view that:

1. the CITT did not exceed its jurisdiction, nor was it functus officio in making its decision of September 10, 1997;

2. the CITT was not incorrect when it decided that it had jurisdiction with regard to the value of the contract since DND was the relevant contracting agency; and,

3. the CITT's decision of September 10, 1997 was not shown to be patently unreasonable on the merits.

In the result I would dismiss both applications with one set of costs to Symtron.

Stone J.A.: I agree.

McDonald J.A.: I agree.

¹ See the North American Free Trade Agreement, legal text 1992, at Articles 1002 to 1016. The North American Free Trade Agreement was adopted by Parliament at s. 10 of the North American Free Trade Agreement Implementation Act, S.C. 1993, c. 44.

² R.S.C., 1985 (4th Supp.), c. 47.

³ The terms "complaint" and "designated contract" are defined in s. 30.1 [as enacted idem ] as follows:

30.1 . . .

"complaint" means a complaint filed with the Tribunal under subsection 30.11(1);

"designated contract" means a contract for the supply of goods or services that has been or is proposed to be awarded by a government institution and that is designated or of a class of contracts designated by the regulations;

⁴ Department of National Defence, "Fire Fighter Training System Performance Specifications: Fire Fighter Training Facility, Halifax, Nova Scotia & Esquimalt, British Columbia." October 7, 1996, at Section 00002(1) ("Selection Criteria"). Reproduced at Attorney General's Application Record (A-687-97), at p. 567.

⁵ CITT decision dated May 6, 1997, at para. 57; Attorney General's application record (A-687-97), at p. 26.

⁶ CITT decision dated September 10, 1997, at para. 35; Attorney General's application record (A-687-97), at p. 36.

⁷ CITT decisions dated September 10, 1997, at paras 38-39; Attorney General's application record (A-687-97), at pp. 37-38.

⁸ CITT decision dated September 10, 1997, at para. 41; Attorney General's application record (A-687-97), at p. 37.

⁹ [1963] A.C. 808 (H.L.).

¹⁰ Id., at pp. 820-821.

¹¹ ;Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554; Pezim v. British Columbia (Superintendent of Brokers), [1994] 2 S.C.R. 557; Canada (Director of Investigations and Research) v. Southam Inc., [1997] 1 S.C.R. 748.

¹² See, e.g., British Columbia (Vegetable Marketing Commission) v. Washington Potato and Onion Assn., [1997] F.C.J. No. 1543 (C.A.) (QL); see also Deputy Minister of National Revenue for Customs and Excise v. Hydro-Quebec (1994), 172 N.R. 247 (F.C.A.), at para. 16.

¹³ CITT decision dated September 10, 1997, at paras. 35-36; Attorney General's application record (A-687-97), at p. 36.

¹⁴ No party argued before this Court that DCC's reliance on the MH report impermissibly subdelegated its responsibilities in violation of the legal maxim delegatus non potest delegare. I would therefore refrain from any discussion of impermissible delegation in this case.

¹⁵ [1989] 2 S.C.R. 848.

¹⁶ Id., at p. 861.

¹⁷ Id., at p. 862.

¹⁸ Department of National Defence Request for Proposals, cover page, at Attorney General's application record (A-687-97), at p. 563.

¹⁹ Only ICS argued this point before this Court. Despite the fact that this argument supported the Attorney General's overall conclusion that the Tribunal was without jurisdiction, counsel for the Attorney General was silent on this point.

²⁰ ;Town of Grandview v. Doering, [1976] 2 S.C.R. 621.

²¹ See, e.g., O'Brien v. Canada (Attorney General) (1993), 12 Admin. L.R. (2d) (F.C.A.), at pp. 290 and 292 ("This Court has implicitly extended the applicability of the doctrine of issue estoppel, developed in the contest of judicial proceedings, to proceedings before statutorily established administrative tribunals . . . . Application of the principle of issue estoppel to [administrative circumstances] is consistent with the interests of justice and administrative efficiency having regard for the nature of the appeal process."). The O'Brien case was recently followed in Kaloti v. Canada (Minister of Citizenship and Immigration), [1998] F.C.J. No. 1281 (T.D.) (QL). I do, however, recognize that some cases from the Federal Court Trial Division suggest that estoppel does not apply to public law: see, e.g., Jhammat v. Canada (Minister of Employment and Immigration) (1988), 6 Imm. L.R. (2d) 166 (F.C.T.D.); see also Del Zotto v. Canada, [1994] 2 F.C. 640 (T.D.). I note, however, that Muldoon J. has since resiled from the position he took in the Jhammat case: see Singh v. Canada (1996), 123 F.T.R. 241 (F.C.T.D.). Further, in the Del Zotto matter, McKeown J. gives no reasons for stating that res judicata does not apply to public law and makes his holding on alternative grounds.