Federal Court of Appeal Rejects Procurement Complaint

Date: 20260402 Docket: A-209-24 Citation: 2026 FCA 69 CORAM: [NAME]. [NAME]. [NAME]. BETWEEN: [COMPANY]. and [COMPANY]. Applicants and [COMPANY] and THE [NAME] OF CANADA Respondents Heard at Halifax, Nova Scotia, on March 25, 2026. Judgment delivered at Ottawa, Ontario, on April 2, 2026.

REASONS FOR

JUDGMENT BY: [NAME]. CONCURRED IN BY: [NAME]. [NAME]. Date: 20260402 Docket: A-209-24 Citation: 2026 FCA 69 CORAM: [NAME]. [NAME]. [NAME]. BETWEEN: [COMPANY]. and [COMPANY]. Applicants and [COMPANY] and THE [NAME] OF CANADA Respondents

REASONS FOR

JUDGMENT [NAME]. [ 1 ] The applicants, [COMPANY]. and [COMPANY]. ([NAME]), apply for judicial review of the determination and reasons dated May 22, 2024 of the Canadian International Trade Tribunal (the Tribunal) (File No. PR-2020-068 – the Remedies Decision) pursuant to sections 18.1 and 28 of the Federal Courts Act , R.S.C. 1985, c. F-7. [ 2 ] In August 2018, as the successful bidder under a request for proposal (RFP) released earlier that year by [COMPANY] ([NAME]), the respondent, [COMPANY] ([NAME]), was awarded the contract for the supply of two emergency towing vessels in support of Canadian Coast Guard (CCG) operations on the west coast of Canada. [NAME] ranked last out of the seven compliant bidders. [ 3 ] Several weeks following the awarding of the contract and as provided for by section 7.46 of the RFP (the substitution clause), [NAME] permitted [NAME] to substitute all four masters originally proposed in its winning bid with new masters. Upon becoming aware of the substitution and suspecting a bait-and-switch on the part of [NAME] filed a complaint with the Tribunal, asserting that the substitute masters did not meet the technical requirements of the RFP under the substitution clause, and challenging the decision by [NAME] to allow the substitution on the basis that by failing to enforce key terms of the solicitation, [NAME] effectively conducted a de facto sole-source procurement, i.e., a modified solicitation for which [NAME] was the only bidder. Before the Tribunal, [NAME] argued that [NAME] should have submitted documentation showing how the substitute masters were evaluated and scored in comparison to the original masters. I should mention that no issue was taken by [NAME] with respect to the applicability of the substitution clause in the circumstances. [ 4 ] In May 2021, the Tribunal determined that [NAME] did not proceed with modifying the contract in a manner that contravened the RFP, as alleged by [NAME] ( [COMPANY]. / [COMPANY]. v. Department of [NAME] and Government Services (3 May 2021), PR-2020-068 - the Merits Decision). The Tribunal did find, at paragraph 60, that [NAME] “ought to have better documented their evaluation of the substitute masters” and in particular “should have documented efforts to ensure that the substitute masters would meet the mandatory requirements and that they would receive equivalent scores to the original masters under the rated requirements” . However, notwithstanding the lack of “contemporaneous documentation” before [NAME] at the time the decision to allow the substitutions was made, the Tribunal found at paragraphs 57 and 61, based upon the documents submitted during the course of the litigation, that it was nonetheless reasonable for [NAME] to have determined that all four of the substitute masters fulfilled the technical requirements of the RFP and that they would have earned the same top score under the proposed bid scoring system as did the masters originally proposed by [NAME]; the Tribunal proceeded to find [NAME] ’s complaint not to be valid. [ 5 ] In May 2023, this Court allowed [NAME]’s application for judicial review of the Merits Decision ( [COMPANY]. v. [COMPANY] , 2023 FCA 88 ( [NAME] ). [ADDRESS] determined at paragraph 21 that it was not open to the Tribunal to disregard the flawed basis for [NAME]’ decision and to substitute its own rationalization for the decision to allow the substitution of masters by [NAME]. As there was no contemporaneous evidence to support the conclusion that the substitute masters complied with the technical requirements of the RFP and merited full points under the bid scoring system as did the masters originally proposed by [NAME], this Court determined that “there was no bridge” between the evidence and the Tribunal’s conclusion on those issues; this Court also disagreed with the assertion of [NAME] that “equivalency of experience could be inferred from the type of vessels on which the substitute masters had served, as described in their resumes” ( [NAME] at para. 12). Having found that only one result was open to the Tribunal on account of the “limitations in the evidence” before it and that therefore “no purpose would be served in remitting the matter to” the Tribunal ( [NAME] at para. 24), this Court set aside the Merits Decision and declared [NAME]’s complaint to be valid. [ 6 ] On the strength of [NAME]’s complaint having been declared valid by this Court, the parties returned before the Tribunal to deal with the issue of remedies. In its Remedies Decision, the Tribunal noted at paragraphs 21 and 31 that the crux of what made [NAME]’s complaint valid was the finding by this Court in [NAME] that the information provided by [NAME] was insufficient for [NAME] to conclude that the substitute ship masters had qualifications and experience that met or exceeded those of the ship masters submitted in its initial bid as required by the substitution clause.

Accordingly, at paragraph 32, the Tribunal characterized the nature of the breach by [NAME] as relating to its “lack of rigour…in validating the experience of the proposed substitute ship masters” which constituted “a deficiency in the procurement process.” [ 7 ] After considering the circumstances listed in subsection 30.15(3) of the Canadian International Trade Tribunal Act , R.S.C. 1985, c. 47 (4th Supp.) (the Act ) as well as the remedies that may be available to it, including those listed in subsection 30.15(2) of the Act , the Tribunal recommended, inter alia , that [NAME] pay [NAME] $5,000 as a remedy for its breach. The Tribunal also recommended that [NAME] verify and document that the ship masters to be employed or proposed at the time of the next potential extension of the current contract have the qualifications and the experience that either meet or exceed the score obtained by the ship masters originally submitted by [NAME], and awarded [NAME] its reasonable costs incurred in preparing and proceeding with its complaint. [ 8 ] As stated, it is this Remedies Decision which forms the subject matter of the present application for judicial review; other than on issues of procedural fairness, the Tribunal’s determinations, including the exercise of its remedial discretion to award compensation and determine the amount thereof, are assessed by this Court on a standard of reasonableness ( [NAME] at para 10; [COMPANY]. v. Canada ([NAME] and Government Services) , 2012 FCA 51 at para. 4; Canada ([NAME]) v. Envoy Relocation Services , 2007 FCA 176 at paras. 15–18). The issue, therefore, is to determine whether the Tribunal’s Remedy Decision was reasonable. [ 9 ] In addition to repeating its modified solicitation assertion as regards [NAME] argues that the Tribunal mischaracterized the nature of the “breach” by [NAME] that was identified by this Court in [NAME] , and in doing so, rendered an unreasonable decision as regards appropriate remedies. According to [NAME], the breach of [NAME] is to have conducted a de facto sole-source procurement, i.e., a modified solicitation for which [NAME] was the only bidder.

Accordingly, [NAME] urges the Court to find that the unlawful substitution permitted by [NAME] was serious, that [NAME] directly undermined the integrity of the procurement process and breached its obligations under the Act , and that it, [NAME], was denied the opportunity to profit from the contract. [NAME] also asks that this Court now restore the integrity of the procurement system by cancelling the contract awarded to [NAME] and award [NAME] compensation for lost opportunity and to denounce [NAME] for its failure to preserve the integrity of the procurement process. [ 10 ] I cannot agree with [NAME], as its arguments are based upon the premise that the substitute masters did not, as a matter of fact, meet the relevant technical requirements of the RFP and that they would not have achieved full points under the relevant scoring system as did the masters originally proposed by [NAME]. [NAME] nor the Tribunal ever made such a finding, and I do not agree with [NAME] that paragraph 12 of [NAME] can be interpreted to suggest otherwise. [ 11 ] In the Merits Decision, the Tribunal concluded that [NAME] had reasonably determined that all four of the substitute masters fulfilled the technical requirements of the RFP and that they would have earned the same top score under the applicable scoring system as did the masters originally proposed by [NAME]. In its Remedies Decision, the Tribunal found that this Court in [NAME] allowed the application for judicial review because of the paucity of contemporaneous evidence not being able to support such a conclusion by the Tribunal rather than on any finding that the determination by [NAME] was factually incorrect. [ 12 ] I therefore find nothing unreasonable with the Tribunal’s conclusion that the “breach” upon which this Court determined in [NAME] that [NAME]’s complaint was valid was the failure by [NAME] to keep proper records of its determination regarding the propriety of the substitution rather than, as asserted by [NAME], the substitute masters not having met the technical requirements of the RFP. As such, there is no basis for [NAME]’s assertion that, in the Merits Decision, the Tribunal accepted its proposition that by permitting the substitution, [NAME] was conducting a modified solicitation, nor that, in its Remedies Decision, the Tribunal disregarded this Court’s determination in [NAME] that the complaint was valid. [ 13 ] What the Tribunal did accept at paragraph 42 of that decision was that “ [i]f the substitute masters were not required to earn the same points on rated requirements as [[NAME]]’s original masters had earned, then [[NAME]] would be effectively creating a new evaluation process where [[NAME]]’s substitute masters would be permitted to satisfy lesser requirements than all masters originally proposed by other bidders” (my emphasis). However, at no point did the Tribunal find that the substitute masters were allowed to score less on rated requirements than did the masters initially proposed by [NAME]. There is no basis for [NAME]’s assertion that, in framing the crux of what made its complaint valid as it did in the Remedies Decision, the Tribunal disregarded the Court’s declaration that the complaint was valid. [ 14 ] As regards the Tribunal decision which is the subject matter of the present application, the Tribunal recognized the principles set out by this Court in Canada ([NAME]) v. [COMPANY] , 2010 FCA 193, [2011] 4 F.C.R. 203 that underscore the purposes of subsections 30.15(2) and (3) of the Act , reviewed the factors listed in subsection 30.15(3) of the Act , and applied them to the specific circumstances of the case. As noted by the Tribunal, the breach by [NAME] related to its lack of rigour in the validation of the substitute masters, which constituted a deficiency in the procurement process; the Tribunal stated at paragraph 32 that by “not properly verifying the experience of the ship masters, [[NAME]] failed to apply transparent rules, which, to some extent, may contribute to decreasing bidders’ confidence in the procurement process.” [ 15 ] That said, I can find no reviewable error in the way the Tribunal dealt with the issues raised by [NAME]. The Tribunal considered the circumstances relevant to the procurement and those listed in subsection 30.15(3) of the Act . It then determined that cancellation of the contract was unjustified, in particular given the advanced stage of its execution and the concerns its interruption would have on the provision of an essential service, and that compensation for lost opportunity was inappropriate given that [NAME]’s bid ranked last out of the seven compliant bidders. Considering the record before the Tribunal, I find nothing unreasonable with such findings. I am also not convinced that the Tribunal’s decision to recommend that $5,000 in compensation be paid to [NAME] as a remedy for [NAME]’ shortcomings in protecting the integrity of the procurement process is unreasonable, considering the circumstances, the statutory framework and the relevant case law relating to this head of compensation. [ 16 ] On the whole, the Tribunal’s decision under review bears the hallmarks of reasonableness—justification, transparency, and intelligibility—and is justified in relation to the relevant factual and legal constraints that bear on it ( Canada (Minister of Citizenship and Immigration) v. Vavilov , 2019 SCC 65, [2019] 4 S.C.R. 653 at para. 99). I would therefore dismiss the present application. Finally, given the nature of the complaint and the way the proceedings throughout have unfolded, I would also make no award as to costs. “[NAME]” J.A. “I agree. [NAME] J.A.” “I agree. [NAME] J.A.” FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-209-24 STYLE OF CAUSE: [COMPANY]. AND, [COMPANY]. v. [COMPANY] and, THE [NAME] OF CANADA PLACE OF HEARING: HALIFAX, NOVA SCOTIA DATE OF HEARING: March 25, 2026

REASONS FOR

JUDGMENT BY: [NAME]. CONCURRED IN BY: [NAME]. [NAME]. DATED: APRIL 2, 2026 APPEARANCES : [NAME], K.C. [NAME] For The Applicants [NAME] For The Respondent [COMPANY] [NAME] For The Respondent [NAME] of Canada SOLICITORS OF RECORD : [COMPANY], Nova Scotia For [COMPANY], Ontario For The Respondent [COMPANY], Ontario For The Respondent [NAME] of Canada