It's not over 'til it's over

Summit, Oct/Nov 2008 by Mills, Ben

TPG case on technology services contract explores every legal avenue open to the supplier

ON MARCH 23, 2007, TPG Technology Consulting Ltd. (TPG) filed a complaint with the Canadian International Trade Tribunal (CITT) regarding the award of a large technology services contract (valued at $400 million) by the Department of Public Works and Government Services (PWGSC). That initial complaint was rejected by the CITT as being filed outside the prescribed time limits (that decision was later overturned by the Federal Court of Appeal), but nonetheless sparked off a series of proceedings that included four other complaints to the CITT, two applications for judicial review and two motions for injunctions over an eight month period. Ultimately, these various proceedings culminated in an action for damages which is still outstanding before the Federal Court of Canada.

What follows are some of the key determinations that were made during the course of this litigation.

Key determination 1

WHEN INFORMATION IS NOT EVIDENCE

As noted above, the initial complaint filed by TPG with the CITT was rejected as being outside the limitation period. The CITT reviewed the complaint before it and found that TPG knew of the information that formed the basis of its complaint more than 10 business days before filing its complaint (which is the very short limitation period provided in the CITT Act and associated regulations). The information that TPG relied upon in its complaint consisted of information that was provided verbally from identified and, in some cases, unidentified sources on an informal and unofficial basis, which was later characterized by the Crown as being nothing more than "water-cooler gossip." The CITT held that TPCi knew of this information well before the filing of its complaint.

On judicial review, the Federal Court of Appeal took an entirely different view of the matter. "Ihe Court recognized that procurement matters must be dealt with in an expeditious manner. However, out of a concern for the openness of the solicitation process, the Court held that "the starting point of a time-barring period, which is the demarcation of a period which allows for the exercise, or the loss of a right, cannot revolve exclusively around unauthorized communications in the nature of 'watercooler gossip'." Ultimately, the Court held that in light of the nature of the allegations and the lack of any authorized communication by PWGSC' on which TPG could base its complaint, all the CITT could do was decline to hear the complaint on the basis that it was premature.

This decision represents a marked departure from what was considered normal practice in procurement complaints to the CITT, namely that a complaint goes to the CITT with the best information available in a timely manner. Ciiven the time limits on filing complaints and the need to act swiftly in order to keep all remedies as viable alternatives, complainants were well advised (and, in my view, still are) to proceed with complaints in an expeditious manner and not wait for some authorized communications from government officials which will support claims of wrong doing.

Furthermore, it is not clear whether this ruling will in fact result in more open procurements. While this ruling opened the door for TPG to live to fight again, it is not clear how it will, in fact, be of assistance to potential in cases involving allegations of subterfuge, bad faith or bias on the part of government officials, as it is rare that one will obtain any authorized communications which support such claims.

Despite the fact that the Federal Court of Appeal seems to have opened the door to obtaining evidence of a higher quality than that which may be immediately available, a complainant should be reluctant to sit on information that discloses a breach of applicable trade agreement. At the very least, in order to protect its position, a potential complainant is well advised to file an objection letter with the procuring agency, setting out the basis of the complaint and requesting a response, thereby stopping the clock from running for at least a period of time.

Key determination 2

IF YOU ALLEGE BIAS AND BAD FAITH, BE PREPARED TO BACK IT UP

One possible exception to the above noted general guidance is the case of an allegation of wrongdoing in the nature of bias, bad faith or conflict of interest. This is not to say that one should sit on information which supports a claim of bias, bad faith or conflict of interest. Rather, it is to say that if a complaint were to go forward with a complaint on such grounds, the CITT will expect the complainant to back up its claims with some evidence as opposed to simply allegations.

This was made clear by the CITT in PR-2007-033 in which TPG alleged that there was a reasonable apprehension of bias and/or an appearance of conflict of interest in the evaluation of bids. The CITT refused to even commence an inquiry into this complaint as TPG failed to provide any evidence supporting its allegations.