Date: 20001128
Docket: A-421-99
CORAM: LINDEN J.A.
EVANS J.A.
SHARLOW J.A.
BETWEEN:
COUGAR AVIATION LIMITED
Applicant
- and -
MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES CANADA
and PROVINCIAL AIRLINES LIMITED
Respondents
Heard at Ottawa, Ontario, on October 4, 2000.
Judgment delivered at Ottawa, Ontario, on November 28, 2000.
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED BY: LINDEN J.A.
SHARLOW J.A.
Date: 20001128
Docket: A-421-99
CORAM: LINDEN J.A.
EVANS J.A.
SHARLOW J.A.
BETWEEN:
COUGAR AVIATION LIMITED
Applicant
- and -
MINISTER OF PUBLIC WORKS AND GOVERNMENT SERVICES CANADA
and PROVINCIAL AIRLINES LIMITED
Respondents
REASONS FOR JUDGMENT
EVANS J.A.
| A. INTRODUCTION |
[1] In a decision dated June 7, 1999, the Canadian International Trade Tribunal dismissed a complaint by Cougar Aviation Limited that a contract was awarded to Provincial Airlines Limited ("PAL") by Public Works and Government Services Canada ("PWGSC"), the purchasing arm of the Government of Canada, in breach of the Internal Trade Agreement.
[2] This is an application for judicial review to set aside the Tribunal's decision. It is brought by Cougar, an unsuccessful bidder for the contract, on the grounds that the Tribunal (i) failed to consider whether the award of the contract was vitiated by a reasonable apprehension that the committee members who evaluated the bids were biased; (ii) breached the duty of fairness when it decided in the exercise of its discretion not to hold an oral hearing into Cougar's complaints about the tendering process; (iii) erred in law when it held that Cougar was out of time for filing aspects of its complaint with the Tribunal; and (iv) made findings of fact that were not supportable on the evidence before it.
| B. FACTUAL BACKGROUND |
[3] PAL had provided maritime aerial surveillance services for the Department of Fisheries and Oceans ("DFO") under two five-year contracts. The principal purpose of this service was to enable the DFO to identify trawlers illegally fishing within Canada's 200 mile limit.
[4] With the approach of the end of PAL's contract, in July 1998 PWGSC issued a Request for Proposals ("RFP") for the continued provision of maritime aerial surveillance services to the DFO. The request contained a statement of work which set out the contract specifications, including the following requirement:
| 2.6 Dash speed of at least 300 mph |
| Dash speed requirements will enable patrols to be conducted at the 200 mile limit within1 hour of take off ... |
[5] Bidders were invited to submit requests for clarification of the statement of work during the tendering period. In response to these requests, PWGSC made six formal amendments to the RFP. For the purpose of this proceeding, the sixth amendment is the most important. It was made on September 30, only nine days before the end of the tendering period, in response to a letter from Cougar, dated September 23, 1998, in which the company had questioned whether the aircraft being used by PAL to perform the existing contract, three Beechcraft King Air 200 aircraft, were capable of meeting the dash speed requirement specified in the RFP for the new contract.
[6] Cougar enclosed a letter from Field Aviation Company which stated that Field had modified PAL's aircraft for surveillance purposes in 1986, and believed that, when configured in accordance with the work statement in the current RFP, the King Air 200 used by PAL had a maximum dash speed of only 292 mph. Field was a joint venturer in Cougar's bid and, if Cougar were awarded the new surveillance contract, Field would supply it with King Air 350s, larger and more powerful versions of the 200, with which to perform the contract.
[7] Following the receipt of this correspondence, PWGSC amended contract requirement 2.6 in the statement of work to read as follows:
| Dash Speed: |
| The aircraft must be capable of reaching a distance of 250 miles from the main base of operations within one hour of take-off ... |
[8] This amended version omitted the original requirement that the aircraft to be used to perform the contract must have a dash speed of 300 mph and specified the time within which the aircraft must be able to travel a particular distance. PWGSC stated that this revised wording was no more than a more accurate reflection of the needs of the DFO.
[9] In response to an assertion by Cougar that, in view of the conflicting views on whether PAL's King Air 200 aircraft could meet the contract specifications, the committee should retain an independent expert opinion, PWGSC stated that, "based on experience", it was satisfied that PAL's aircraft satisfied DFO requirements.
[10] Three bids were ultimately submitted by the closing date, October 9, 1998, but only those of PAL and Cougar were found to comply with the RFP. In its bid, PAL proposed to use its King Air 200 aircraft, while Cougar proposed to use the King Air 350. PAL's bid came in at just under $40 million, while Cougar's was for a little less than $65 million. The requisition for goods and services indicated that the budget for this contract was $70 million over five years, a sum that included the maximum number of possible flying hours over the life of the contract.
[11] On October 9, 1998, the last day for the submission of bids, Cougar sent a letter to PWGSC raising a number of concerns about "the equity and legitimacy"of the tendering process. The letter focussed on what Cougar saw as changes to the mandatory requirements in the statement of work attached to the RFP and as inconsistencies in some of the responses of PWGSC to questions put by prospective bidders. The letter invited a response, which never came, despite a meeting with a representative of PWGSC and follow-up communications by Cougar.
[12] The two bids were evaluated by a committee of four members: three from DFO, two of whom already knew PAL in their official capacity, and a senior procurement official from PWGSC, who headed up the process and was previously unknown to both PAL and Cougar. Although none of the members of the evaluation committee had technical aircraft expertise, they decided that they did not need the assistance of an outside expert, despite a recommendation to this effect from PWGSC.
[13] On January 8, 1999, PWGSC announced that it had awarded the contract to PAL. On the basis of the grid used to evaluate the bids, the committee had awarded significantly more points to PAL's bid, even before it took into consideration the fact that PAL had also quoted a much lower price.
[14] On January 22, 1999 Cougar filed a lengthy complaint with the Tribunal, requesting a range of relief, including a recommendation that the award of the contract to PAL be cancelled, and that it be awarded to Cougar instead. It alleged, among other things, that the sixth amendment to the RFP was so significant, and was made so close to the closing date for bids, that it vitiated the tendering process, that the evaluation committee was biased and that only Cougar's bid complied with the RFP.
| C. THE TRIBUNAL'S DECISION |
[15] After receiving written submissions from the parties, the Tribunal rejected the complaint in its entirety. In its written reasons for decision, the Tribunal found that the amendments made to the statement of work were either of a minor nature, or constituted no more than clarifications of the original requirements, and that PAL's bid was compliant with the RFP. Further, when properly interpreted, PWGSC's statement was not a pre-qualification of PAL's aircraft, but a response to Cougar's demand that an outside expert be hired.
[16] On the issue of bias, the Tribunal held that it had no jurisdiction to investigate an allegation of a reasonable apprehension of bias, as opposed to one of actual bias, of which, in its opinion, there was no evidence. It did add, however, (Applicant's Record, page 34) that
| ... by failing to secure independent third-party expertise from within the government or the private sector when completing the evaluation of certain technical aspects of the proposals, the Department and the DFO unnecessarily exposed themselves to criticism. This is particularly so because of PAL's long-standing incumbency situation, the close working relationship of two of the evaluators with PAL as the incumbent contractor and the lack of aviation expertise of all the members of the evaluation committee. (Emphasis added) |
[17] The Tribunal dismissed other aspects of the complaint as being out of time: PWGSC's failure to respond to Cougar's requests for information; its refusal to extend the time for the submission of bids following the sixth amendment to the statement of work; and the requirement of a letter of intent confirming the availability of personnel to perform the contract.
| D. THE LEGISLATIVE FRAMEWORK |
[18] An elaborate framework of legislation and trade agreements regulates the award of federal procurement contracts, which is designed to ensure that the process is fair and transparent, and that the Canadian public obtains value for money. For the sake of convenience, I set out below the provisions relied upon by the parties in support of, or in response to, the application for judicial review, and I have underlined those that are of immediate importance to this application.
Agreement on Internal Trade, C. Gaz., 1995.I.1323
| 501. Consistent with the principles set out in Article 101(3) (Mutually Agreed Principles) and the statement of their application set out in Article 101(4), the purpose of this Chapter is to establish a framework that will ensure equal access to procurement for all Canadian suppliers in order to contribute to a reduction in purchasing costs and the development of a strong economy in a context of transparency and efficiency. |
501. Conformément aux principes énoncés au paragraphe 101(3) (Principes convenus) et à leurs modalités d'application énoncées au paragraphe 101(4), le présent chapitre vise à établir un cadre qui assurera à tous les fournisseurs canadiens un accès égal aux marchés publics, de manière à réduire les coûts d'achat et à favoriser l'établissement d'une économie vigoureuse, dans un contexte de transparence et d'efficience. |
| 502(1) This Chapter applies to measures adopted or maintained by a Party relating to procurement within Canada by any of its entities listed in Annex 502.1A, where the procurement value is ... (b) $100,000 or greater, in cases where the largest portion of the procurement is for services, except those services excluded by Annex 502.1B; or ... 504(3) Except as otherwise provided in this Chapter, measures that are inconsistent with paragraphs 1 and 2 include, but are not limited to, the following: ... (b) the biasing of technical specifications in favour of, or against, particular goods or services, including those goods or services included in construction contracts, or in favour of, or against, the suppliers of such goods or services for the purpose of avoiding the obligations of this Chapter; |
| 502(1) Le présent chapitre s'applique aux mesures adoptées ou maintenues par une Partie relativement aux marchés publics suivants, passés au Canada par une de ses entités énumérées à l'annexe 502.1A : ... b) les marchés d'une valeur d'au moins 100 000 $ et portant principalement sur des services, sauf ceux précisés à l'annexe 502.1B; ... 504(3) Sauf disposition contraire du présent chapitre, sont comprises parmi les mesures incompatibles avec les paragraphes 1 et 2 : ... b) la rédaction des spécifications techniques de façon soit à favoriser ou à défavoriser des produits ou services donnés, y compris des produits ou services inclus dans des marchés de construction, soit à favoriser ou a défavoriser des fournisseurs de tels produits ou services, en vue de se soustraire aux obligations prévues par le présent chapitre; |
| 506(1) Each Party shall ensure that procurement covered by this Chapter is conducted in accordance with the procedures set out in this Article. ...
(5) Each Party shall provide suppliers with a reasonable period of time to submit a bid, taking into account the time needed to disseminate the information and the complexity of the procurement. (6) In evaluating tenders, a Party may take into account not only the submitted price but also quality, quantity, delivery, servicing, the capacity of the supplier to meet the requirements of the procurement and any other criteria directly related to the procurement that are consistent with Article 504. The tender documents shall clearly identify the requirements of the procurement, the criteria that will be used in the evaluation of bids and the methods of weighting and evaluating the criteria. |
506(1) Chaque Partie veille à ce que les marchés publics visés par le présent chapitre soient passés conformément aux procédures prévues au présent article. ... (5) Chaque Partie accorde aux fournisseurs un délai suffisant pour présenter une soumission, compte tenu du temps nécessaire pour diffuser l'information et de la complexité du marché public. (6) Dans l'évaluation des offres, une Partie peut tenir compte non seulement du prix indiqué, mais également de la qualité, de la quantité, des modalités de livraison, du service offert, de la capacité du fournisseur de satisfaire aux conditions du marché public et de tout autre critère se rapportant directement au marché public et compatible avec l'article 504. Les documents d'appel d'offres doivent indiquer clairement les conditions du marché public, les critères qui seront appliqués dans l'évaluation des soumissions et les méthodes de pondération et d'évaluation des critères. |
| 514(1) This Article applies to complaints regarding procurement by the Federal Government. (2) In order to promote fair, open and impartial procurement procedures, the Federal Government shall adopt and maintain bid protest procedures for procurement covered by this Chapter that: (a) allow suppliers to submit bid protests 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 to the awarding of the contracts; (b) encourage suppliers to seek a resolution of any complaint with the entity concerned prior to initiating a bid protest ... |
| 514(1) Le présent article s'applique aux plaintes concernant les marchés publics du gouvernement fédéral. (2) Afin de favoriser des procédures équitables, ouvertes et impartiales en matière de marchés publics, le gouvernement fédéral adopte et maintient, à l'égard des marchés publics visés par le présent chapitre, des procédures de contestations des offres : a) permettant aux fournisseurs de présenter des contestations portant sur tout aspect du processus de passation du marché public, lequel, pour l'application du présent article, débute au moment où une entité décide des produits ou services à acquérir, et se poursuit jusqu'à l'attribution du marché; b) encourageant les fournisseurs à régler leurs plaintes à l'amiable avec l'entité concernée avant d'amorcer une contestation des offres; ... |
| Canadian International Trade Tribunal Act, RSC 1985, |
| c. 47 (4th Supp.) |
| 30.1 In this section and in sections 30.11 to 30.19, ... "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; ...
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. |
30.1 Les définitions qui suivent s'appliquent au présent article et aux articles 30.11 à 30.19. ... « _contrat spécifique_ » Contrat relatif à un marché de fournitures ou services qui a été accordé par une institution fédérale -- ou pourrait l'être --, et qui soit est précisé par règlement, soit fait partie d'une catégorie réglementaire. ... 30.11(1) Tout fournisseur potentiel peut sous réserve des règlements, déposer une plainte auprès du Tribunal concernant la procédure des marchés publics suivie relativement à un contrat spécifique et lui demander d'enquêter sur cette plainte. |
| 30.13(1) Subject to the regulations, after the Tribunal determines that a complaint complies with subsection 30.11(2), it shall decide whether to conduct an inquiry into the complaint, which inquiry may include a hearing. |
30.13(1) Après avoir jugé la plainte conforme et sous réserve des règlements, le Tribunal détermine s'il y a lieu d'enquêter. L'enquête peut comporter une audience. |
30.14(2) At the conclusion of an inquiry, the Tribunal shall determine whether the complaint is valid on the basis of whether the procedures and other requirements prescribed in respect of the designated contract, or the class of contracts to which it belongs, have been or are being observed.
30.14(2) Le Tribunal détermine la validité de la plainte en fonction des critères et procédures établis par règlement pour le contrat spécifique ou la catégorie dont il fait partie.
| 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 .... |
30.15(2) Sous réserve des règlements, le Tribunal peut, lorsqu'il donne gain de cause au plaignant, recommander que soient prises des mesures correctives .... |
Canadian International Trade Tribunal Procurement Inquiry Regulations,
SOR/93-602
| 3(1) For the purposes of the definition "designated contract" in section 30.1 of the Act, any contract or class of contract resulting from a procurement of goods or services or any combination thereof, as described in Article 1001 of the Agreement, by a government institution is a designated contract. 6(1) Subject to subsections (2) and (3), a potential supplier who files a complaint with the Tribunal in accordance with section 30.11 of the Act shall do so not later than 10 working days after the day on which the basis of the complaint became known or reasonably should have become known to the potential supplier. (2) A potential supplier who has made an objection regarding a procurement relating to a designated contract to the relevant government institution, and is denied relief by that government institution, may file a complaint with the Tribunal within 10 working days after the day on which the potential supplier has actual or constructive knowledge of the denial of relief, if the objection was made within 10 working days after the day on which its basis became known or reasonably should have become known to the potential supplier. ... 11. Where the Tribunal conducts an inquiry into a complaint, it shall determine whether the procurement was conducted in accordance with the requirements set out in whichever one of NAFTA, the Agreement on Internal Trade or the Agreement on Internal Trade or the Agreement on Government Procurement applies. |
| 3(1) Pour l'application de la définition de « _contrat spécifique_ » à l'article 30.1 de la Loi, est un contrat spécifique tout contrat ou catégorie de contrats relatif à l'achat par une institution fédérale de fournitures ou de services, ou de toute combinaison de ceux-ci, tel qu'il est énoncé à l'article 1001 de l'Accord 6(1) Sous réserve des paragraphes (2) et (3), le fournisseur potentiel qui dépose une plainte auprès du Tribunal en vertu de l'article 30.11 de la Loi doit le faire dans les 10 jours ouvrables suivant la date où il a découvert ou aurait dû vraisemblablement découvrir les faits à l'origine de la plainte. (2) Le fournisseur potentiel qui a présenté à l'institution fédérale concernée une opposition concernant le marché public visé par un contrat spécifique et à qui l'institution refuse réparation peut déposer une plainte auprès du Tribunal dans les 10 jours ouvrables suivant la date où il a pris connaissance, directement ou par déduction, du refus, s'il a présenté son opposition dans les 10 jours ouvrables suivant la date où il a découvert ou aurait dû vraisemblablement découvrir les faits à l'origine de l'opposition. ... 11. Lorsque le Tribunal enquête sur une plainte, il détermine si le marché public a été passé conformément aux exigences de l'ALÉNA, de l'Accord sur le commerce intérieur ou de l'Accord sur les marchés publics, selon le cas. |
| Canadian International Trade Tribunal Rules, SOR/91-499 |
25(1) Where, in any matter, a hearing is not required and the Tribunal intends not to proceed by way of a hearing, the Tribunal may
(a) dispose of the matter on the basis of the written documentation before it;
(b) require further information to be furnished by any party; or
(c) invite submissions from any party or any person who may have an interest in the matter and issue directions on procedure.
25(1) Lorsque, dans le cadre d'une affaire, une audience n'est pas requise et que le Tribunal se propose de ne pas en tenir, ce dernier peut, selon le cas :
a) statuer sur l'affaire sur la foi des documents écrits à sa dispositions;
b) exiger de toute partie la production de renseignements complémentaires;
c) inviter toute partie ou personne qui peut avoir un intérêt dans l'affaire à présenter des exposés et donner des directives sur la marche à suivre.
Canadian International Trade Tribunal Rules, SOR/93-601
| 105(1) The Tribunal may, on the request of the complainant or on the Tribunal's own initiative, hold a hearing on the merits of a complaint. |
105(1) Le Tribunal peut, de sa propre initiative ou à la demande du plaignant, tenir une audience visant à déterminer le bien-fondé d'une plainte. |
E.ISSUES AND ANALYSIS
[19] Cougar brought its complaint to the Tribunal under subsection 30.11(1) of the Canadian International Trade Tribunal Act, which grants the Tribunal jurisdiction over complaints arising from procurement for "designated contracts." The PWGSC contract is a "designated contract" as defined in section 30.1 of the Act, read in conjunction with subsection 3(1) of the Canadian International Trade Tribunal Procurement Inquiry Regulations ("the Regulations") and Article 502(1)(b) of the Agreement on Internal Trade. Section 11 of the Regulations requires the Tribunal to determine whether the procurement was conducted in accordance with the requirements of this Agreement.
| Issue 1: Did the Tribunal err in law in dismissing Cougar's complaint that the award of the contract to PAL was vitiated by a reasonable apprehension that the members of the evaluation committee were biased? |
[20] This issue can be broken down into three more specific questions: did the Tribunal have jurisdiction to consider this allegation of bias and, if it did, what standard of impartiality applies and was it breached?
(i) The Tribunal's jurisdiction
[21] It was conceded that the Tribunal would have had jurisdiction to entertain a complaint of actual bias made against those awarding a contract to which the Agreement on Internal Trade applies. This ground of challenge was agreed to be covered by Articles 501 (ensuring "equal access to procurement"), 504(3)(b) (a prohibition on "the biasing of technical specifications") and 514(1) (the adoption of bid protest procedures required "to promote fair, open and impartial procurement procedures").
[22] However, it was argued, since the Tribunal may only adjudicate matters provided for in the Agreement, and that, properly construed, the above Articles do not provide for the adjudication of allegations of a reasonable apprehension of bias, the Tribunal had no jurisdiction to entertain this aspect of Cougar's complaint.
[23] In my opinion, the various obligations imposed on the parties by the relevant Articles of the Agreement should be interpreted, to the extent that their language permits, in a manner consistent with the common law duty of fairness as it applies to the federal procurement contract process. In the context of administrative procedure, "impartiality" normally includes the appearance of impartiality.
[24] Furthermore, it would unduly fragment a challenge to an award of a contract if an unsuccessful bidder were required to raise an allegation of a reasonable apprehension of bias, not in the Tribunal which might be the appropriate forum for other aspects of a complaint, but on an application for judicial review in the Federal Court, Trial Division. Given the technical nature of the tendering process, and the legislative regime within which it is conducted, it would seem inconsistent with the statutory scheme to interpret the Tribunal's jurisdiction this narrowly.
[25] The Tribunal's interpretation of the Agreement will normally be entitled to a considerable measure of deference. However, the issue in dispute in this case involves a common law concept, namely an aspect of the duty of fairness, and the appropriate allocation of functions between the Court and the Tribunal in the handling of complaints about the procurement process, an allocation that may have an impact on the efficient use of the parties' and the Court's resources. Moreover, the Tribunal's claim for deference is weakened by the absence of a reasoned explanation for its interpretation of the relevant Articles of the Agreement.
[26] In these circumstances, I have no hesitation in applying a standard of correctness to the Tribunal's conclusion that it could not consider Cougar's complaint that there was a reasonable apprehension of bias. In my opinion, if the duty of impartiality in the Agreement has its normal administrative law meaning, the Tribunal erred in law in failing to consider this aspect of Cougar's complaint.
(ii) The standard of impartiality
[27] It was not disputed that the duty of fairness applies to the tendering process for federal government procurement contracts: see, for example, Thomas C. Assaly Corp. v. R. (1990), 34 F.T.R. 156 (F.C.T.D.). The elaborate statutory framework regulating their award, not to mention the obvious public interests implicated in these decisions, has added a public law aspect to a process that remains in part governed by the private law of contract.
[28] In the absence of an express or necessarily implied statutory modification, if the duty of fairness applies to the exercise of a particular decision-making power, both of its branches will be engaged: the duty of the decision-maker to hear those liable to be affected by an adverse decision, and the duty to be impartial.
[29] The duty of impartiality is normally not limited to actual bias. Thus, in order to prove a breach of the duty to be impartial a litigant need not show that the decision-maker in fact allowed the decision to be influenced by an extraneous factor, such as friendship with, or personal hostility towards, a participant in the process. Of course, since it will normally be extremely difficult to prove whether a decision-maker was indeed improperly so influenced, it would be extremely difficult to impugn successfully a decision on the ground of actual bias.
[30] Accordingly, in order to permit decisions to be set aside that might have been influenced by improper considerations the law normally only requires a litigant to establish a reasonable apprehension of bias in order to impugn the validity of administrative action to which the duty of fairness applies. An insistence on this more demanding standard serves to enhance public confidence in, and thus the legitimacy of, public decision-making.
[31] However, what will constitute a reasonable apprehension of bias will depend on the context. For example, the nature of the decision-maker and the issues to be decided (Save Richmond Farmland Society v. Richmond (Township), [1990] 3 S.C.R. 1213), or the nature of a function performed by the agency (Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), [1992] 1 S.C.R. 623) may render the standard of reasonable apprehension of bias applied to an adjudicative tribunal incompatible with the proper functioning of the statutory scheme. Instead, judicial intervention may be appropriate only if a reasonable person would conclude that the decision-maker had a closed mind.
[32] I also note that it has been held that a decision of the Public Service Commission Appeal Board under the Public Service Employment Act, RSC 1985, c. P-33, may not be set aside for a reasonable apprehension of bias, on the ground that only actual bias would subvert the merit principle which the Board must apply in its selection of successful candidates: see, for example, Attorney General of Canada v. Bozoian, [1983] 1 F.C. 63 (F.C.T.D.); Canada (Attorney General) v. Mirabelli, [1987] F.C.J. No. 142 (F.C.A.) (QL).
[33] However, like my colleague Sharlow J. in Sudbury v. Canada (Attorney General), [2000] F.C.J. No. 1470 (F.C.T.D.) (QL), I would be very reluctant to regard these decisions as authority for the general proposition that the appearance of a reasonable apprehension of bias in the Board could never vitiate the selection of successful candidates. Such a conclusion would seem clearly to undermine the merit principle in public service appointments, and candidates' confidence that their applications have been assessed fairly and strictly on their merits.
[34] Another indication of judicial reluctance to pursue these decisions to their logical conclusion is found in Hnatiuk v. Canada (Treasury Board), (1994) 170 N.R. 364 (F.C.A.). In this case MacGuigan J.A. relied on the "repeatedly demonstrated animosity" by one Board member at the hearing towards a candidate to justify setting aside the decision, on the ground that "the actual bias of the ... Board could have interfered with selection by merit." The emphasis is mine. Similarly, when the Hnatiuk case was in the Court below ((1993) 65 F.T.R. 307 (F.C.T.D.)), Gibson J. had spoken of a "presumptive actual bias" arising from a reasonable apprehension of bias and clear, independent evidence that the applicant was qualified to succeed in the competition.
[35] It is not necessary to decide here whether the duty of fairness, as it applies to Appeal Boards, includes a reasonable apprehension of bias. However, in my opinion it is entirely compatible with the legal framework regulating the award of this procurement contract to require that those evaluating the bids must avoid conduct that gives rise to a reasonable apprehension that they were biased in favour of one bidder.
[36] I base this view on two grounds. First, the award of a contract governed by the Agreement is not essentially a policy-based decision to which it might be appropriate to apply the less stringent test of the appearance of a closed mind. The decision-making process for the award of procurement contracts involves the weighing of competing bids by reference to relatively objective criteria, as well as to a more subjective assessment of the suitability of the bidders as potential service providers, especially when, as here, they will be in an ongoing relationship with officials from the DFO during the performance of the contract.
[37] Second, the application of the more stringent test advances the objectives of the Agreement, in view of the importance of the transparency and fairness of the process, and the avoidance of "pork-barrelling" in the award of procurement contracts. If potential bidders lack confidence in the integrity of the way in which government contracts are awarded, they may be discouraged from submitting a bid, to the detriment of the public interest in obtaining the best value for money, and in ensuring that the competition is truly open to all.
[38] Nonetheless, like other aspects of the duty of fairness, the reasonable apprehension of bias test itself must be handled with a sensitivity to the decision-making context to which it is being applied. As a component of procedural fairness, bias is a pejorative notion and connotes a reasonable apprehension that the decision-maker may either have been influenced by some improper consideration, or made up her mind to an extent that is incompatible with the duty to hear.
[39] For example, it has been held that, since tenure decisions at universities are normally based on peer evaluation, the inclusion on the decision-making committee of a colleague who is already familiar with the candidate's work, and approaches the file with an opinion of the quality of that person's work, does not give rise to a reasonable apprehension of bias: Paine v. University of Toronto, (1981) 34 O.R. (2d) 770 (C.A.). Peer evaluation as a decision-making process contemplates that views formed over the years about a colleague's professional attainments form a valuable part of the basis for decisions.
[40] So, in the present context, the inclusion on the evaluation committee of two DFO officials who were familiar with personnel of PAL, as a result of having worked with them during the previous two contracts, cannot in itself constitute a reasonable apprehension of bias. To disqualify civil servants with valuable, direct knowledge of this kind to contribute to the decision would not serve the public interest in obtaining value for money in procurement contracts.
[41] Of course, familiarity, and the personal friendships that may develop from a working relationship, are not without their dangers for the integrity of the contract process, which is designed, in part, to ensure that incumbents do not have an undue advantage when a new contract is put out to tender. However, the inclusion on the evaluation committee of a sufficient number of persons who do not know the bidders (here, two out of four, including the head of the evaluation team) is an adequate safeguard against "cronyism".
[42] In my opinion, therefore, there is nothing in the nature of the decision-making context to exclude the normal requirement of the common law that those to whom the duty of fairness applies must avoid conduct that gives rise to a reasonable apprehension of bias. And, since the text of the Agreement is capable of being interpreted in a manner consistent with the common law, it should be so construed.
[43] Finally, it should be noted that, from the beginning, Cougar had been aware of the identity of the members of the evaluation committee and knew that two of them had worked with officials from PAL. Allegations of bias must normally be raised at the earliest practicable opportunity; if not taken in timely fashion, an objection will be regarded as waived. It cannot be used by the unsuccessful party to impugn the validity of the decision after the administrative process has been allowed to run its course without objection.
(iii) Applying the test
[44] In these circumstances, it is unnecessary for the Court to remit the matter to the Tribunal to decide whether, on the facts, there was a reasonable apprehension of bias. The parties argued the issue on the merits, no primary facts appeared to be in dispute and the question to be decided does not engage the specialized knowledge of the Tribunal so closely that the Court should defer its decision until the matter has first been decided by the Tribunal.
[45] Counsel for Cougar relied on the facts described below as giving rise to a reasonable apprehension of bias. In addition, counsel submitted, the process was unfair, because the committee had not adequately considered whether PAL's aircraft met the statement of work requirements. Moreover, counsel argued that, by refusing to extend the closing date for the bids again, the evaluation committee had failed to afford Cougar an adequate opportunity to adjust its bid in response to the amendment made to the mandatory contract requirements a mere nine days before the end of the tendering period. It will be convenient to deal together with both allegations.
(a) the evaluation process
[46] As evidence of bias, counsel for the applicant first relied on the failure of the committee to retain an independent outside expert on aircraft performance when it did not have the requisite technical expertise itself, despite a recommendation to this effect from PWGSC and the letter from Field Aviation casting doubt on whether PAL's aircraft were capable of meeting the 300mph dash speed requirement of the unamended work statement in the RFP. While PWGSC did consult Transport Canada on whether the King Air 200s complied with the contract requirements, it received only the unresponsive answer that PAL's aircraft had a certificate of airworthiness.
[47] I cannot regard these facts as giving rise to a reasonable apprehension of bias. They would seem more relevant to an argument that the committee's investigation of an issue was so inadequate that the process was likely to result in an arbitrary decision and thus to deprive the parties of their right to be fairly heard.
[48] However, whether the committee thought that it needed outside expert advice was a decision within its discretion as the body entrusted with responsibility for evaluating the bids. In the circumstances, I cannot conclude that the committee's duty to adopt a procedure that was adequate for this task required it, as a matter of procedural fairness, to retain an independent expert.
[49] In reaching this conclusion, I rely particularly on the following factors: the decision-making context; the minor discrepancy (8 mph) between the dash speed of PAL's aircraft as alleged by Field Aviation and the original requirement, especially given the somewhat imprecise concept of "dash speed"; the fact that this assessment came from a competitor who last worked on PAL's aircraft in 1986; the amount of information before the committee about the bidders and their equipment; the importance of factors in the award of the contract other than the dash speed of the aircraft; and the fact the successful tenderer was obliged to demonstrate within 60 days of being awarded the contract that its equipment did, indeed, perform as required.
[50] The committee's decision not to consult an outside expert was also said to have a special significance because two of its four members had known PAL officials as a result of the company's having provided aerial surveillance services during the previous ten years. However, as I have already indicated, the award of government contracts is a process in which those with relevant knowledge about one or more of the bidders and about their performance of previous contracts are properly included in the evaluation of the bids.
[51] At most, as the Tribunal found, the committee's process may have "unnecessarily exposed [the committee] to criticism." However, I am not persuaded that the Court should intervene, because a possible lack of prudence of this kind would not so undermine the legitimacy of the decision-making process in the mind of the reasonable person who is reasonably well informed about the facts, and has thought the matter through.
(b) amendments to the statement of work
[52] Counsel relied on three of the amendments to the statement of work attached to the RFP as evidence of a reasonable apprehension of bias in favour of PAL, particularly, of course, the amendment to the statement of work made on September 30, only nine days before the tendering period closed and hence too late to enable Cougar to modify its bid to take it into account.
[53] This amendment, it may be recalled, eliminated the required dash speed for aircraft to be used by the contractor and, in effect, redefined the speed requirement by specifying the distance that the aircraft had to be able to reach within an hour of take-off. Under the original requirement, counsel for Cougar argued, PAL's aircraft did not meet this mandatory requirement, whereas after its amendment they did.
[54] At the same time, by stating that the King Air 200 aircraft met DFO's requirements, PWGSC was said to have "pre-qualified" PAL's aircraft. Previously, the committee had refused to supply a list of aircraft that met the contract requirements.
[55] In my opinion, the amendment of September 30 did not give rise to a reasonable apprehension of bias. The Tribunal found that it was of relatively little importance, and accepted that its purpose was to reflect more accurately the needs of the DFO, rather than to effect a significant change to the performance specifications of the aircraft.
[56] As for the allegation of "pre-qualification", the committee again merely clarified a requirement in response to a question from a bidder; it did not state that only the King Air 200 aircraft met DFO's requirements. Hence, a reasonable person, who had informed himself of the facts, would not have concluded that the amendments evidenced bias in favour of PAL.
[57] Similarly, the committee's failure to grant a further extension of the tendering period after the amendment of September 30 cannot be considered evidence of bias. It was within the discretion of the committee to decide whether another extension of time was appropriate. As the Tribunal found, the September 30 amendment was not so fundamental in nature that the duty of fairness required the committee to grant it.
[58] Moreover, since Cougar did not request an extension of the last date for submitting bids, counsel cannot now claim that the lack of additional time in which to adjust its bid in response to the amendment denied Cougar a reasonable opportunity to participate in the tendering process.
(c) conclusion
[59] In my opinion, even when considered cumulatively, the grounds advanced by the applicant for impugning the impartiality and fairness of the tendering process do not establish a breach of the duty of fairness. Decisions made in the course of the decision-making process that are perceived by a participant to be adverse to its interests will normally not suffice to prove a reasonable apprehension of bias in the decision-maker. Nor does the duty of fairness require a decision-maker to adopt the best possible process for arriving at the "right" decision.
| Issue 2: Was it a breach of the duty of fairness for the Tribunal to refuse to hold an oral hearing into Cougar's complaint and, instead, to decide to confine the parties to written submissions? |
[60] Subsection 30.13(1) of the Canadian International Trade Tribunal Act provides that, subject to the regulations, and when satisfied that a complaint has been duly filed, the Tribunal "shall decide whether to conduct an inquiry, which inquiry may include a hearing." Further, subsection 105(1) of the Canadian International Trade Tribunal Rules provides that the Tribunal
| may, ... hold a hearing on the merits of a complaint. |
peut, ... tenir une audience visant à déterminer le bien-fondé d'une plainte. |
It is clear from the rest of this section, and from the French text, that "hearing" in subsection (1) refers to an oral hearing.
[61] The duty of fairness does not always require that those entitled to participate in the making of a decision be afforded an oral hearing: Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, 843-44. Hence, it cannot be said that subsection 105(1) of the Rules is ultra vires because it permits the Tribunal to choose a written procedure. Further, the possibility that the Tribunal may conduct its inquiry other than by oral hearing is clearly contemplated by subsection 30.13(1) of the Act.
[62] In this case, the Tribunal decided that there was sufficient information on the record before it to determine the dispute without the need for an oral hearing. Hence, in order to succeed on this issue, the applicant must establish that, in the circumstances of this case, written submissions did not afford it a reasonable opportunity to participate effectively in the decision-making process. Of course, the Tribunal must not exercise its discretion in a manner that results in manifest unfairness, but the Court should not lightly substitute its judgment for that of the Tribunal on whether an oral hearing is required to conduct an adequate inquiry into Cougar's complaint.
[63] Counsel for the applicant argued that the Tribunal's acknowledgement in its reasons that it was difficult to assess the impact of PWGSC's amendments indicated that the issue could not adequately be determined on the basis of written submissions alone. Hence, in order to resolve the conflicting evidence in the parties' written submissions, a full evidential hearing should have been held at which witnesses could be examined and cross-examined
[64] I cannot accept this submission. An oral hearing is not required by the duty of fairness merely because conflicting evidence on an issue may make it difficult to resolve. Hearings do not necessarily resolve all such difficulties. In my opinion, the nature of neither the decision to be made, nor the issues in dispute, required an oral hearing to enable the Tribunal to discharge its duty to investigate Cougar's complaint in a procedurally fair manner.
[65] Counsel suggested that issues of credibility were at stake and that only after an oral hearing could the issues be resolved satisfactorily. In my opinion, however, the principal issue was not one of credibility of those who had supplied information to the evaluation committee. Rather, it involved an assessment of the importance of the removal of the dash speed requirement for Cougar's bid, based on the documentation available to the committee.
[66] Counsel's argument on this point seems little more than a reiteration of the submission considered previously, namely that the committee ought to have consulted an independent expert before awarding the contract to PAL. However, an oral hearing was not necessary for this purpose. Given the amount of material that the Tribunal had before it, the nature of the issue for which an oral hearing was sought, and the fact that its powers are limited to making recommendations on whether a contract should be cancelled, the Tribunal could investigate Cougar's complaint in accordance with the duty of fairness without holding an oral hearing.
[67] Finally, I should add that Cougar's failure to request an oral hearing would also have been fatal to its claim that the written procedure was inadequate to discharge the duty of fairness owed by the Tribunal.
| Issue 3: Did the Tribunal err in law when it held that, for the purpose of subsection 6(2) of the Canadian International Trade Tribunal Procurement Inquiry Regulations, the applicant's letter of October 9 did not constitute an "objection" on issues not specifically raised in it? |
[68] Subsection 6(2) provides that, when a potential supplier has made an objection to the relevant government department about the procurement process followed in respect of a particular contract, the supplier may file a complaint with the Tribunal within 10 days of being denied relief by that institution,
| if the objection was made within 10 working days after the day on which its basis became known or reasonably should have become known to the potential supplier. |
s'il a présenté son opposition dans les 10 jours ouvrables suivant la date où il a découvert ou aurait dû vraisemblablement découvrir les faits à l'origine de l'opposition. |
| [69] The Tribunal held that Cougar's letter of October 9 to the PWGSC could only be considered as an "objection" to those aspects of the procurement process to which it expressly refers. Therefore, subsection 6(2) did not apply to other grounds of the complaint that Cougar filed with the Tribunal on January 22, 1999, after the award of the contract had been announced. Hence, subsection 6(1) contained the limitation period applicable to PWGSC's failure to reply to Cougar's letter of September 23, the refusal to extend the date for the submission of bids, and the requirement of letters of intent from bidders. |
| [70] The provisions of subsection 6(1) relevant for present purposes are as follows: |
| Subject to subsections (2) and (3), a potential supplier who files a complaint with the Tribunal in accordance with section 30.11 of the Act shall do so no later than 10 working days after the day on which the basis of the complaint became known or reasonable should have become known to the potential supplier. |
Sous réserve des paragraphes (2) et (3), le fournisseur potentiel qui dépose une plainte auprès du Tribunal en vertu de l'article 30.11 de la Loi doit le faire dans les 10 jours ouvrables suivant la date où il a découvert ou aurait dû découvrir les faits à l'origine de la plainte. |
| [71] Counsel for Cougar submitted that subsection 6(2) governed all aspects of Cougar's complaint because the letter sent by the company to PWGSC on October 9 was an objection to the fairness of the entire process, and was not limited to the issues specifically discussed in it. Accordingly, since Cougar had not received a response, and hence had not been denied relief by PWGSC, the limitation period contained in subsection 6(2) had not started to run against it. |
| [72] In response to the argument that a potential supplier must specify the particular aspect of the tendering process to which objection is being made, counsel submitted that it was the policy of the Agreement to encourage the informal resolution of complaints, rather than to force dissatisfied bidders to resort to the more expensive and slower process of the Tribunal. It would bog down decision-making with needless formalities to require that, for a complex contract such as this, every issue must be described precisely. |
| [73] I cannot accept this submission. First, it was reasonably open to the Tribunal not to construe Cougar's letter of October 9 as a general complaint about the process, since it specified, and not by way of example, particular matters with which Cougar was dissatisfied. These did not include those that the Tribunal found to be time-barred. |
| [74] Second, even if the letter did purport to be a complaint about the general lack of fairness in the tendering process, it would not in my view constitute an "objection" for the purpose of subsection 6(2). If the informal procedure for settling complaints is to be effective, an objection must be described with sufficient specificity as to enable the Department to deal with it. |
| [75] The Tribunal was not in error, therefore, when it held that Cougar was out of time to complain to the Tribunal about matters that it had not clearly raised earlier with the PWSGC, and that had occurred more than ten working days before the company filed its formal complaint with the Tribunal. |
| Issue 4: Did the Tribunal make erroneous findings of fact in a perverse or capricious manner, or without regard for the evidence before it, when it found that the amendments to the RFP made on September 30 were not substantial in nature, and that in its response to a question about the aircraft currently used by PAL to perform its contract, PWGSC had not "pre-qualified" PAL's aircraft? |
| [76] The standard of review applicable to findings of fact by the Tribunal is set out in paragraph 18.1(4)(d) of the Federal Court Act. I was not persuaded that the findings of fact by the Tribunal of which Cougar complains were made in a perverse or capricious manner, or without regard for the material before it. |
| [77] Suffice it to say that it is difficult for an applicant to persuade the Court to intervene on this ground, especially when, as here, the findings are on technical matters within the Tribunal's expertise and, because they contain an element of assessment, require an exercise of informed judgment on the part of the Tribunal. |
| F. CONCLUSIONS |
| [78] For these reasons I would dismiss the application for judicial review with costs. |
| "John M. Evans" |
| J.A. |
| "I agree |
| A.M. Linden J.A." |
| "I agree |
| K. Sharlow J.A." |