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Aerospace Facilities Group, Inc. v. PWGSC, CITT PR-2017-015

In August 2016, the Department of Public Works and Government Services (“PWGSC”) issued an RFP on behalf of the Department of National Defence (“DND”) for dry media blasting cabinets. Four bids were accepted, including one from Aerospace Facilities Group, Inc. (“Aerospace”), which was held to be compliant and was ultimately successful as the lowest-priced bidder – however, the other compliant bidder, Pauli Systems Ltd. (“Pauli”) expressed concern about the award as soon as it was issued. After several meetings and Stop Work Orders took place, the CITT accepted Pauli’s complaint that Aerospace was unable to supply the goods specified in the RFP, and PWGSC terminated the contract about three months after it had been awarded.

Aerospace issued a complaint to the CITT that PWGSC had made an unjustified and unfair decision in terminating the contract, and requested that the contract be reinstated under the original terms and conditions of the contract or that Aerospace be compensated for lost profits. Ultimately, the CITT determined that it did not have the jurisdiction to decide on the matter as it concerned a cancellation of a contract rather than an aspect of the procurement process itself – but did express its concern about both parties’ actions in the matter, particularly given that the procurement was for important military goods:

24. At the outset, the Tribunal wishes to express its considerable concern in respect of the events which led to the cancellation of AFG’s contract. The evidence, including the multiple amendments and correspondence between the Technical and Procurement Authority, reveals a lack of attention to major specifications of the very important goods which were being procured for the Canadian military. The Tribunal struggles to understand how the procurement proceeded as far as it did with this level of confusion as to basic contractual matters, such as the precise specifications of the goods being procured. [Emphasis added.]

This kind of concern is unusual for courts and tribunals to express so openly, and this case may well be seen again in the court system. Meanwhile, the CITT’s comments serve as an important reminder that proper planning must happen before RFPs are issued and proposals submitted, as cancelling aspects of the process – or even cancelling the contract – may not always be an appropriate solution.

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case.  For any particular legal problem, seek advice directly from your lawyer or in-house counsel.  All dates, contact information and website addresses were current at the time of original publication.