Stack of Canadian $100 bills shooting into air representing cost of the federal rfp cancellation

Background on why The Federal Government Cancelled this RFP

A major lawsuit prompted by the federal government’s cancellation of an RFP is starting to make its way through the Ontario courts, raising interesting procurement law principles. The first reported decision is procedural, and gives a glimpse of the parties’ positions and the scope of the battle.

In 2015, PWGSC issued an RFP on behalf of Immigration, Refugees and Citizenship Canada (IRCC) for the operation of visa application centres at Canadian consulates. The incumbent, VF Worldwide, submitted a bid in response, as did the plaintiff, Bronson Consulting. A key aspect of Bronson’s bid was that its services would cost the Canadian government nothing, as it proposed to pass all costs on to visa applicants.

PWGSC cancelled the RFP before the evaluation process was completed, then reissued it with changes. PWGSC issued the contract to the incumbent, and Bronson sued for $195 million in damages, arguing that a “Contract A” had been formed before the RFP’s cancellation. Bronson claimed breach of contract, fiduciary duty and confidentiality obligations.

On this application, Bronson sought more details underlying PWGSC’s defence – and brought a motion for particulars to assist in narrowing the issues in dispute before trial.

Court Decision

In Bronson Consulting Inc. v. Attorney General of Canada, 2019 ONSC 2436, the court’s consideration of Bronson’s motion illuminates the issues and magnitude of the parties’ differences. Bronson sought specifics on the value of the contract (which it argued was worth $850 million), make-up of the evaluation team, and the serious policy distortions that caused the cancellation of the first RFP.

The extent of the particulars sought, and mainly denied by the court, shows that the heart of the dispute is the $0 bid, with all costs passed on to applicants, and how and why PWGCS revised the RFP to address this. It seems that PWGSC was concerned about the effect of a complete cost recovery model on immigrants, tourists, students, and temporary workers, and the broad socio-economic impact on the country. A major issue will be whether damages can flow from a cancelled RFP, and if yes, the quantification of damages. Also – duties owed to proponents during the conduct of an RFP will certainly be a live issue.

Since this decision there have been a number of other interim procedural motions, and trial on the substantive issues in the claim has yet to take place.

Stay tuned to The Legal Edge as we continue to follow this one!

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.