Selex Sistemi Integrati S.p.A. v. Canada (Attorney General) et al., (2014) 450 F.T.R. 279 (FC)

• Judge: Gagné, J.
• Court: Federal Court (Canada)
• Case Date: January 28, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2014), 450 F.T.R. 279 (FC);2014 FC 263

Selex Sistemi Integrati S.p.A. v. Can. (A.G.) (2014), 450 F.T.R. 279 (FC)

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Temp. Cite: [2014] F.T.R. TBEd. MR.051

Selex Sistemi Integrati S.p.A. (applicant) v. Attorney General of Canada and EADS Deutschland GmbH (respondents)

(T-809-13; 2014 FC 263; 2014 CF 263)

Indexed As: Selex Sistemi Integrati S.p.A. v. Canada (Attorney General) et al.

Federal Court

Gagné, J.

March 19, 2014.

Summary:

Public Works and Government Services Canada declared Selex Sistemi Integrati S.p.A.'s bid in response to a Request for Proposal (RFP) to be non-compliant as the sale of virtually all of Selex's assets to a newly created sister company during the bidding process was contrary to the RFP's non-assignment clause. Public Works awarded the contract to another bidder. Selex applied for judicial review.

The Federal Court dismissed the application.

Administrative Law - Topic 2443

Natural justice - Procedure - Notice - Delay - Selex Sistemi Integrati S.p.A. was the low bidder in response to a Request for Proposal (RFP) issued by Public Works and Government Services Canada - Public Works declared Selex's bid to be non-compliant in that the sale of virtually all of Selex's assets to a newly created sister company during the bidding process was contrary to the RFP's non-assignment clause - Selex applied for judicial review, asserting that it should have been told that its bid was non-compliant prior to the bid being awarded to another bidder - Selex asserted that the failure to do so breached its procedural rights as it prevented it from obtaining an injunction or a stay order prohibiting the award - The Federal Court rejected the assertion - The fact that Selex could have been advised earlier of the decision would not have changed the course of events as Public Works' decision was compliant with the RFP and fair to all bidders - Additionally, Public Works followed its own published standard practices by not advising bidders of non-compliance before the contract was awarded - That standard practice was intended to be fair to all bidders and to prevent attempts at "bid repair" - See paragraphs 47 to 50.

Building Contracts - Topic 1302

Tender calls - General - Duty of care (incl. fairness) - [See Administrative Law - Topic 2443 ].

Building Contracts - Topic 1310

Tender calls - General - Invitation to tender - Effect of conditions of - Selex Sistemi Integrati S.p.A. was the low bidder in response to a Request for Proposal (RFP) issued by Public Works and Government Services Canada - Public Works declared Selex's bid to be non-compliant in that the sale of virtually all of Selex's assets to a newly created sister company during the bidding process was contrary to the RFP's non-assignment clause - Selex applied for judicial review, asserting that Public Works erred in its interpretation of the assignment clause - The Federal Court rejected the assertion - To transfer or assign assets, the transferor/assignor and transferee/ assignee had to be separate identities - The transferred or assigned assets passed from the hands of the transferor/assignor to the hands of the transferee/assignee - A transfer or assignment of a bid, in whole or in part, had the practical effect of changing the bidder during the bidding process - Moreover a transfer or assignment of virtually all of the bidder's assets had the practical effect of rendering the bidder no longer capable of meeting the technical and management requirements of the RFP - See paragraphs 37 to 40.

Building Contracts - Topic 1310

Tender calls - General - Invitation to tender - Effect of conditions of - Selex Sistemi Integrati S.p.A. was one of a number of Italian companies owned by Finmeccanica S.p.A - Selex was the low bidder in response to a Request for Proposal (RFP) issued by Public Works and Government Services Canada - During the bidding process Finmeccanica did a corporate reorganization in which two of Selex's sister corporations were merged to create Selex ES - All of Selex's assets, operations, and personnel and administrative infrastructure were transferred to, and integrated into, Selex ES - Selex remained as a shell company to be wound down in the near future - Public Works concluded that the reorganization contravened the RFP's non-assignment clause and declared Selex to be non-compliant - Selex applied for judicial review, asserting that the transfer and integration of its business complex to Selex ES had the practical effect and operational consequence of a merger by operation of Italian law - The Federal Court dismissed the application - The question of whether a merger should have been considered compliant with the non-assignment clause was irrelevant - The court further noted that Selex and/or Finmeccanica were fully aware of the difference between a merger and a sale of assets - They made a business decision to merge Selex's sister corporations into Selex ES, but not to do so for Selex - Selex failed to properly consider the consequences of that decision as it related to its bid - As a result, Public Works was bound by the RFP to consider the bid non-compliant - A failure by Public Works to have proceeded in that way could have been considered unfair towards other bidders - The decision was not only reasonable, it was the only one that could have been made in the circumstances - See paragraphs 41 to 46.

Building Contracts - Topic 1320

Tender calls - General - Judicial review - Public Works and Government Services Canada issued a Request for Proposal (RFP) for the procurement of integrated area surveillance radar and secondary surveillance - Public Works declared the bid by the low bidder (Selex) to be non-compliant in that the sale of virtually all of Selex's assets to a newly created sister company during the bidding process was contrary to the RFP's non-assignment clause - Public Works awarded the contract to another bidder - Selex applied for judicial review, asserting that, inter alia, Public Works erred (1) in its interpretation of the RFP's non-assignment clause and (2) in determining that Selex had rendered its bid non-compliant by the corporate reorganization and therefore breached the non-assignment clause - The Federal Court reviewed the first issue on the standard of correctness and the second issue on the standard of reasonableness - See paragraphs 30 to 36.

Contracts - Topic 1263

Formation of contract - Tender calls - Duties - [See Administrative Law - Topic 2443 ].

Contracts - Topic 1272

Formation of contract - Tender calls - Evaluation of bids (incl. bid repair) - [See Administrative Law - Topic 2443 and both Building Contracts - Topic 1310 ].

Contracts - Topic 1276

Formation of contract - Tender calls - Breach of tender - General - [See both Building Contracts - Topic 1310 ].

Crown - Topic 1014

Contracts with Crown - General principles - Request for proposal (RFP) - [See Administrative Law - Topic 2443 and both Building Contracts - Topic 1310 ].

Cases Noticed:

I.M.P. Group Ltd. v. Canada (Minister of Public Works and Government Services) et al. (2006), 303 F.T.R. 192; 2006 FC 1223, affd. (2007), 371 N.R. 36; 2007 FCA 318, refd to. [para. 31].

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 31].

Leahy v. Canada (Minister of Citizenship and Immigration) (2012), 438 N.R. 280; 2012 FCA 227, refd to. [para. 31].

Sellathurai v. Canada (Minister of Public Safety and Emergency Preparedness) (2008), 382 N.R. 2; 2008 FCA 255, refd to. [para. 32].

Bot Construction Ltd. et al. v. Ontario et al., [2009] O.A.C. Uned. 631; 2009 ONCA 879, refd to. [para. 33].

St. Lawrence College of Applied Arts and Technology v. Canada, [2009] F.T.R. Uned. 390; 2009 FC 545, refd to. [para. 33].

Halifax Shipyard Ltd. v. Canada (Minister of Public Works and Government Services) (1996), 113 F.T.R. 58 (T.D.), refd to. [para. 33].

Robert v. Canada (Attorney General) (2012), 420 F.T.R. 129; 2012 FC 1227, refd to. [para. 34].

Envision Credit Union v. Minister of National Revenue (2013), 448 N.R. 305; 2013 SCC 48, refd to. [para. 38].

Ron Engineering & Construction (Eastern) Ltd. v. Ontario and Water Resources Commission, [1981] 1 S.C.R. 111; 35 N.R. 40, refd to. [para. 45].

Counsel:

Mandy Moore, for the applicant;

Glynis Evans and Karen Lovell, for the respondent.

Solicitors of Record:

Mandy Moore, Ottawa, Ontario, for the applicant;

Glynis Evans and Karen Lovell, Toronto, Ontario, for the respondent.

This application was heard at Ottawa, Ontario, on January 28, 2014, by Gagné, J., of the Federal Court, who delivered the following reasons for judgment on March 19, 2014.