For decades, Canada has implemented international trade agreements that require federal government procurement to be conducted in in an open, transparent, and non-discriminatory manner. The recently implemented Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is, however, the first international free trade agreement that guarantees market access and non-discriminatory treatment by sub-central governments (provincial, territorial and municipal governments and entities). This represents significant opportunities for EU suppliers.
It is advisable that EU suppliers familiarize themselves with the general legal principles and rules applicable to government procurement opportunities in Canada prior to investing significant resources in the Canadian market. While the CETA is new, procurement-related trade agreements have been judicially considered in Canada for over 25 years. A notable aspect of Canadian procurement law is that, in many procurements, the judiciary will impose a “duty of fairness” on government purchasers. That duty of fairness creates an obligation to treat all participants in the procurement process equally and fairly.
The range of issues that EU suppliers may face could include:
- Whether onerous terms and conditions such as unlimited liability or perpetual assignment of IP rights are commercially acceptable;
- Whether the winning bidder submitted a technically compliant proposal;
- Whether the procuring entity is permitted to repair minor errors or irregularities;
- Whether the evaluators properly evaluated the proposals in accordance with the terms and conditions of the solicitation;
- Whether the evaluators introduced undisclosed evaluation criteria into the evaluation process;
- Whether a bidder was in a conflict of interest, or was otherwise afforded an unfair advantage;
- Whether the specifications are improperly biased towards a single bidder;
- Whether the government purchasing authority permitted an improper “bid repair”, i.e., by allowing a bidder to supplement or ‘fix’ their non-compliant proposal through revised or additional submissions after the bid closing date;
- Whether the winning proposal was submitted after the bid closing period. In Canada, proposals that are submitted after the time and date at which a bid period closes must, as a general proposition, be rejected;
- Whether evaluators ignored vital information contained in the proposal; and
- Whether the government purchasing authority undertook improper “bid shopping” by negotiating with two or more bidders after the submission of their respective proposals.
These examples demonstrate the range of issues that an EU supplier may face when competing in Canada.
On a final point, most jurisdictions in Canada require bidders to raise concerns as soon as possible. For instance, at the federal level, most procurements are subject to a limitation period of 10 working days to commence procurement challenges. This is another reason why EU suppliers must understand their rights in advance of bidding – because failure to immediately identify a breach may preclude the EU supplier from challenging the procurement.
The lawyers at Tereposky & DeRose have significant experience advising domestic and foreign suppliers on the full range of issues that arise in Canadian procurement processes including formulation of procurement strategies, analysis of solicitation documents, preparation of teaming agreements and subcontracting agreements, assessments of contractual terms and conditions, the development of procurement proposals and representing suppliers in bid challenge disputes.
If you would like to discuss any aspect of Canadian procurement under the CETA, please contact Vince DeRose at: