The Canadian International Trade Tribunal has dismissed requests from the federal government to stop its inquiry into the purchase of a powerful new weather-predicting supercomputer for Environment Canada.
The government’s troubled IT agency, Shared Services Canada, had asked the tribunal to “cease its inquiry” into a complaint brought by computer company Hewlett-Packard.
Shared Services Canada (SSC) awarded the comprehensive, multi-year, $430-million contract to IBM Canada last spring.
Hewlett-Packard, which was among three other companies invited to compete for the job, argues the government wrongly and arbitrarily invoked a national security exception on the entire procurement process.
National security exceptions
National security exceptions exempt the government from trade rules that require bidders be treated equally, that equipment must be made in certain countries and data should be stored or processed within Canada.
In its court filing, Hewlett-Packard points to an affidavit from SSC’s director general of procurement and vendor relationships that reveals more than 1,000 procurements were covered by national security exceptions in the 2016-17 fiscal year alone.
Lawyers for SSC said the high-performance meteorological computer, in addition to forecasting the weather for Canadians, can also process data, “to provide strategic support to Department of National Defence missions worldwide, to allow Health Canada to assess the transport and dispersion of nuclear and other hazardous materials released into the atmosphere, and to provide severe warnings to air traffic controllers and other transportation officials.”
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In addition to not having jurisdiction to hear a matter subject to a security exception, SSC said the decision to invoke the measure was made before the procurement process started. In its point of view, the department said that means its decision to invoke the exception may only be reviewed by the Federal Court.
SSC also said Hewlett-Packard’s complaint about the improper invocation was untimely because the company waited until it lost the contract to raise its concerns about the security exception.
In his decision, presiding tribunal member Serge Fréchette wrote that not only does the trade tribunal have jurisdiction but that “the complaint is timely.” Fréchette said he would provide complete reasons for denying the government’s motion at the end of the tribunal’s work. Inquiries typically take two or three months.
SSC filed its motion just three days after CBC News reported how frequently the federal government is imposing national security exceptions on purchases, big and small.
Tribunal critical of exceptions
For years, companies in the same situation as Hewlett-Packard sought redress from the trade tribunal, only to be told it had no jurisdiction when a national security exception had been invoked.
Recently though, the tribunal has started to make noises about the integrity of the competitive procurement system. Last February, the trade tribunal harshly criticized the government’s blanket invocation of national security exceptions and in August, 2016 it broke new ground by finding SSC “breached the trade agreements by failing to properly tailor the scope of the exception” in a case involving the purchase of night-vision binoculars for the RCMP.
SSC addressed that decision in its Dec. 15 motion to cease the inquiry by saying it would not be “operationally feasible for senior officials at SSC” to invoke national security exceptions on a case by case basis.
Environment Canada scientists started testing the technology in August 2016, and it is expected to be fully up and running this spring.
In addition to filing a complaint at the trade tribunal, Hewlett-Packard has asked the Federal Court to determine if SSC applied the exception appropriately.
“By invoking a blanket NSE, Public Services and Procurement Canada has improperly and unlawfully sought to immunize itself from scrutiny and compliance with the procurement rules set out in domestic and international trade agreements,” the company said in its submission.