The Canadian International Trade Tribunal has issued a scathing indictment of how the federal government’s IT agency has invoked national security exceptions on big ticket purchases.
At issue was, among other things, a complaint from computer company Hewlett-Packard that Shared Services Canada had wrongly and arbitrarily invoked a national security exception on the $430-million contract for a powerful new weather-predicting supercomputer for Environment Canada. The contract, awarded in May 2016, also includes cloud storage, training, vendor support and maintenance.
National security exceptions exempt the government from trade rules that require bidders be treated equally, and allow it to set conditions that equipment be made in certain countries or that data must be stored or processed in Canada.
In a decision handed down on March 20, which was only today posted to the tribunal’s web site, presiding member Serge Fréchette found the Hewlett-Packard bid had not been entirely compliant with the contract’s mandatory criteria.
Harsh words for SSC
Yet Fréchette had harsh words for how Shared Services Canada (SSC) continues to fight anyone who questions its use of national security exceptions (NSEs) in procurement. He took particular issue with how the agency continues to argue the tribunal lacks jurisdiction to hear such complaints.
“SSC, in effect, treats the NSE as a general licence to void potential suppliers’ right to seek review of government actions at the tribunal,” he wrote. “SSC’s stance is wrong because it ignores the text and purpose of the trade agreements and the tribunal’s mandated role as set out by Parliament and the courts.”
Fréchette also heaped scorn on claims from SSC that it is entitled to circumvent the trade tribunal without providing any justification, despite having been already twice rapped on the knuckles for making the same arguments in two earlier cases.
“SSC again attempted here to revisit this issue, despite it having been settled by previous cases at the tribunal, which were not challenged in the courts,” he wrote.
As for the blanket NSE itself, Frechette said the scope of its application is of concern.
“If a government institution’s discretion in this regard is left unchecked, the tribunal believes that such a level and scope of exclusionary power is so significant that it could constitute a de facto nullification and impairment of the benefits of the trade agreements by arguably subtracting SSC entirely as a covered entity,” he wrote.
SSC may have to rethink policy
The lawyer for Hewlett-Packard declined to comment on the ruling, but University of Ottawa law professor Sébastien Grammond said he thinks the agency is going to have to rethink its blanket NSE policy.