The Canadian International Trade Tribunal has dismissed a complaint by warship bidder Alion, clearing one more obstacle in the way of Ottawa awarding a design contract for its new fleet.
The decision, issued earlier this week, references two motions, one filed by Public Services and Procurement Canada and another filed by Irving Shipbuilding, an intervener in the case. Both motions argue that the Alion does not have standing to bring the complaint before the Canadian International Trade Tribunal (CITT), and that the CITT does not have jurisdiction to conduct the inquiry. Additionally, Irving’s motion argues that Alion’s complaint is premature.
CITT’s dismissal of the complaint was not related to the content of Alion’s complaint, but to a section of the body’s regulations dealing with various trade agreements. A spokesperson from the CITT said a more detailed document outlining the reasons behind the dismissal will be released in the near future.
In late November, the CITT, an independent quasi-judicial body dealing with matters of international trade, wrote a letter to Public Services and Procurement Canada ordering the department to postpone the award of any contracts related to the Canadian Surface Combatant project while it investigated a complaint from competing bidder Alion.
Then, in a letter to Public Services and Procurement Canada dated Dec. 10, the CITT rescinded its original postponement of award of contract direction issued to the federal government after receiving a letter from PSPC saying that the procurement is urgent and “a delay in awarding the contract would be contrary to the public interest.”
The matter was still under investigation by the CITT up until they dismissed the complaint on Wednesday.
A spokesperson for Alion said the company had no further comment at this time as they are waiting for CITT to release the reasons behind the decision, but said they are continuing to pursue all options.
In an emailed statement, a spokesperson for Public Services and Procurement Canada said the department is pleased with the CITT’s ruling.
“We have full confidence in our process, and continue to work toward awarding a contract for the design and design team for the future Canadian Surface Combatants.”
David Perry, senior analyst with the Canadian Global Affairs Institute said the dismissal is good news for proponents of the Canadian Surface Combatant procurement as it’s just another obstacle in a lengthy process that has been avoided.
“I imagine there is a fair number of procurement officials that are breathing a fairly hardy sigh of relief after that,” he said.
Alion’s complaints to the tribunal centre around Ottawa’s plan to purchase 15 new warships for the Royal Canadian Navy. Worth billions and spanning decades, it’s the single largest procurement contract in Canadian history.
Back in October, a bid from Lockheed Martin Canada was identified by the federal government as the preferred design for Canada’s new fleet of warships after a lengthy and sensitive competition. The Canadian Surface Combatant project will see 15 warships built at Irving Shipyards in Halifax for between $56 billion and $60 billion.
Lockheed Martin’s bid beat out offerings from two other competing consortiums: Alion, which offered up Dutch De Zeven Provinciën Class air defence and command frigate, and Navantia/SAAB’s design based on the F-105 anti-submarine frigate design for the Spanish navy.
In submissions to both the CITT and Federal Court, Alion alleges that the BAE Systems Type 26 Global Combat Ship design offered by Lockheed is incapable of meeting three critical and mandatory requirements of the Request for Proposals that the firms crafted their bids around: two requirements concern the vessels’ speed, and one deals with the number of crew berths.
Alion argues in its original submissions that the Request for Proposals required PSPC and Irving to reject Lockheed’s bid because of its non-compliance. Instead, the federal government and Irving Shipbuilding announced Lockheed as the preferred bidder and has entered into the conditions precedent period. This is the step immediately prior to awarding the definition subcontract between Irving, the prime contractor and shipbuilder, and Lockheed, the warship designer. Lockheed has stated that their design does meet all requirements.
Alion still has two cases before Federal Court, one asking the court to overturn the government’s decision to select Lockheed Martin as the preferred bidder, and another asking the court to overturn the CITT’s decision to rescind its contract award postponement notice.
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