Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada's CITT Dismisses Procurement Complaint re Services as Below Threshholds

On January 5, 2010, the Canadian International Trade Tribunal made a decision to not initiate a inquiry into a procurement bid challenge filed at A-1 Cleaners against the Department of National Defence for cleaning and janitorial services. The estimated value of the contract at issue was $59,800. After the existing contract had expired, the contract was not competitively listed on MERX and was awarded to the existing company. The Complainant was a potential bidder who wanted to pursue the opportunity, The Complainant acted on its own behalf in the request for an inquiry pursuant to subsection 30.11 of the Canadian International Trade Tribunal Act (Canada).

This case reminds us of the monetary thresholds for services contracts. The Tribunal determined it did not have jurisdiction to conduct an inquiry because the value of the contract was too low:

To be considered a designated contract, a contract for the supply of goods and services must meet the monetary thresholds prescribed by the trade agreements. The monetary thresholds for procurement of services are $100,000 under the Agreement on Internal Trade $76,500 under the North American Free Trade Agreement and the Canada-Chile Free Trade Agreement and $217,400 under the Agreement on Government Procurement.

The various procurement bid challenge provisions in trade agreements contain monetary thresholds so that low value contracts are not subject to the bureaucratic red tape required by open procurement policies. In short, it is a matter of allocation of resources and government resources are not to be tied up when the value of the services to be procured is low. Sounds fair.

Please note that the thresholds are higher for construction contracts involving the provision of goods and services.

Please note that the Canada- Israel Free Trade Agreement, the Canada-Costa Rica Free Trade Agreement and the Canada-EFTA Free Trade Agreement do not contain government procurement chapters. The Canada-Peru Free Trade Agreement does have a government procurement chapter (Chapter 14) - http://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/Canada-PeruFTA_chapter14-en.pdf

For a copy of the decision, please go to the following link - http://www.citt.gc.ca/procure/determin/pr2j068_e.asp

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