Attorney General of Canada V. Rapiscan Systems Inc.: Reflections on the Challenge of Judicial Review in Government Procurement

By Greene, Samuel | University of Toronto Faculty of Law Review, Fall 2016 | Go to article overview

Attorney General of Canada V. Rapiscan Systems Inc.: Reflections on the Challenge of Judicial Review in Government Procurement


Greene, Samuel, University of Toronto Faculty of Law Review


Canadian governments spend vast sums of money purchasing goods and services. As of 2008-2009, Public Works and Government Services Canada stated that it was a party to contracts worth some $18 billion, many of which were entered into following competitive bid processes. (1) Consequently, it is unsurprising that government procurement decisions frequently result in litigation. (2) Troublingly, however, recent jurisprudence from the Federal Court and Federal Court of Appeal threatens to make that litigation more complicated and unpredictable.

In particular, the Federal Court and Federal Court of Appeal decisions in Attorney General of Canada v Rapiscan Systems Inc. (3) have raised the following question: when should unsuccessful participants--or, indeed, non-participants--in government tendering processes be entitled to administrative law remedies against a government agency? This is a vexing question to which Canadian courts have given various and contradictory answers. No clear or consistent answer can be found in the jurisprudence of the Supreme Court of Canada. An answer, however, is clearly needed. Government agencies must know the scope of their liability in order to structure their affairs. Bidders and other market participants must know their rights and potential remedies. Indeterminacy in this arena--and the complex and protracted litigation associated with it--is costly for all involved, particularly taxpayers. In short, this is an issue ripe for clarification by our highest court.

In this comment, I use Rapiscan as to illustrate how and why Canadian courts have lost their way in using administrative law to review government tendering. I then propose a means of getting back on track. My ultimate argument is simple: the principles of contract law--and only those principles--should govern public procurement disputes except in very particular and limited circumstances (which this comment will outline). Such a result is right in principle. It is also right as a matter of policy. Since administrative law review exists to uphold the rule of law and to encourage good governance, the central challenge I must address is this: is contract law, on its own, sufficient to achieve these goals in the context of government tendering?

I argue that contract law is up to that challenge. In Part 1,1 will briefly review the concurrent administrative law and contract law framework for government procurement litigation. In Part 2, I will review recent jurisprudence, with a focus on Rapiscan, to illustrate the problems caused by administrative law review of government procurement, and then trace these problems to confusion in the jurisprudence of the Supreme Court of Canada. In Part 3, I will argue that a primarily private law approach to government procurement litigation is preferable.

I OVERVIEW OF GOVERNMENT TENDERING LITIGATION

As mentioned above, government procurement decisions are frequently the subject of complicated, high stakes litigation. There are multiple legal avenues through which such decisions can be litigated. This paper, however, will focus on the relationship between two primary avenues: contract law and administrative law. (4) It is helpful to briefly review the basic structure of these two types of actions in order to then delineate where they overlap and conflict with one another.

I. THE CONTRACT LAW FRAMEWORK FOR TENDERING LITIGATION

Canadian courts have developed a special contract law framework for assessing tendering. Under a traditional contractual analysis, a call for bids would be a mere invitation to treat insufficient to create legal rights and obligations. In Ron Engineering, (5) however, the Supreme Court of Canada took a different view, holding that the submission of a bid in response to a tendering call could in some circumstances create a form of contract ("Contract A").

Since Ron Engineering, the Supreme Court has clarified the meaning and content of this "Contract A" (as distinct from "Contract B", the contract awarded to the ultimately successful bidder). …

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