An Israeli defence contractor is taking the Canadian government to court after the company says it was taken out of the running for a multimillion-dollar military equipment contract without explanation.
Elbit Security Systems Ltd. says in an application filed in Federal Court last month that Public Services and Procurement Canada has refused to explain its 鈥減urported disqualification鈥� from a contract for hand-held laser rangefinders for the Canadian Armed Forces.
Elbit says the government鈥檚 refusal to give its reasons until after the contract is awarded prevents the firm from having 鈥渁 full and fair opportunity to compete.鈥�
The company says it can鈥檛 鈥渕eaningfully participate鈥� in the procurement process because the federal government is 鈥渋mproperly withholding鈥� information about why it disqualified Elbit鈥檚 bid.
Elbit has been targeted by protesters in Canada, including at last year鈥檚 Scotiabank Giller Prize ceremony. Protesters with signs saying 鈥淪cotiabank Funds Genocide,鈥� taking exception to the bank鈥檚 investments in Elbit, jumped on the stage at the ceremony in November.
The company鈥檚 Toronto-based legal team at the firm Fasken declined to comment on the application filed June 20 in Ottawa.
In a statement, Public Services and Procurement Canada said the federal government 鈥渦ses open, fair and transparent procurement processes.鈥�
Elbit claims the contract is potentially worth tens of millions of dollars and was supposed to have been awarded late last month, but Public Services and Procurement Canada鈥檚 statement said the procurement process 鈥渃ontinues and a contract is expected to be awarded later this summer.鈥�
It said it would not comment on Elbit鈥檚 case as the matter is before the court.
Elbit says in its judicial review application that the disqualification was 鈥減rocedurally unfair, incorrect, and unreasonable.鈥�
鈥淚t also undermines the integrity of the procurement and the obligations enshrined in Canada鈥檚 trade agreements to ensure fair and open access to government procurement opportunities through a transparent and efficient framework,鈥� Elbit鈥檚 application says.
The company claims being dropped from the running put Elbit 鈥渁t a significant competitive disadvantage 鈥� and resulted in economic loss.鈥�
The company has been a long-standing supplier to the Department of National Defence, with past contracts for night-vision equipment worth millions.
The contract in question first came up in January, but the company says it was told in May that its bid didn鈥檛 meet 鈥渕andatory industrial and technological benefits鈥� as required by a policy of Innovation, Science and Economic Development Canada.
The policy 鈥渃ontractually requires companies awarded defence procurement contracts to undertake business activity in Canada equal to the value of the contracts they have won,鈥� Innovation, Science and Economic Development Canada鈥檚 website says.
Canada鈥檚 refusal to further explain why the company was disqualified has left it 鈥渨ith the grave concern that Canada may have applied undisclosed evaluation criteria, which is contrary to principles of fundamental justice, transparency, and equality in public procurement.鈥�
It said the failure to disclose the reasons represents a 鈥渇lagrant violation of the law by Canada in its conduct of the procurement. 鈥�
The company wants the Federal Court to quash the disqualification decision and to stay the contract award pending the court case鈥檚 outcome. It also wants an order for the government to disclose its reason for disqualifying Elbit.
鈥淭he applicant has a right to expect that Canada will follow its processes and apply the laws regardless of the origin of a supplier,鈥� Elbit鈥檚 application says.
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