An Israeli defense contractor is suing the Canadian government, claiming it was dropped from a competition for a multimillion-dollar military equipment contract without explanation.
In a filing with the Federal Court last month, Elbit Security Systems said Public Services and Procurement Canada had refused to explain the company’s “alleged ineligibility” for a contract to supply handheld laser rangefinders to the Canadian Armed Forces.
Elbit says the government’s withholding of reasons until the contract is signed is denying the company a “full and fair opportunity to compete.”
The company says the federal government has “wrongfully concealed” information about why it disqualified Elbit’s bid, preventing it from “meaningfully participating” in the procurement process.
Elbit has been the target of protesters in Canada, including at last year’s Scotiabank Giller Prize ceremony, where protesters jumped onstage in November holding signs that read “Scotiabank Funds Genocide” to protest the bank’s investment in Elbit.
The company’s Toronto-based legal team at Fasken Law Firm declined to comment on the application, which was filed in Ottawa on June 20.
In a statement, Public Services and Procurement Canada said the federal government is “committed to an open, fair and transparent procurement process.”
The contract, which Elbit claims is potentially worth tens of millions of dollars, was supposed to have been awarded late last month, but a statement from Public Services and Procurement Canada said the procurement process was “continuing and the contract is expected to be awarded later this summer.”
The company said it would not comment on Elbit’s case because it was before the courts.
In its application for judicial review, Elbit said the disqualification was “procedurally unfair, incorrect and unreasonable”.
“It also undermines Canada’s trade agreement obligations to ensure procurement integrity and fair and open access to government procurement opportunities through a transparent and efficient framework,” Elbit’s filing said.
The company claims that by dropping out of the race, Elbit “suffered a significant competitive disadvantage and economic loss.”
The company has been a long-time supplier to the Department of Defense, previously winning millions of dollars’ worth of contracts for night vision equipment.
The contract in question was first floated in January, but the company says it was told in May that its bid did not meet the “essential industrial and technological benefits” required by Innovation, Science and Economic Development Canada policy.
According to Canada’s Innovation, Science and Economic Development website, the policy “contractually requires companies awarded defense procurement contracts to conduct business activities in Canada equivalent to the value of the contract they receive.”
The Canadian government’s refusal to further explain why the company was disqualified “remains a serious concern that the Canadian government may have applied undisclosed evaluation criteria, which are at odds with fundamental principles of fairness, transparency and equality in public procurement,” the report said.
The failure to disclose the reasons represents a “serious violation of Canadian procurement law,” the report said.
The company is asking the federal court to set aside the disqualification decision and put the contract award on hold pending the outcome of the trial. It also wants the government to disclose why it disqualified Elbit.
“The applicant has the right to expect that Canada will follow its procedures and apply its laws, regardless of the supplier’s country of origin,” Elbit’s application states.
— Darryl Greer in Vancouver
This report by The Canadian Press was first published July 10, 2024.
