Risk Aversion, Bad faith and Scams by Ian Burdon

Posted on November 13, 2013


I have written here previously about problems of risk aversion in a process driven public procurement culture which I think is a real problem. With that in mind, Jon expressed his concern about the decision in Envoy Relocation Services Inc. v. Canada (Attorney General), 2013 ONSC 2034 commenting that:

“In fact if anything, I am more adamant relative to my earlier stated belief, based on the fact that rather than serving justice, the […] ruling will actually further entrench the belt with suspenders risk averse mindset that has both dominated and limited public sector procurement effectiveness”.

I disagree with respect to this case. I think that on any reading the decision of Justice Peter Annis discloses what NATO forces would recognise immediately as a Charlie Foxtrot scenario.

The judgement, which runs to 1808 paragraphs, goes so far at one point as to describe the tendering provisions put in place by the Crown as “a scam” (para. 1312). There are further findings relating to a terminated tender process in 2002 of the same tenor. Annis J, who is now a Justice with the Federal Court of Canada, was also clearly aggrieved (para 13) that the Crown had “had misled the [Office of the Auditor General] and the court”.

On the basis of his findings in fact it is clear that Annis J was not only entitled to overturn the contract award decision but it would have been much more surprising had he not overturned it.

The findings in fact make grim reading for any procurement professional. Taking them at face value (they may yet be appealed I understand) they are that the incumbent’s bid should have been rejected as non-compliant; that both the incumbent and the Crown had significant conflicts of interest; that weightings in the evaluation criteria were biased towards the incumbent and, worse (para 1194) “constitute bad faith”; that the Crown failed to follow its own procedures and that the Crown ignored the incumbent’s intention to breach its obligations.  Annis J expresses his concerns quite clearly in paras. 1749 and 1750:

  • the disregard for the transferees’ interests in permitting them to be charged […];
  • the riding roughshod over legitimate concerns of the tendering parties and refusing to provide responses and correct or helpful answers to their questions;
  • the attitude conveyed to the Court that there were sufficient checks and balances in the system to prevent improprieties, or that the Deputy Minister erred in deciding to retender the process;
  • the willingness of Crown witnesses, to come to court concealing documents, not to mention being untruthful on critical elements of the case
  • the blatant denial and concealment of conflicts of interest;
  • the intentional failure to document decisions that injured the plaintiffs;
  • misleading the Office of the Auditor General; and
  • the too close relationship with RLRS and the failure to recognize the Crown’s favouritism towards RLRS and its impact on the relocation industry in Canada.

[1750] I am satisfied that this conduct can be characterized as high-handed, arbitrary or highly reprehensible misconduct, and although without malice, departing to a marked degree from ordinary standards of decent behaviour in respect of procurement practices.

Addressing these issues is not a matter of entrenching risk aversion, it is to fix deep seated irregularities in the conduct of the procurement itself.

Click image above to read original Atyeo post . . .

Click image above to read original Atyeo post . . .