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Israeli arms firm taking Canada to court after contract disqualification

Elbit Security Systems says it is not getting 91Ƶa full and fair opportunity to compete91Ƶ
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A group protests outside Scotiabank in Kelowna in March against the bank91Ƶs connection to Elbit Systems an Israeli defence contractor. (Jordy Cunningham/Capital News)

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 91Ƶpurported disqualification91Ƶ from a contract for hand-held laser rangefinders for the Canadian Armed Forces.

Elbit says the government91Ƶs refusal to give its reasons until after the contract is awarded prevents the firm from having 91Ƶa full and fair opportunity to compete.91Ƶ

The company says it can91Ƶt 91Ƶmeaningfully participate91Ƶ in the procurement process because the federal government is 91Ƶimproperly withholding91Ƶ information about why it disqualified Elbit91Ƶs bid.

Elbit has been targeted by protesters in Canada, including at last year91Ƶs Scotiabank Giller Prize ceremony. Protesters with signs saying 91ƵScotiabank Funds Genocide,91Ƶ taking exception to the bank91Ƶs investments in Elbit, jumped on the stage at the ceremony in November.

The company91Ƶs 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 91Ƶuses open, fair and transparent procurement processes.91Ƶ

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 Canada91Ƶs statement said the procurement process 91Ƶcontinues and a contract is expected to be awarded later this summer.91Ƶ

It said it would not comment on Elbit91Ƶs case as the matter is before the court.

Elbit says in its judicial review application that the disqualification was 91Ƶprocedurally unfair, incorrect, and unreasonable.91Ƶ

91ƵIt also undermines the integrity of the procurement and the obligations enshrined in Canada91Ƶs trade agreements to ensure fair and open access to government procurement opportunities through a transparent and efficient framework,91Ƶ Elbit91Ƶs application says.

The company claims being dropped from the running put Elbit 91Ƶat a significant competitive disadvantage 91Ƶ and resulted in economic loss.91Ƶ

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 didn91Ƶt meet 91Ƶmandatory industrial and technological benefits91Ƶ as required by a policy of Innovation, Science and Economic Development Canada.

The policy 91Ƶcontractually requires companies awarded defence procurement contracts to undertake business activity in Canada equal to the value of the contracts they have won,91Ƶ Innovation, Science and Economic Development Canada91Ƶs website says.

Canada91Ƶs refusal to further explain why the company was disqualified has left it 91Ƶwith 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.91Ƶ

It said the failure to disclose the reasons represents a 91Ƶflagrant violation of the law by Canada in its conduct of the procurement. 91Ƶ

The company wants the Federal Court to quash the disqualification decision and to stay the contract award pending the court case91Ƶs outcome. It also wants an order for the government to disclose its reason for disqualifying Elbit.

91ƵThe applicant has a right to expect that Canada will follow its processes and apply the laws regardless of the origin of a supplier,91Ƶ Elbit91Ƶs application says.

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