In its October 2024 determination in Oracle v. Shared Services Canada, the Canadian International Trade Tribunal struck down the government’s attempt to use a closed-roster arrangement for the award of multiple high-value contracts. The dispute dealt with a multi-staged-multiple-award procurement process for the provision of large-scale cloud-based data services whose ultimate value the Tribunal noted “will potentially amount to billions of dollars over a long span of time.”
After concluding the prequalification stage of its multi-phased process, the government announced its intention to rely on a permanent closed list of suppliers for subsequent invitational processes to award specific contracts. The complainant challenged the closed list scheme, arguing that it breached trade treaty open competition rules. The Tribunal agreed.
As the Tribunal summarized, the government announced its intention to establish a permanent multi-use list restricted to the five highest bidders that qualified through the prior prequalification process. The suppliers on that closed list would be “eligible to participate in subsequent phases of this procurement process, including the receipt of final solicitation documentation.” The government further announced that the resulting contracts “are intended to enable long term stability, and could potentially be used for 20 years or more.”
The Tribunal found that this closed arrangement breached applicable open competition rules under the trade treaties since the rules governing multi-use supplier roster lists require that government institutions publicly post notices that allow other suppliers to apply and prequalify for those lists. Those notices must be published at least annually and, if published electronically, as most notices are, must be permanently posted electronically so that they are “made continuously available” to the marketplace.
Notwithstanding its prior announcements to the contrary, the government maintained that it still intended to allow other suppliers to prequalify for the list. However, given the ambiguity regarding those intentions, the Tribunal ordered the government to expressly amend its prior notices and prequalification documents to “explicitly state that interested suppliers may apply for prequalification in the future under the same evaluation criteria” that were used to create the original roster list and that notice, if published electronically, should be made continuously available to notify other potential applicants.
The Tribunal also ordered the government to ament its prior announcement asserting that unsuccessful applicants in the first round of prequalification would not be allowed to re-apply in the future. As the Tribunal stated, that permanent restriction “would seem to depart from the principle of fairness and non-discrimination, as the ability of a potential supplier to meet the requirements for prequalification may increase over time, notably if that supplier establishes new data centres or expands the breadth of its commercial reach.” The Tribunal therefore ordered the government to revise its public notices to clarify that any supplier who failed to qualify in the original process “should be explicitly allowed to reapply in the future.” As this case illustrates, the trade treaty rules that govern the use of supplier rosters impose strict standards that prohibit the use of closed supplier lists as a means of restricting other suppliers from qualifying for invitational contract award competitions.
This ruling, which illustrates why public institutions should be adopted formal protocols to ensure that they administer their roster frameworks in an open and treaty-compliant manner, will be featured in the Leveraging Portfolio Management and Centralized Spending module of our new Fundamentals of Canadian Government Procurement certificate program course that runs in April and returns in October. Please see our current training schedule for more details.
