Ottawa owes N.S. marine crane maker damages for botched navy tender

Hawboldt Industries, a Chester, N.S.-based marine equipment manufacturer, will be compensated because of a botched tender to supply up to 30 marine cranes for Royal Canadian Navy frigates.

Bid by Hawboldt Industries disclosed to competitors before tender cancelled

Hawboldt Industries in Chester, N.S., is a subsidiary of Ontario-based heavy equipment company Timberland Group. (Rob Short/CBC)

A Nova Scotia marine equipment manufacturer will be compensated because of a botched tender to supply up to 30 marine cranes for Royal Canadian Navy frigates.

Hawboldt Industries of Chester, N.S., complained that its low bid was disclosed to competitors before the contract was cancelled last fall — hurting its chances when the contract is retendered.

The Canadian International Trade Tribunal (CITT) upheld the complaint in a decision released on the weekend.

"The degree of prejudice to Hawboldt is significant," tribunal member Jean Bedard wrote.

"Hawboldt's competitors now know the exact price it bid. They also know that it has the lowest compliant bid price. Hawboldt, however, has no notion of its competitors' price."

Bedard ruled the company is entitled to compensatory damages by a factor of its original bid. The amount is being kept confidential.

Hawboldt was one of four companies bidding to provide 16 electro-hydraulic marine cranes for Halifax-class frigates. (Rob Short/CBC)

In August 2017, Hawboldt was one of four companies bidding to provide 16 electro-hydraulic marine cranes for Halifax-class frigates with an option to supply 14 more. The value of the contract has not been released. 

Hawboldt is a subsidiary of Ontario-based heavy equipment company Timberland Group.

The Hawboldt bid was disclosed by Public Works and Government Services Canada in so-called "regret letters" to the losing bidders last September.

Two competitors objected to the evaluation of mandatory criteria in the bidding process. In October, Public Works decided to cancel and retender for the marine cranes because the original request was flawed.

Bedard wrote in the decision that the list of contract-deliverable requirements was so detailed that no bidder could demonstrate compliance, the evaluation used was confused and the bidding was compromised beyond repair by the acceptance of substantial additional material from each bid.

Long-standing problem 

Bedard said it is not the first time this has happened.

"The Tribunal has previously issued warnings in regard to behaviours similar, if not identical, to the one scrutinized here and believes that the disclosure of confidential pricing information before definitive contract award constitutes an indisputable deficiency in the procurement process."

Bedard chided Public Works for its "systematic practice" of releasing bidding information without regard to consequences.

"It undermines the competitiveness of retenders and severely curtails the scope of practical remedies available to the Tribunal."

No one available to comment

Bedard said there was no evidence of bad faith by Public Works.

Awarding Hawboldt lost profits was ruled out because it would amount to "double compensation" in case it resubmits and wins in the retender.

In addition to the ruling for undisclosed compensation, Bedard said Hawboldt is entitled to bid-preparation costs and another $2,750 in complaint-preparation costs.

Public Works did not respond to request for comment.

In a statement, the Department of National Defence said it is aware of the tribunal decision. A spokesperson said the ruling will have "no impact on operability or deployment" because the Royal Canadian Navy continues to use its current cranes.

Hawboldt said it's still studying the CITT decision with its lawyers to understand where the case goes from here.

"We are not making any official comment on the decision except to say we are pleased that the CITT has found in our favour," general manager John Huxtable said in a statement.

If it opposes the ruling, the federal government is able to appeal it to the Federal Court, or it can try to negotiate a lower settlement with Hawboldt. 

About the Author

Paul Withers

Reporter

Paul Withers is an award-winning journalist whose career started in the 1970s as a cartoonist. He has been covering Nova Scotia politics for more than 20 years.