The last-minute cancellation of the program raises questions about the future of the long-delayed military acquisition.
Companies had until 2 p.m. ET Wednesday to bid on a contract for 1,500 new medium-sized logistics trucks for the Canadian Forces.
But Public Works emailed bidders three minutes before the deadline to let them know the contract has been cancelled.
"Economic, marketplace and budgetary circumstances have changed since this solicitation process began," the notice said.
"Therefore, the government of Canada needs to reassess this procurement to ensure that the right equipment is acquired for the army at the best value for Canada, prior to proceeding with a new solicitation."
Former Defence Minister Gordon O'Connor first announced the program to great fanfare back in 2006.
"This government is committed to strengthening the Canadian Forces by ensuring that they finally have the equipment they need to get the job done," O'Connor said in a news release.
The release says the government planned to buy 1,500 logistics trucks and 800 commercial vehicles adapted for military use, along with equipment to go with them, at a total cost of $1.2 billion.
The new Standard Military Pattern Vehicles were to replace the current fleet of trucks, which has been in use since the 1980s. The vehicles are reaching the end of their service life.
"The requirement for this equipment is urgent," the Defence Department said back in 2006.
The medium-weight trucks are considered the workhorses of the regular and reserve forces, ferrying supplies to troops at home and abroad.
But after more than two decades of service, the trucks are rusted out and have brake problems.
In a statement released Wednesday night, Public Works Minister Rona Ambrose reiterated that the decision to reassess the trucks proposal was based on a desire to preserve taxpayer dollars.
"It is important to make sure that we will get the right equipment for our men and women in uniform at the right price for the Canadian taxpayer," she said.
Associate Defence Minister Bernard Valcourt added that the government was committed to providing the Forces with the best equipment available in an open, transparent way.
This is not the first time the government has parked a plan to replace the aging trucks.
Last November, Public Works told prospective suppliers it was restarting the process after six companies and eight types of trucks had already been pre-qualified, citing "further refinements in the technical specification."
"The refinements in the requirement were necessary to identify the interface control constraint between the vehicle and the payloads it must carry," the department said at the time.Suggest a correction