Mitel's CEO says the City of Ottawa's actions regarding a multi-million-dollar telephone contract is "not something to be proud of."

CEO Don Smith made the comments to CTV Ottawa following the release of a city report that urges politicians to resume the contract process and proceed with a joint bid from Bell Canada and Cisco Systems.

The contract is worth up to $7 million to replace the city's dated telephone system with Voice over Internet Protocol (VoIP) technology.

Mitel offered the City of Ottawa $2 million worth of desktop phones with some conditions when its initial bid for the contract was rejected. After review by the city's fairness commissioner, the city refused the offer last month.

Smith says Mitel has been treated unfairly on several fronts. He and Terry Matthews, Mitel's chairman of the board, were scheduled to appear before a city committee to plead their case on Tuesday. However, the committee voted on Monday to defer the issue for another two weeks.

Mitel's lawyer says the company could take legal action. However, the lawyer for the city says the risk of being taken to court over the issue is low.

The city's technology advisor, who wrote a special report on the use of technology, says Mitel has a point about the possible ramifications for the city in terms of getting tied to a six-year agreement with Bell-Cisco.

Although Cisco says a long-term deal is advantageous, Rob Collins says it could hurt the city if it's "not managed well." He says it's up to the politicians to choose one path or the other.

In the past few weeks, Smith says Mitel has received support from other companies who also don't like how the situation unfolded.

Matthews has been working hard and taking a personal interest in the dispute, which he says demonstrates that the city's procurement process is flawed and negatively affects Ottawa taxpayers.

Matthews says he feels Ottawa should find a way to showcase local companies, but stresses he does not want special treatment for his company.

The issue is expected to be discussed at a city committee on June 30.

With a report from CTV Ottawa's Paul Brent