Canada: Important Proposed Modification to Québec Public Procurement Rules

On June 8, 2016, the Honourable Carlos J. Leitão, the Minister responsible for Government Administration and Ongoing Program Review and Chair of the Conseil du Trésor, introduced Bill 108: An Act to Facilitate Oversight of Public Bodies' Contracts and to Establish the Autorité des Marchés Publics ("Bill 108" or the "Act").

Bill 108 establishes the Autorité des marchés publics (the "AMP") and introduces various significant changes to the Act Respecting Contracting by Public Bodies as well as several other related statutes.

Main Features

Below is a summary of the key provisions of Bill 108:

Creation of the Autorité des Marchés Publics

  • A new regulatory authority, the AMP, will take over the powers currently exercised by the Public Contracts division of the Autorité des marchés financiers ("AMF");
  • The AMP's principal mission will be to "oversee all public contracts", including tendering and awarding processes for those contracts, to apply the provisions of the Act Respecting Contracting by Public Bodies related to the eligibility of businesses for public contracts and their performance review, and to establish the operating rules of the electronic tendering system;
  • The AMP will be responsible for the administration of the register of enterprises ineligible for public contracts (commonly known as the "RENA") and the register of enterprises authorized to enter into a public contract or subcontract;
  • The AMP will acquire substantial auditing powers with regard to the tendering or awarding process of public contracts. The AMP will have similar powers to investigate the contract management of the Ministère des Transports and any other public body designated by the Government;
  • In the course of an audit, representatives of the AMP will be authorized to enter the premises of a public body or any other premises in which relevant documents or information may be kept. They will also be authorized to use any computer, equipment or other thing found on the premises to audit, examine, process, copy or print out the relevant data;
  • When an audit or investigation is concluded, the AMP may make various orders relating to a public body, including to amend its tender documents and/or the membership of a selection committee. Additionally, the AMP may, at the end of an investigation, suspend or cancel a public contract if the AMP is of the opinion that the seriousness of the breach, as it relates to contract management, justifies suspending or cancelling the contract. Every order issued by the AMP must be made public on its website;
  • The AMP will have broad authority to make recommendations to the Chair of the Conseil du Trésor, in particular with regard to the tendering or awarding processes for public contracts;
  • The AMP will be responsible for receiving and processing complaints from any "interested person" relating to the tendering or awarding process of a public contract. The Act specifically provides that a complaint is not admissible unless it has been filed previously with the public body concerned. Furthermore, the admissibility of a complaint to the AMP will be subject to very short deadlines. The provisions relating to the reception and processing of complaints will gradually come into force, depending on the nature of the contract, between August 31, 2017 and August 31, 2018;
  • The AMP will be authorized to intervene on its own initiative to investigate any tendering or awarding process of a public contract that seems irregular;
  • The Act provides that any person, without risk of reprisal, can provide information to the AMP questioning the compliance of a public body's contract management. The AMP must keep the identity of any such person confidential but may nevertheless communicate the person's identity to the Anti-Corruption Commissioner ("UPAC");
  • The AMP's audit or investigation records will not constitute a declaration, recognition or extrajudicial admission of misconduct capable of establishing a party's civil liability. Modifications to the Act Respecting Contracting by Public Bodies
  • The identity of public bodies subject to the Act Respecting Contracting by Public Bodies isclarified, specifically those that require contractors and subcontractors to hold a contracting authorization from the AMP. The list of public bodies subject to the Act Respecting Contracting by Public Bodies is expanded to include the Commission de la construction du Québec, the Cree-Québec Forestry Board, the Office franco-québécois pour la jeunesse and the Office Québec/Wallonie-Bruxelles pour la jeunesse;
  • Every public body subject to the Act Respecting Contracting by Public Bodies must develop a procedure for receiving and examining complaints;
  • Every business, or its representative, interested in participating in a tender process for a public contract can make a complaint to the public body regarding its process if the conditions set out in the call for tenders do not ensure honest and fair treatment for tenderers. The deadline for receiving tenders may be extended to permit a public body to respond to any complaint;
  • The Act Respecting Contracting by Public Bodies provides that only businesses may be listed in the RENA. Currently, individuals can also by listed in this register;
  • Article 88 of the Integrity in Public Contracts Act, which provides that where the AMP refuses to grant or renew an authorization to contract with public bodies, the applicant is listed in the RENA for a period of 5 years, is incorporated in the Act Respecting Contracting by Public Bodies;
  • The Act Respecting Contracting by Public Bodies explicitly reintroduces as a discretionary ground for refusing the authorization to contract with public bodies the fact that one of its minority shareholders or one of its associates, or any other person or entity with direct or indirect legal control or de facto legal control of the enterprise, has been found guilty of a prescribed offence. In practice, the AMF already applies this discretionary ground;
  • The Conseil du Trésor may, in exceptional circumstances, authorize a public body to enter into a contract or to continue a public call for tenders that is prohibited by an order of the AMP. The Conseil du Trésor also has the right, in exceptional circumstances, to authorize a public body to conclude or to continue performing a public contract with an ineligible sub-contractor if it is in the public interest;
  • Where a business withdraws a request for authorization or a request to renew an authorization after the necessary information has been submitted (for instance, after the receipt of a notice of intent to refusal), it will not be allowed to submit a new request for authorization for one year, unless expressly authorized by the AMP;
  • The AMPwill make available to public bodies a summary of contractors and sub-contractors performance evaluations;
  • The Act imposes a fine of $5,000 to $30,000 for individuals and $15,000 to $100,000 in all other cases, for communicating, either directly or indirectly, with any member of a selection committee with the intention of influencing a call for tenders;
  • The limitation period for penal offences in the Act Respecting Contracting by Public Bodies will be 3 years from the date on which the commission of the offence becomes known to the AMP. However, no prosecution can occur if more than 7 years have passed since the date of the infraction.

Bill 108 significantly changes the process for awarding contracts to public bodies in Québec. The creation of the AMP, as well as the new infrastructure for supervising public markets, is a positive development that promises to bring about greater uniformity in contract management. Bill 108 demonstrates the Québec government's continuous efforts to protect the integrity of Québec's public markets while maintaining an emphasis on flexibility.

Given that the Bill is still at the introduction stage, it may still be subject to amendments before it is adopted and comes into force.

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