Canada: Proposal For The Codification Of The Rules Governing Public Contracts In Quebec

This article first appeared in French on the blog "Perspective" of the Quebec association of consulting engineering firms (AFG).

In Quebec there are two evolving and parallel legal regimes for the awarding of public contracts. One pertains to government-sector "public bodies" within the meaning of the Act respecting contracting by public bodies, and the other to municipal bodies. In March 2010 an advisory group on the awarding of municipal contracts rejected a proposal to consolidate all the applicable rules in one piece of legislation1

Since 2010 however there has been a proliferation of legislative and regulatory amendments to these two legal regimes. The rules of one regime are being progressively incorporated into the other, and vice versa. Some differences remain between the two regimes however, as their drafters have over time adopted different visions of what the contracting rules should be. That being the case, in our view the harmonization of the rules in a single code for Quebec public contracts appears to be advisable. 

Signs of a tendency towards harmonization

One recent legislative amendment illustrates the tendency of the legislature to make the rules uniform in certain regards2. Since June 10, 2016, in connection with a public call for tenders, a municipal body must respect a minimum seven-day period between the publication of an addendum that could affect prices and the deadline for receipt of tenders. This rule had applied for several years to public bodies; the legislature saw fit to import it into the municipal sector as well. 

Another example is the importation into municipal legislation of a performance evaluation mechanism that was already in use in the governmental sector. This mechanism gives the contracting authority the discretion to reject a bid on the grounds that the bidder received an unsatisfactory performance evaluation during the past two years. However, for reasons that remain obscure, the regulations applicable to public bodies contain two other grounds for rejecting a bid: not having followed through on a bid or a contract or having had a contract terminated for failure to respect its terms. This partial importation of a rule from the public bodies sector to the municipal sector entails a needless difficulty of interpretation, since municipalities should obviously have the same grounds available to them for rejecting a bid.

Harmonization of the rules: the approach recommended by the Charbonneau Commission

The Charbonneau Commission's recommendations 2 and 20 call for the harmonization of the rules applicable to public contracts in Quebec. 

Recommendation 2 calls for the harmonization of rules and regulations so that contracting authorities can give appropriate weight to each of the criteria of price and quality when awarding a construction contract. 

In recommendation 20, the Commission rightly points out that the critical issues of the confidentiality of the names of committee members and of the identity of recipients of the tender documents should not be treated differently under the two legal regimes referenced above.  

Two separate approaches despite common focuses

The legal framework for public bodies is found primarily in four voluminous bodies of regulations (procurement, construction, services, and information technology) in which the processes are broken down and explained in detail. 

The Treasury Board Secretariat advocates a strict interpretation of the regulations, leaving little room for innovation and intelligent procurement. By way of illustration, the Secretariat takes the view that the two-step tendering process for construction work (evaluation of quality and lowest price among the qualified bidders) cannot be used where the scope or complexity of a project requires contractors with specific expertise.

This restrictive approach first of all is at odds with recommendation 2 of the Charbonneau Commission, which prioritizes qualitative assessments in the area of construction.

Second, this approach of the Secretariat is distinct from that under the municipal regime, particularly since the adoption on June 16, 2017 of Bill 1223, wherein the legislature changed contract-awarding mechanisms in order to better equip municipalities to more adequately meet their needs and preserved their freedom to choose the means to do so. In addition, the mechanisms for the qualitative assessment of bids were made more flexible, and the discussion process with bidders can now be undertaken for contracts of any kind, regardless of the complexity of the specifications. 

Conclusions

Ultimately, the specificities of each sector, where they exist, could be accommodated by specific rules set out in a single code for all public contracts. In our view, the awarding of a contract involving the expenditure of public funds should be subject to the same principles enshrined in a single legal and regulatory framework that promotes innovation and intelligent procurement. 

The fact that municipal officials are part of the equation is not in our view an obstacle to harmonization of the rules. For the Act respecting contracting by public bodies already provides that a council of commissioners, which is composed of elected officials, acts as the managing entity of any public body subject to that statute. 

A Quebec code for public contracts is all the more urgent given the recent adoption of Bill 1084 and the establishment of the Autorité des marchés publics, the regulator responsible for overseeing public markets involving public bodies and municipalities. The harmonization of the rules governing public contracts would definitely facilitate the accomplishment of the mission of this new entity and serve the public interest.

Footnotes

1 Québec, Ministère des Affaires municipales, du Sport et du Loisir, Rapport du Groupe-conseil sur l'octroi des contrats municipaux : Marchés publics dans le milieu municipal, March 2010, p. 23. According to the report's authors, the budgetary autonomy of municipalities, manifested by their taxation power in particular, distinguishes them from the public bodies covered by the Act respecting contracting by public bodies.

2 Act to amend various municipal-related legislative provisions concerning such matters as political financing (Bill 83)

3 An Act mainly to recognize that municipalities are local governments and to increase their autonomy and powers (Bill 22) 

4 An act to facilitate oversight of public bodies' contracts and to establish the Autorité des marchés publics (Bill 108).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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