Canada: Quebec Public Procurement Authority: Powers And Duties Take Effect

On January 25, 2019, certain provisions governing the Autorité des marchés publics (AMP) come into effect, a welcome and anticipated change for many public bodies and private enterprises.

The AMP is a neutral and independent public procurement supervisory and regulatory authority in Quebec and the first authority of its kind in Canada. It was created by An Act to facilitate oversight of public bodies' contracts and to establish the Autorité des marchés publics (Bill 108), which was adopted on December 1, 2017 and constituted one of the key recommendations of the Charbonneau Commission.

Bill 108 provides for a gradual coming into effect of the functions and powers of the AMP to ensure it is operational from the outset of its activities. While the AMP's first President and Chief Executive Officer, Denis Gallant, took office on July 15, 2018, it is only on January 25, 2019, that some of the AMP's functions and powers regarding intervention, oversight and investigation come into effect. On this date, the AMP also replaces the Autorité des marchés financiers (AMF), the Quebec securities commission, in its responsibilities regarding public contracts, including granting prior authorization to obtain certain public contracts and subcontracts.

FUNCTIONS AND POWERS EFFECTIVE JANUARY 25, 2019

Functions and powers coming into effect on January 25, 2019 include:

Compliance

One of the AMP's functions is to review compliance with applicable legislative and regulatory framework, including the Act respecting contracting by public bodies (ACPB) of:

  1. Tendering and awarding processes, as well as the performance of contracts by public bodies, on the initiative of the AMP or at the request of the President of the Conseil du trésor (Treasury Board); and
  2. The contract management of public bodies designated by the AMP or the Government of Quebec. The Ministry of Transport is the first public body to undergo review of its contract management by the AMP.

In performing these functions, the AMP has audit and investigation powers that allow it to require the disclosure of any relevant information and the production of documents. The AMP also has the power to enter the establishment of public bodies or any other premises where relevant information and documents may be kept.

Following an investigation or audit, the AMP may:

  • Issue orders to public bodies, which have to be substantiated. These include orders to use an independent process auditor for a given tendering process, orders to modify or cancel a public call for tenders, or even, for public bodies whose contract management is under review, to terminate or temporarily suspend the performance of a contract if the seriousness of the breaches justifies it. While any such order is binding on public bodies covered under the ACPB, it takes the form of a recommendation where the audit or investigation concerns a municipal body.
  • Designate an independent person to act on a particular selection committee.

The AMP may also make recommendations to the Conseil du trésor, the minister responsible for municipal affairs, or the chief executive officer of a public body whose contract management is under review, among others.

AMP Authorization and Integrity

The AMP is transferred AMF's public procurement functions relating to the authorization system prior to entering into public contracts and subcontracts (AMP Authorization) and maintaining the register of enterprises authorized to enter into a public contract or subcontract (REA). The AMP will also maintain the register of enterprises ineligible for public contracts and subcontracts (RENA), which up to now had been kept by the Conseil du Trésor.

In order to ensure a smooth transition between the AMF and the AMP, Bill 108 provides for the transfer of activities between the two organizations. Therefore, the application (or renewal) process for AMP Authorizations remains the same, with employees, systems and files for current applications being transferred over to the AMP and processed thereby on an ongoing basis. Enterprises that have submitted applications or holders of an AMP Authorization need not take any steps to ensure the transfer of their file to the AMP.

FUNCTIONS AND POWERS EFFECTIVE MAY 25, 2019

The most anticipated element of Bill 108 is the extrajudicial complaint mechanism in the event of irregularities with the awarding process of a contract or certification or qualification processes, first, before public bodies and, second, before the AMP. This mechanism comes into effect on May 25, 2019, as do the provisions relating to the disclosure of information or the disclosure of wrongdoings with respect to public contracts.

This four-month period will allow the AMP and its President and Chief Executive Officer to develop internal procedures and standardized complaint forms, as well as to recruit and train staff.

For their part, public bodies will have to ensure that, prior to May 25, 2019, an administrative process is in place to receive and analyze complaints relating to their public procurement processes, which is the first step in the new complaint system. They will also need to take into account in their tendering and awarding processes the delays that potential complaints may cause, and train their staff on this new system and the consequences of not complying with it.

Public bodies will also have to take into account a new rule: a public body entering into a contract by mutual agreement, which should have been the subject of a public call for tenders, based on the public interest exception, will be required to publish on the electronic tendering system (SEAO), at least 15 days before entering into that contract, a notice of intention allowing any enterprise to express interest in entering it. Failing to do so will result in the cancellation of the contract by operation of law.

Many are anxiously, but also optimistically, awaiting this new authority, and are looking forward to these changes.

For more information on the origins and powers of the AMP, please see our August 2018 Blakes Bulletin: Quebec Public Procurement – New Procurement Authority Ramps Up.

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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