Canada: Coming Into Force Of Provisions Concerning Public Bodies' Obligation To Establish A Procedure For Receiving And Examining Complaints

In January, we published an article on the enactment of certain provisions of the Act to facilitate oversight of public bodies' contracts and to establish the Autorité des marchés publics (the "Act"). This follow-up article deals with a new series of provisions implementing some of the other recommendations that emanated from the Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry (the "Commission"), otherwise known as the Charbonneau Commission, and coming into force on May 25, 2019. Public bodies must now have a procedure for receiving and examining complaints made in the course of the contract tendering or awarding process.

Complaint Management System

The Act establishes a new complaint management system for public bodies, both for tendering processes and for privately agreed contracts.

Before May 25, 2019, any interested person who believed that the public tendering or awarding process did not meet the specified requirements, felt aggrieved or disadvantaged by the process, or identified an anomaly, had relatively limited recourse.

Prior to the contract being awarded, the person could:

  1. contact the contact person identified in the call for tenders document or the public body's contact person or use the complaint mechanism provided by the public body and, in the absence of follow-up, the person was required to contact the Secrétariat du Conseil du trésor in writing;
  2. give notice to the public body before the deadline for receipt of tenders in order to obtain the desired remedy, such as an amendment to the tender documents; or
  3. take legal action to obtain an injunction requiring the public body to amend the tender documents or prevent the award of the contract to an ineligible/non-compliant company.

Following the award of the contract, the person could initiate a claim for damages to be indemnified for loss of earnings due to anomalies in the tendering or award process.

As of May 25, 2019, a formalized complaint process will be made available to interested parties. This process is divided into two stages. The first requires a complaint to the public body; the second to the Autorité des marchés publics (the "Authority").

The Authority may, in response to any complaint received, investigate and make any orders or recommendations it deems necessary. With regard to complaints, the Authority has the same powers as when it dealt ex officio with an irregularity in the process.

Measures prior to the implementation of the complaint management system

To ensure the effective operation of this process, the Act requires public bodies to establish a procedure for responding fairly to complaints received in the context of tendering or awarding a public contract. To this end, any procedure adopted by a public body must be published on its website and must provide mechanisms for receiving and examining complaints.

As part of an award process, i.e. the award of a privately agreed contract, the public body must publish a notice of intent on the Quebec Government's Système électronique d'appel d'offres (the "SEAO") prior to executing such contracts in order to allow companies able to carry out the project to demonstrate their ability to meet the public body's requirements.

As part of a tendering process, i.e. the awarding of a contract by public tender, the public body carrying out this public tender must issue a notice to that effect to the SEAO. The notice is an integral part of the tender documents and formalizes the complaint procedure by requiring the organization to include the deadline for receiving any related complaints.

Complaints for public tenders (tendering process)

Only a company or group of companies interested in participating in the tendering process (or its representative) may make a complaint regarding an ongoing public tender.

The deadline for the receipt of complaints is determined by adding a period corresponding to half the time limit for receipt of tenders to the date of the notice of invitation to tender, but must not be less than 10 days. For example, if the date of the tender notice is November 15 and the deadline for receipt of tenders is December 15, the deadline for receipt of complaints will be December 1st.

The complainant must first contact the public body directly if he or she considers that the public tender documents:

  1. provide conditions that do not ensure fair and equitable treatment of competitors
  2. do not allow competitors to participate despite being qualified to meet the stated procurement requirements; or
  3. do not otherwise comply with the applicable normative framework.

To be admissible, the complaint must be transmitted electronically to the official identified in the procedure published by the body or, failing that, to the head of the public body, using a form determined by the Authority.

The public body has up to three days before the deadline for receipt of tenders to provide a response to the complainant. If a complainant disagrees with the public body's decision, they will have three days to file his complaint with the Authority.

In the absence of a response from the public body within the time limit, the complainant will have a three-day window before the deadline for receipt of submissions to initiate a complaint with the Authority.

Exceptionally, the complainant may apply directly to the Authority in the event the public body amends the tender documents within the two-day period preceding the deadline for receipt of complaints.

Complaints for Privately Agreed Contracts (awarding process)

The public body must, at least 15 days before entering into a privately agreed contract, publish a notice of intent at the SEAO. This period allows any company to express its interest in carrying out this contract.

Interested companies have five days before the date of execution of the contract to transmit a notice of interest electronically. The public body must communicate its decision at least seven days before the planned date of conclusion of the contract, postponing the planned execution date if necessary and informing the company of its right to lodge a complaint and the time limits involved.

In case of disagreement with the decision, the company will have three days from the receipt of the decision to file a complaint with the Authority. In the absence of a response from the public body three days before the expected date of execution of the contract, the company will have until the day before the contract is executed to file a complaint with the Authority. In the absence of publication of a notice of intent in the SEAO required by the Act, the company may file a complaint directly with the Authority.

Powers and functions of the Authority following a complaint

The Authority will use its investigative functions if it considers it necessary to make a decision. It will hear the concerned parties in accordance with a procedure to be published on its website. It has 10 days from the receipt of the public body's comments to make its decision. If necessary, it may postpone the submission of tenders to a new deadline as part of a tendering process. The publication of the decision follows much of the same rules promulgated in January, as described in our initial article.

A public contract concluded as a result of a tendering or award process carried on by a public body either before the Authority has issued its decision on a complaint or in contravention of an order to amend the tender documents shall be automatically terminated as from the receipt by the body and its contractor of a notification to that effect from the Authority.

A contract concluded by private agreement by a public body without having been the subject of the publication of the notice of intent provided for by law shall be automatically terminated as from the receipt by the body and its contractor of a notification from the Authority to this effect. It should be noted that the powers of order and the provisions referring to automatic termination do not apply in the case of contracts concluded with municipal public bodies.

The Office of the Inspector General takes over the functions and powers of the Authority with respect to the City of Montréal and certain organizations directly covered by the Act, thus conferring a certain autonomy on the Québec metropolis.

Reports of Wrongdoing

As of May 25, 2019, reports of wrongdoing involving the compliance of a public body's contractual management with the regulatory framework will no longer be made to the Quebec Ombudsman Protector, but to the Authority. Any person will then be able to provide the Authority with information relating to a process of tendering or awarding a public contract or the performance of such a contract. However, the legal department of the Quebec Ombudsman remains available.

The provisions of this section do not take into account privacy laws or any other restrictions on communication such as the obligation of confidentiality or loyalty to one's employer or client. Only solicitor-client privilege and certain contemporary executive council documents are exempt from this requirement.

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