On June 8, 2016, the Government of Québec presented Bill 108: An Act to Facilitate Oversight of Public Bodies' Contracts and to Establish the Autorité des Marchés Publics (the "Bill"). The Bill proposes the creation of the Autorité des marchés publics (the "Authority") as the organization responsible for overseeing all public procurement for public bodies. Individuals or enterprises wishing to enter into public contracts should learn more about this Bill in order to comply with the significant amendments that will come into force upon the Bill being adopted and receiving Royal Assent.

Authority's mission and powers

The Bill provides that the Authority's mission is, among others, to examine the compliance of a tendering or awarding process for a public contract. To that end, any interested party that disagrees with the public body's decision in regard to this process may file a complaint with the Authority. Moreover, on its own initiative or at the request of the chair of the Conseil du trésor, the Authority may also examine a tendering or awarding process for a public contract. Public contracts entered into in violation of an order made by the Authority will be cancelled by operation of law.

On the basis of the Bill and as part of its functions, the Authority will receive various powers to conduct audits and investigations, to render orders and recommendations, and to enter into agreements with public bodies with a view to facilitating the application of the Bill once it has been adopted and sanctioned.

In the case of an investigation or audit, the Authority may require any relevant information from the persons involved, as well as the release of any book, register, account, contract, record or other relevant document, and can make copies. Any person who has custody, possession or control of relevant documents must remit them to the Authority and facilitate their examination by the Authority.

With regard to orders and recommendations, the Authority can also order a public body to amend its tender documents, to cancel the public call for tenders or to not follow up on its intention to enter into a public contract by mutual agreement. Furthermore, the Authority may suspend the performance of any public contract or cancel such a contract if it is of the opinion that the seriousness of the breaches, as they relate to contract management, justify suspending or cancelling it.

Significant amendments

The Bill brings about significant amendments to the Act Respecting Contracting by Public Bodies, which serves as the legal framework for public contracts currently applied. In compliance with the Bill, the Authority, by replacing the Authorité des marchés financiers (the "AMF"), will henceforth be responsible for issuing the authorizations required for an enterprise wishing to enter into an agreement with a public body. The Authority may even determine that an authorization is required regarding public contracts or subcontracts, even if they involve a lower expenditure amount. It may also require an enterprise party to a public contract or subcontract that is in the process of obtaining an authorization to enter into an agreement within the timeframe it determines.

In addition, the Authority will be responsible for the administration of the register of enterprises ineligible for public contracts, which is currently administered by the Conseil du Trésor. The register indicates each enterprise ineligible for public contracts, as well as: (i) the Authority's decision with regard to the refusal or the revocation of an authorization, (ii) the finding of guilt against an enterprise included in a final judgment, (iii) the shareholders holding 50 per cent of the voting rights of an ineligible enterprise.

The Bill also proposes that public bodies be required to publish a notice of intention allowing all enterprises to demonstrate their interest prior to entering certain contracts by mutual agreement. The contracts in question will be those providing for an expenditure equal to or above the public tender threshold. In the opinion of public bodies, such public calls for tenders for this type of contract would not be beneficial to the public.

Commentary

By creating the Authority and granting it various powers to manage contracts awarded to public bodies, the Bill reinforces the oversight of public contracts and increases the level of transparency in the tendering and awarding processes for public contracts. Furthermore, the Bill provides for a more structured complaint process for any person questioning the decision of a public body while protecting and maintaining the identity of the complainant. This measure supports enterprises wishing for a fair treatment of their tenders for public contracts.

However, in the wake of the transfer of governance from the AMF to the Authority, and with more stringent requirements, the Bill will nevertheless increase the compliance burden for enterprises wishing to enter into an agreement with public bodies. Indeed, the Authority can require an authorization to enter into an agreement even for contracts involving an expenditure lower than that determined by the government, or even if an enterprise is in the process of performing a public contract. Furthermore, during an audit, the Authority may require any relevant information from an enterprise, as well as the release of any book, register, account, contract, record or other document related to the public contract in question.

Finally, despite the fact that the Bill remains subject to parliamentary debate, it is important for any individual or enterprise wishing to enter into an agreement with a public body to be up to date on the latest developments. The full text of the bill is available on the Assemblée nationale's website.

Gowling WLG remains available to answer any question you may have regarding the Bill. We will be closely monitoring the developments in this area, and will provide further analysis once the Bill has been adopted and implemented.