Certain provisions of the Act to facilitate oversight of public bodies' contracts and to establish the Autorité des marchés publics to take effect

24 January 2019

Background

In October 2011, following a series of revelations about the public contracting process in Quebec, the provincial government launched the Commission of Inquiry on the Awarding and Management of Public Contracts in the Construction Industry, otherwise known as the Charbonneau Commission (the "Commission"). On November 24, 2015, the Commission submitted its final report with some 60 recommendations, the first of which was to "Create a public procurement authority for Quebec".

Pursuant to this recommendation, the Autorité des marchés publics (the "Authority") is intended to be a national public procurement regulatory and oversight body with a mandate

(i) to monitor public contracts to identify instances of malfeasance:

(ii) to support public contracting authorities in managing contracts, and

(iii) to intervene with them when necessary.

The provincial government followed up on the Commission's recommendation on June 8, 2016, when it introduced Bill 108, the Act to facilitate oversight of public bodies’ contracts and to establish the Autorité des marchés publics (the "Act"). This bill was unanimously adopted by the National Assembly on December 1, 2017.



The Authority's Mission

The mission of the Authority is to monitor all contracts of public bodies, including municipal bodies, by examining the compliance of the processes for tendering and awarding these contracts in response to a complaint from an interested person, a request from a person provided for in the Act, or a report of wrongdoing by a whistleblower. It should be noted, however, that the powers of the Authority over municipal bodies are not the same as those over other public bodies, as the Authority has more of a power of recommendation over municipal bodies.

The Authority is also responsible for authorizing enterprises to contract with the State, by maintaining the register of enterprises authorized to enter into public contracts and subcontracts, as well as the register of enterprises not eligible for public contracts (the "RENA").

The Act gives the Authority a broad range of powers, including the right to conduct audits and investigations, pursuant to which it may — as it deems appropriate — issue orders, make recommendations, as well as suspend or terminate contracts.

Gradual Coming into Force of the AMP's Powers

Although the Act establishes the immediate creation of the Authority, it provides for a gradual coming into force of the provisions concerning its functions and powers, namely six months and ten months from the date the Authority’s first president and chief executive officer took office.

Denis Gallant assumed this role on July 25, 2018, following a 2/3 vote of the members of the National Assembly, marking the official start of the Authority’s activities. As such, certain provisions will be enacted on January 25 and on May 25, 2019. Others, concerning the evaluation of the enacted measures, will come into effect at a later date to be determined by the government.

January 25, 2019

As of January 25, 2019, the Authority will be granted significant powers of intervention, audit and investigation, the power to issue certain recommendations and orders with respect to public bodies, and will become responsible for the process by which enterprises may be authorized to enter into contracts with the State.

Intervention, Audit, and Investigation

The Authority will have an ex officio oversight role in public contracting and will thus be granted broad powers to audit and investigate the tendering or award processes, as well as the contractual management of public bodies. Contract management primarily relates to the specification of requirements, the tendering process, the performance of contracts and the reporting of results.

In carrying out its audit functions, it has the power to:

  1. enter the premises of the public body or any other place in which the public body may hold relevant documents or information;
  2. use any computer, material or equipment on the premises to access, verify, examine, process, copy or print data contained in an electronic device, computer system or other medium;
  3. require the persons present to provide any relevant information and to produce and copy any book, register, account, contract, file or other document relating thereto.

The Authority is also vested with the same powers as those granted under the Act respecting public inquiry commissions. This allows the Authority's investigators to resort to whatever lawful means they deem effective to carry out their investigations, including compelling the appearance of any person and the production of any documents deemed necessary, other than incarceration.

The Act provides that any person who has custody, possession or control of documents pertaining to an audit or investigation must collaborate with and facilitate the Authority's mission, or find themselves guilty of an offence and liable to a fine ranging from $4,000 to $20,000 (which is doubled in the case of a subsequent offence).

Orders and recommendations

Following an audit or investigation, the Authority will intervene ex officio when it is of the opinion that a public tender:

(i) provides conditions that do not ensure fair and equitable treatment of competitors;

(ii) does not allow competitors to participate despite being qualified to meet the stated procurement requirements; or

(iii) does not otherwise comply with the applicable normative framework.

The Authority may then order the public body to amend their public tender documents or cancel the tender altogether. It may also order the public body to retain an independent process auditor or appoint an independent person to act as a member of a selection committee for the tendering of a public contract. In the event of a serious breach of contract management, it may suspend the performance of a public contract or even cancel such a contract.

The Authority must substantiate in writing and communicate its decisions to the directors of the concerned public body and contractors. The decisions are public information and made available on the Authority’s website. However, the identity of a person designated by a decision to act as a member of a selection committee for the tendering of a public contract will not be disclosed.

While the Authority has the power to issue orders or recommendations to a public body, in the case of a municipal body, this power is limited to issuing recommendations. However, it may recommend to the Minister Responsible for Municipal Affairs that he or she intervene or give a directive deemed appropriate to the council of a municipal body subject to the Act.

The recommendations made by the Authority to the head of a public body concerning a process of tendering or awarding a contract may include the introduction of corrective measures, appropriate follow-up measures, and the implementation of any other measure such as ongoing monitoring or assistance.

Authorization to Enter into a Contract and RENA

Formerly the responsibility of the body known as the Autorité des marchés financiers ("AMF"), the Authority will henceforth be responsible for managing the authorizations for enterprises to enter into contracts with the State, including the maintenance of a register of enterprises authorized to enter into public contracts and subcontracts, and of the RENA.

The RENA contains records of the names of enterprises that have been found guilty of an offence under the Act Respecting Public Bodies Contracts, as well as those whose application for authorization to enter into public contracts or public subcontracts has been refused or not renewed. This record is usually maintained on the RENA for a period of five years and can be renewed.

Any enterprise wishing to enter into public contracts or subcontracts valued beyond a certain threshold prescribed by the government must obtain prior authorization from the Authority to do so. Such application requires the enterprise to complete administrative formalities established by the Authority, including the obligation to complete a registration form and the payment of various fees.

Following receipt of an enterprise’s complete request, the Authority consults with the Associate Commissioner for Audits at the Unité permanente anticorruption, who then conducts the necessary audits and communicates its recommendations to the Authority. 

May 25, 2019

As of May 25, 2019 —ten months after the first president and chief executive officer of the Authority took office — the Authority and public bodies will be actively engaged in a new complaint management system, the Authority's powers will be extended to privately agreed contracts, and the Authority will be responsible for handling and following up on reports of wrongdoings regarding a public contract.

For more information about how the new Act will impact your business activities, please contact any member of our team.


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