On Jan. 25, 2019, certain provisions governing the Autorité des marchés publics came 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 AutoritĂ© des marchĂ©s publics (Bill 108), which was adopted on Dec. 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 CEO, Denis Gallant, took office on July 15, 2018, it was only on Jan.25, 2019, that some of the AMP’s functions and powers regarding intervention, oversight and investigation came into effect. On this date, the AMP also replaced the AutoritĂ© des marchĂ©s financiers, 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 Jan. 25, 2019
Functions and powers of the AMP that came into effect on Jan. 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 of:
- 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 Treasury Board president; and
- 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 Act respecting contracting by public bodies, it takes the form of a recommendation where the audit or investigation concerns a municipal body; and
- Designate an independent person to act on a particular selection committee.
The AMP may also make recommendations to the Treasury Board, 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 AutoritĂ© des marchĂ©s financiers’ public procurement functions relating to the authorization system prior to entering into public contracts and subcontracts and maintaining the register of enterprises authorized to enter into a public contract or subcontract. The AMP will also maintain the register of enterprises ineligible for public contracts and subcontracts, which up to now had been kept by the Treasury Board.
In order to ensure a smooth transition between the Autorité des marchés financiers and the AMP, Bill 108 provides for the transfer of activities between the two organizations. Therefore, the application (or renewal) process for 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, 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 CEO 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 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.
Clémentine Sallée is a partner and Alexis Beaudin-Fol and Alexia Magneron are associates with Blake, Cassels & Graydon LLP in Montréal