This website uses cookies. By continuing to use this website you are agreeing to our use of cookies as described in our privacy policy.

Executive Summaries Oct 16, 2019

The Autorité des Marchés Publics: What You Need to Know Regarding Major Projects and Request for Proposals

Since January 25, 2019, the AMP has been entrusted with a series of functions which were previously performed by the Autorité des marchés financiers ("AMF"), relating to eligibility for public contracts and prior authorisation to obtain a public contract or subcontract.

It should be pointed out that the Autorité des marchés publics ("AMP") was established on the 1stof December 2017 through the An Act to facilitate oversight of public bodies’ contracts and to establish the Autorité des marchés publics. It is a neutral and independent body under provincial jurisdiction whose mission is to monitor public procurement and enforce legislation and regulations governing public contracts.

Before considering the innovative nature of the powers vested in the AMP, it is worth reviewing the prior authorisation required to obtain a public contract or a public subcontract, which has been mandatory for some major public projects since 2013.

Prior Authorisation Required to Obtain a Public Contract or Subcontract: The Continuation Of AMF's Activities

The transfer of powers pertaining to prior authorisation to obtain a contract or public subcontract from the AMF to the AMP has not changed the rules.

In order to obtain the prior authorisation required to obtain a public contract or subcontract, a business must demonstrate that it meets the high standards of integrity that the public is entitled to expect from a party to a public contract or subcontract. The AMP may, in order to determine whether a given company meets the integrity test, examine the integrity of the company itself, as well as that of its directors, officers, shareholders and other persons or bodies who have, directly or indirectly, legal or de facto control of the company. The AMP, upon receiving a request for authorisation, forwards the information obtained from the company requesting the authorisation to the Commissioner associated to the Unité permanente anticorruption, so that the former can carry out the verifications deemed necessary.

Prior authorisation to obtain a public contract or a public subcontract is required for businesses engaged in a call for tenders or award process for contracts with, among others, ministries, Crown Corporations and municipalities in Quebec, and involving an expenditure equal to or greater than the thresholds determined by the government.

In general, the thresholds are set at

  • $5 million for any construction work contracts or public-private partnership contracts or subcontract;
  • $1 million for any service contracts or subcontracts entered into pursuant to a call for tenders or awarded by mutual agreement.

In Montreal, the expenditure threshold that makes obtaining certain contracts subject to prior authorisation by the AMP is much lower. Hence, the threshold is set at $100,000 for any of the following contracts:

  • contracts for construction, reconstruction, demolition, repair or renovation of roads, waterworks or sewers;
  • contracts for the procurement of bituminous compounds;
  • service contracts for the construction, reconstruction, demolition, repair or renovation of roads, waterworks or sewers.

In addition, the threshold for Montreal is set at $25,000 for subcontracts directly or indirectly related to the contracts covered by the $100,000 threshold mentioned above.

In addition, it should be noted that the above-mentioned rules are of general application and that other types of contracts may be subject to the requirement to obtain prior authorisation from the AMP.

Prior Authorisation of the AMP: The Development of a Certificate of Integrity

The authorisation process to obtain a public contract or subcontract has been deployed to protect the interests of public at stake in the award and management of certain public contracts. However, recently it has been noted that private sector stakeholders, such as financial institutions and private owners, have begun requiring their customers, contractors or service providers, as the case may be, to obtain authorisation from the AMP or to show that they pass an "integrity" test similar to the one administered by the AMP for prior authorisation.

AMP authorisation has therefore become a filtering tool over the years allowing not only the public sector but also the private sector to exclude certain contracting parties whose integrity could be called into question.

More than ever, the prior authorisation of the AMP must therefore be considered as a valuable asset for any business.

Powers of the AMP Pertaining to a Public Request for Proposals or the Performance of a Public Contract

The AMP's functions, in addition to authorisations to contract with a public body, include reviewing the processes for awarding or allocating public contracts, reviewing the performance of a public contract and reviewing the contractual management of a public body that is specifically designated by the AMP or the government.

With regard to the award, allocation and performance of public contracts, the AMP has audit and investigative powers by which it can validate compliance with the eligibility requirements of bidders, the uniformity regarding the processing of bids, the equal treatment of participants in public tenders, the principles of fair competition, and even the commercial efficiency of a competitive bidding process. In other words, this scope of what can thus be validated by the AMP constitutes the "applicable normative framework". The AMP may also investigate the commission of certain criminal offences related to the exercise of its powers (obstruction of an audit, provision of false information, etc.).

In the course of an audit or investigation, the AMP may require the public body responsible for a call for tenders or the performance of a contract to provide any information or document it considers relevant. It may also enter any establishment of the public body and consult any document, use any computer equipment and question public servants, who also have an obligation to cooperate.

Following an audit or investigation, the AMP may order the public body to:

  • amend its request for tender documents;
  • cancel a request for tender;
  • refrain from invoking an exception that would allow it to enter into an over-the-counter contract (without a request for tender);
  • use the services of an independent auditor;
  • forward for approval the composition of a selection committee;
  • require an independent third party be added to a selection committee; or
  • suspend or terminate a public contract (for a designated organisation only).

It should be noted, however, that when the public body concerned is a municipal body, the AMP can only issue a recommendation. Given the political consequences associated with a publicised failure to follow an AMP recommendation, the weight of such a recommendation and the opportunity to seek its issuance from the AMP should not be underestimated.

How to Request the AMP's Intervention in the Context of a Public Request for Proposals

A person who considers themselves aggrieved by a public call for tenders, bidders in the process of a call for tenders or any other interested persons may request that the AMP intervene with a public body and exercise the above-mentioned powers. Two procedures are available to achieve this: complaint and provision of information.

  • 1. Complaint: During the public contract award or allocation process, any interested person may issue a complaint. The complaint must first be forwarded to the public body and it will then be referred to the AMP if the public body makes an unfavourable decision regarding the complaint or does not follow up on it. It should be noted that tight deadlines apply and that the AMP will reject complaints from a complainant who is pursuing a parallel judicial remedy.
  • 2. Disclosure of information: At any time, any interested person may also provide information to the AMP concerning any deviation from the above-mentioned "applicable normative framework". This is a broader and less formal mechanism than the complaint process. To this end, the AMP does not have the same response and follow-up obligations as those in the context of a complaint. However, as discussed more fully below, information disclosures can lead to tangible and effective results. It should be noted that measures to protect whistle-blowers are planned in order to facilitate the use of this procedure.

To date, the AMP has already issued three tender cancellation orders and a recommendation to adopt a needs assessment procedure following a complaint, in one case, and three information disclosures in the other cases. It is clear from these decisions that the AMP requires serious and tangible demonstration on the part of public bodies who adopt tendering criteria that could result in limiting the number of bidders. Failing this, it will exercise its powers. Filing a complaint and providing information may, therefore, be strategic alternatives to instituting legal proceedings by a bidder during a call for tenders or by any other person wishing to denounce a situation concerning a public contract.

Stay on the lookout!

Subscribe to our communications and benefit from our market knowledge to identify new business opportunities, learn about innovative best practices and receive the latest developments. Discover our exclusive thought leadership and events.