Public contracts: the complaint procedure is now accessible to businesses interested in public and municipal contracts awarded by public tender

On May 25, 2019, the latest provisions of the Act respecting the Autorité des marchés publics (the Act) came into force. The Autorité des marchés publics (the AMP) is now able to fully assume its oversight and public procurement regulatory role for Quebec, in particular through the complaint procedure.

New Remedy Available to Tenderers: the Complaint Procedure

Since May 25, 2019, tenderers have a new way of identifying, on a timely basis and at little cost, irregularities observed in the public tendering process.

This new complaint procedure implemented by the Act is comprised of two steps, namely 1) a complaint filed with the public body and 2), if necessary, a complaint filed with the AMP.

1st Step: Complaint Directed at the Public Body

The new complaint procedure allows any interested person (or a group of companies) to first file a complaint directly with the public body if it believes that the tender documents:

• provide conditions that do not ensure honest and fair treatment of the tenderers;
• do not allow tenderers to compete even though they are qualified to meet the stated requirements; or
• are not compliant with the applicable normative framework.

This complaint must be received by the public body no later than the deadline set for the receipt of complaints as specified in the tender documents. This complaint filing deadline must correspond to half the time for receiving tenders, but may not be less than 10 days. For example, if the call for tenders is published on June 1, 2019 and the deadline for receiving tenders is June 30, 2019, the deadline for receiving complaints must then be established as at June 15.

The public body must send the tenderer its decision including reasons in writing no later than three days prior to the deadline for receiving tenders.

A complaint must be filed with a public body using the electronic form available at the following address: https://amp.gouv.qc.ca/en/file-complaint/complaint-public-body/.

2nd Step: Complaint with the AMP

If the tenderer disagrees with the public body’s decision, or if the decision is not sent within the specified time limit, the complainant may then file a complaint with the AMP. The complaint must be filed with the AMP no later than three days after the tenderer receives the public body’s decision or, if applicable, no later than three days before the tender closing date if the public body has not made its decision.

A complaint must be filed with the AMP using the electronic form available at the following address: https://amp.gouv.qc.ca/en/file-complaint/complaint-amp/.

Oversight of the Awarding of Contracts by Mutual Agreement

The complaint procedure also applies to certain contracts awarded by mutual agreement. These are more specifically the contracts involving an expenditure equal to or above the public tender threshold that a public body may enter into by mutual agreement where it considers that it will be able to prove that a public call for tenders would not serve the public interest.

The public body must publish a notice of intention in the SEAO (the electronic tendering system) within 15 days before the contemplated date for entering into the contract, which will allow any enterprise to express its interest in carrying out the contract. This notice must specify, among other things:

• the name of the contracting party with which the public body intends to enter into the contract;
• a detailed description of the public body’s requirements and the contract obligations; and
• the reasons the public body invokes for entering into a contract by mutual agreement.

The public body must send to the enterprise having expressed its interest its decision to maintain or not its intention to enter into a contract by mutual agreement. If the enterprise disagrees with the public body’s decision, or if the decision is not sent within the specified time limit, it may file a complaint with the AMP.

The AMP may, at the conclusion of its review, order the public body not to follow up on its intention to enter into the contract by mutual agreement, which would then require it to resort to a public call for tenders in order to enter into the contract.

Possible Sanctions Following an Audit by the AMP

Following the audit of a complaint regarding the tendering or awarding process for a public contract that is in process, the AMP may order the public body to amend its tender documents or cancel the public call for tenders if it is of the opinion that (1) the conditions of the call for tenders do not ensure the honest and fair treatment of tenderers, (2) do not allow tenderers to compete although they are qualified, or (3) are otherwise not compliant with the normative framework. This is clearly an important sanctioning power given to the AMP.

If the audit pertains to a public contract that has already been awarded, the AMP can make recommendations to the public body’s chief executive officer.

Furthermore, any public contract entered into in connection with a tendering or awarding process before the AMP has made its decision pursuant to the filing of a complaint will be automatically terminated upon receipt of a notice from the AMP to that effect. The same shall apply if the contract is entered into in breach of an AMP order.

When reviewing the public body’s management policies relating to a contract as a whole, the AMP may suspend the performance of any public contract or cancel such a contract, for a specified duration, if it is of the opinion that the breach observed so justifies.

Application to Municipal Contracts

Municipal body contracts such as municipalities, municipalities, metropolitan communities, intermunicipal boards, and public transit authorities (STM, RTC, etc.), as defined in the Act, are also covered and are subject to the complaint procedure. However, any decision made by the AMP in respect of a municipal body will be in the form of a recommendation to the body’s board.

Tools for Public Bodies and Businesses

On its website, the AMP provides various tools to public bodies and businesses with respect to its services. Deadline calculators are made available to help public bodies set certain deadlines, including the complaint filing dates, in connection with their tenders.

Conclusion

Businesses now have a new, inexpensive way to achieve a fair balance between themselves and their competitors before it is too late, provided that they act expeditiously and comply with all the specified terms. They will also have to refrain from taking legal action before the AMP has made a decision, or risk having their complaint dismissed.

In view of the powers given to the AMP and the substantial benefits this new system promises to deliver, it is likely that businesses will not hesitate to use this new oversight mechanism. The AMP must put in place the necessary protections in order to minimize the risk associated with these new rules so that they are not used by for dilatory or other strategic purposes.