Are You Affected by the New Act on Public Contracts?

2014-05-13

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AREYOUAFFECTEDBYTHENEWACTONPUBLICCONTRACTS?

S
TEVENBENTO*
ROBIC,
LLP
L
AWYERS,PATENTANDTRADE-MARKAGENTS

Inthewakeofthelegislativeamendmentsthatweremadefollowingthecorruption
scandalintheconstructionsectorwhichgaverisetotheCharbonneaucommission,
theQuebecgovernmentadoptedtheIntegrityinPublicContractsActwhich
amendedtheActRespectingContractingbyPublicBodies.

TheamendmentstotheActRespectingContractingbyPublicBodies(ARCPB)
include,amongothers,abroadeningofthedefinitionoftheconceptofapublicbody.
Inlightofthis,itisagoodideatoreviewtheprincipalcriteriathatcouldapplyto
organizationsthatcouldnowbequalifiedaspublicbodiesduetothebroadened
definitionintheARCPB.
AnorganizationthatqualifiesasapublicbodyinthescopeofARCPBmustrespect
theprovisionsofthatAct.Atthisstage,theimplicationsarelimited.Forthemoment,
exceptforcontractswiththeCityofMontreal,onlycontractsinvolvinganexpenditure
equaltoorgreaterthantenmilliondollarsaresubjecttotheauditingprocedureby
theAutoritédesmarchesfinanciers(AMF).However,governmentdecreeswill
specifyfromtimetotimeothertypesofcontractstowhichtheARCPBwillapply.
Lookingatthetrendintheconstructionsector,everythingpointstoareductioninthe
valueofcontractssubjecttothelawinthenearfuture,whichwouldresultinmore
transactionsbeingsubjecttotheARCPB.
CriteriaforBeingQualifiedasaPublicBody
TheARCPBcoverpublicmarketsandpublicbodies.Thus,foranorganizationtobe
subjecttotheARCPB,itmustsatisfythecriteriaoutlinedintheAct.

TheARCPBliststhefollowingtypesofcontractswhicharesubjecttotheAct:
procurement,construction,servicesandothers.ThissameActclassifieslegal
entitiesthatarepublicbodiesintothefollowingsevencategories:

SectionLegalEntities

©CIPS,2014.*FromROBIC,LLP,amultidisciplinaryfirmofLawyers,andPatentandTrade-markAgents.Published
intheSpring2014(Vol.17,no.4)Newsletterofthefirm.Publication068.176E.

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4.(1)Governmentdepartments
4.(2)Bodiesallorpartofwhoseexpendituresareprovidedforin
thebudgetaryestimatestabledintheNationalAssembly
otherwisethanunderatransferredappropriation
4.(3)Bodieswhosepersonnelisappointedinaccordancewiththe
PublicServiceAct
4.(4)Bodiesamajorityofwhosemembersordirectorsare
appointedbytheGovernmentorbyaministerandatleast
halfofwhoseexpendituresarebornedirectlyorindirectlyby
theConsolidatedRevenueFund
4.(5)Schoolboards,etc.
4.(6)Healthandsocialservicesagencies,etc.
4.Al.2ApersonappointedordesignatedbytheGovernmentora
minister,togetherwiththepersonneldirectedbytheperson,
intheexerciseofthefunctionsassignedtothepersonby
law,theGovernmentorminister

Ifanorganizationfallsintooneofthesevencategoriesmentionedabove,itis
possiblethattheARCPBwillapplytoit.
Asanexample,anorganizationthatreceivesfundingfromtheQuebecgovernment,
otherwisethanunderatransferredappropriationinthebudgettabledattheNational
Assembly,couldqualifyasapublicbodyaccordingtotheARCPB.Todetermineifan
organizationqualifiesasapublicbody,thesourceofthefinancialaidmustbe
analyzed.Iftheorganizationqualifiesasapublicbodyaccordingtothe
aforementionedcriteria,theARCPBandtheAMF’sguideswillapplytoit.

TheApplicationoftheARCPB

Contractsbetweenpublicbodiesandanyotherorganizationmustrespectthe
protectionmeasuresputinplacebytheARCPB.ThisActprovidesfor,among
others,thenecesssityofpriorauthorizationofthirdpartyorganizationstoreceivea
publiccontract.TheAMFisresponsibleforissuingpermitstoorganizationsthatwish
tocontractwithapublicbody.
TheAMFcurrentlyrequirespermitsfororganizationsinthreeparticular
circumstances.Forthemoment,thethreefollowingcircumstancesarerelatedto
contractswiththeCityofMontrealorapublicbody:
-Organizationsthatarecompetinginacallfortendersorawardprocessfor
constructionandservicecontractsandsubcontractsandpublic-private
partnershipcontractsinvolvinganexpenditureequaltoorgreaterthan$10
millionandforwhichtheawardprocessbeginsonDecember6,2013.

-Organizationsthatarecompetinginacallfortendersoranawardprocess
forcontractsfortheconstruction,reconstruction,demolition,repairor

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renovationofroads,waterworksandsewerservicesofCityofMontreal
involvinganexpenditureequaltoorgreaterthan$100,000andforwhichthe
awardprocessbeginsonOctober23,2013,aswellasforsubcontractsofthe
samenaturedirectlyorindirectlyrelatedtosuchcontractsandinvolvingan
expenditureequaltoorgreaterthan$25,000.

-OrganizationsthatarebiddingonacontractlistedintheOrdersinCouncil-
CertaincontractsoftheCityofMontreal.

.
Thegovernmentappointsbydecreethevalueandtypesofcontractsthatmay
requireapermitfromtheAMF.
TheApplicationoftheAMFGuide
TheAMFcreatedaguideforhelpingorganizationswhichwishtoobtainorrenewa
permitforcontracting/sub-contractingwithapublicbody(AMFGuide).TheAMF
Guideisahelpfulresourcefororganizationsthatcontractwithpublicbodiesand
mustdiscloseinformationtotheAMFundertheprovisionsoftheARCPB.Infact,the
AMFGuideappliestoeverypersonwhowishestocontractwithapublicbodyfora
contractthatrequirespriorauthorization.
AnelectroniccopyoftheAMFGuidecanbefoundat
.
Conclusion

Itisimportanttokeepupwithdevelopmentsregardingdecreesthatmaybeissuedin
connectionwiththevalueandtypeofcontractsinvolvingpublicbodiesthatrequire
permitsfromtheAMF.WhenthecontractsaregovernedbytheARCPBorits
applicationguide,theorganizationthatwishestocontractwithapublicbodymust
obtainpriorauthorizationfromtheAMF.Oncethisconditionismetbythecontracting
organization,thepublicbodywillhavetocomplywithvariousobligationspertaining
toinformationandauditinginaccordancewiththeARCPB.

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