In a rare decision unfavourable to the Autorité des marchés publics (“AMP”), the Québec Superior Court recently annulled the registration of a general contractor in the Register of Enterprises Ineligible for Public Contracts (“RENA”). According to the Court, the AMP had not sufficiently assessed the opportunity to impose corrective measures before resorting to the ultimate sanction, namely, ineligibility for public contracts. The AMP even dismissed outright the corrective action plan submitted by the contractor, without explaining why the plan was inadequate.
The Court’s review of the legislative debates shows that the legislator intended to favour rehabilitation before considering exclusion. The objective is to support businesses and maintain a balance between two imperatives: making integrity an essential condition for public contracts, while avoiding systematically shutting out businesses that are capable of rehabilitation.
Here are three key lessons businesses should take from this decision:
- Rehabilitation is the rule, while revocation of authorization is the exception.
- The AMP is required to give businesses a fair chance, unless it can demonstrate that corrective measures are doomed to failure.
- Businesses in the AMP’s crosshairs should be proactive and present a credible corrective action plan. In this case, the plan proposed by the contractor provided for: a) regular monitoring of electronic communication; b) a monthly audit of contractual commitments; and c) a structured mechanism ensuring functional separation between the contractor and any external entity (para. 140).
The decision is welcome for businesses whose ability to contract with public bodies is essential to the continuity, if not the survival, of their operations. It may even have repercussions beyond the integrity regime for public contracts. Indeed, any authority vested with discretionary power to impose corrective measures could be required to exhaust the option of rehabilitation before considering harsher sanctions, such as the revocation of a permit or authorization. In other words, a genuine opportunity for redress should be offered before the axe falls.
At the time of publication, a motion for leave to appeal the decision to the Québec Court of Appeal was pending.