Information Technology: the Quebec Government Changes its Procurement Rules

The Quebec government recently published the text of a draft regulation imposing a framework on information technology (IT) contracts entered into by public bodies.

The draft regulation was published at the same time as draft amendments to the three regulations currently governing supply contracts, services contracts and construction contracts entered into by public bodies.

Upon their adoption, these regulatory changes will effectively exempt IT contracts from the general framework created by the regulations governing services contracts and supply contracts entered into by public bodies.

The structure of the regulation governing IT contracts is similar to that of the regulations governing services contracts and supply contracts, and there is an evident intention on the part of the government to adapt the regulations to the specific nature of information technology.

Scope of application

The ambit of the draft regulation is specified in section 1, which defines an IT contract as any contract:

“… which seeks to ensure or enable functions of information processing and communication by electronic means, including the collection, transmission, display and storage of information.”

The use of the expression “functions of information processing and communication by electronic means”¹ is sufficiently broad to cover a wide range of products and services related to infrastructures, storage facilities, networking, workstations, mobile devices and software applications.

Also evident is the government’s intention to adapt the concept of options to the reality of IT, by more broadly defining the concept so as to extend it not just to the acquisition of an additional quantity of items but also to the technological evolution of a solution or to the provision of additional services of the same nature as those initially required, in accordance with the ongoing evolution of a project.

The main differentiator introduced in the draft regulation is the possibility for a public body, in the case of complex projects, to include a step termed “competitive dialogue” in the call-for-tender process.   

The goal of this new step is described as follows:

“… competitive dialogue is essentially aimed at defining or developing with each selected tenderer a solution likely to fulfil the public body’s needs, which solution will be the basis on which each tenderer will be invited to submit a final tender. In particular, the dialogue pertains to the technological means capable of fulfilling the public body’s needs, the timetable for providing the services, as well as various contractual terms and conditions.”

This competitive-dialogue stage seems to be inspired by amendments made to municipal statutes regarding contracts entered into by municipalities for the operation of cultural, recreational or community facilities and convention or trade fair centres. These amendments, made following the adoption of a special act of the legislature pertaining to the new amphitheatre in Quebec City, allow municipalities to hold individual discussions with each bidder after the bids are opened, in order to clarify technical and financial aspects of the contemplated projects, thereby facilitating the filing of a final submission that takes into account the upshot of those discussions.

The draft regulation thus opens the door to the inclusion of a stage of competitive dialogue where a public body’s needs involve “a high level of “complexity”. This wording gives broad discretion to public bodies wishing to avail themselves of the benefits of a process of competitive dialogue.

The exchanges that occur during the competitive dialogue stage must take place in the presence of an independent process auditor designated by the public body, such that the dialogue is held in a manner that is fair to all bidders and ensures the transparency of the ongoing contracting process.

If, after the competitive dialogue stage, there are a number of solutions likely to fulfill the public body’s needs, the draft regulation provides for the submission of a final tender consisting of a price quote and a demonstration of the quality of the solution discussed and defined during the dialogue.

Issues related to bidders’ intellectual property

From the standpoint of IT goods and services providers, the nature of communications during the “competitive dialogue” stage will necessitate precautions and undertakings regarding the protection of a bidder’s intellectual property disclosed in the bid process. By way of example, consider the preliminary functional analysis and the architecture of a solution proposed and discussed with representatives of the public body, who will simultaneously be having such discussions with other bidders in connection with the call for tenders.

In this regard it will be interesting to see what provisions public entities add to their call-for-tender documents in order to reassure bidders about the protection that will be afforded to their intellectual property.

Provisions specific to cloud-computing services   

The draft regulation also contains wording giving rise to the possibility of entering into a contract by mutual agreement for the provision of cloud-computing goods and services, provided the supplier or service provider has concluded a framework agreement with the Centre de services partagés du Québec (CSPQ). The draft regulation makes reference to an order in council adopted on October 28, 2015 wherein the Quebec government gives a specific mandate to the CSPQ to make available offers of cloud-computing services by calling for proposals for a number of different services with a view to concluding framework agreements with various providers.

We can thus anticipate the publication by the CSPQ of calls for proposals that include a description of the government’s requirements in terms of security and governance measures to ensure the confidentiality, integrity and availability of its documents and information.