In my October 30, 2013 post I highlighted three measures taken by Quebec to combat corruption and collusion. In the last 10 days the government has announced additional measures with the result that Quebec is fast becoming a leader in the field.

On November 6, the government announced that as of December 6, 2013 the threshold for bidder and sub-contractor clearance by the Autorité des marchés financiers will move from $40 million to $10 million.

On November 12, the Ministère des Transports announced a long series of concrete steps  to better track the cost of road construction and maintenance, and to greatly reduced “extras” — those additional amounts claimed by contractors as a result of unexpected conditions or project changes.

The next day, the government tabled Bill 61: “An Act mainly to recover amounts paid unjustly by public bodies in relation to certain contracts in the construction industry.” This statute with an awkward title is remarkably succinct yet potent. It introduces numerous measures to facilitate retrieval of overpayments made to the builders, suppliers and engineers.

Its main features are as follows:

  1. It creates an assumption. If it is proved (or admitted) that fraud or fraudulent tactics have been used by an enterprise during the tendering, award or management of a public contract, then the public body concerned is presumed to have suffered a damage. The amount of the damage will be calculated according to a fixed percentage of the total contract amount paid by the public body. The percentage will be fixed by Government and published in the Official Gazette of Quebec.
  2. It reverses the burden of proof. It makes directors and representatives of an enterprise jointly and severally liable, unless they can prove that at the time of the fraud or fraudulent tactics  they acted with care, diligence and skill.
  3. It centralizes proceedings with the Minister of Justice. Unless otherwise authorized by the Minister, he has the sole power to institute proceedings on behalf of public bodies and municipalities and to settle with any enterprise or individual. This is to streamline proceedings, unburden the courts, ensure consistency and avoid “sweetheart” deals. It is  important to bring closure and allow the construction industry to right itself as quickly as possible.
  4. The Minister may, with respect to any enterprise, create a reimbursement program to facilitate the payment of damages. The objective here is not to decimate a very important industry; it’s to find a way to reconcile reimbursement obligations with the need to preserve as many enterprises as possible, so as to preserve jobs, retain skills and foster competition. Each program will be published in the Official Gazette of Quebec.
  5. It amends the “Act respecting contracting by public bodies” to provide that certain offenses, while they must be taken into account by the Autorité des marchés financiers, will no longer automatically disqualify enterprises from being authorized to bid on public contracts. It is most likely that these enterprises would, among other things, have to demonstrate that they have put in place and are implementing adequate procedures to prevent fraud and fraudulent activities.