Canada: Public Works Canada Bans Convicted Bid-Riggers From Future Bids (Even If They Were Leniency Recipients)

A recent change in the integrity policy of the Department of Public Works and Government Services Canada (Public Works) has resulted in a prominent consulting firm being effectively banned from making future bids for services to the department.

On July 30, 2012, Corporate Research Group Ltd. (CRG) pleaded guilty to a criminal charge of bid-rigging for real estate advisory services contracts with the federal government. It was fined $125,000. According to the Competition Bureau news release at the time, CRG and Louis Facchini, who ran First Porter Consultancy, had submitted coordinated bids under an agreement not disclosed to Public Works.

Under a "leniency exemption," Public Works had permitted firms operating under leniency programs, such as the Bureau's Leniency Program, to continue to act as suppliers. That has now changed.

On November 9, 2012, Public Works implemented Policy Notification PN-107, which revised the integrity provisions of the department's Supply Manual and its Standard Acquisition Clauses and Conditions Manual. Most notably, Public Works has removed the leniency exemption from its integrity policy. Now, Public Works "will not enter into a contract or real property transaction, or accept bids from companies convicted of listed offences unless they have received a pardon, or capacities restored by Governor-in-Council". The change is intended to "strengthen the integrity of procurement and real property transaction processes".

As a result of this change, Public Works will no longer accept bids from companies like CRG that have been convicted of a listed offence (which includes criminal offences under the Competition Act), even if they participated in the Bureau's Leniency Program. In addition, existing contracts with such suppliers will be subject to "heightened scrutiny and oversight", with "rigorous controls" put in place in order to "protect taxpayers' interests".

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