ARCHIVED Integrity Provisions

Introduction

Public Works and Government Services Canada (PWGSC), through this Policy Notification (PN), is updating the integrity provisions surrounding its procurement and real property transactions. The updated provisions include a new public interest exception and removal of the leniency exemption.

Effective Date

Effective immediately, contracting officers are instructed to modify their solicitation documents to reflect this revised approach.

Background and Revisions to the Current Policy

Over the past several years Public Works and Government Services Canada has implemented numerous measures that demonstrate our commitment to doing business with companies and individuals that respect the law and act with integrity. Continuing this effort, further steps are being taken to strengthen the integrity of the procurement process.

Current exemptions that permit convicted individuals and companies to continue doing business with the Department are being revised. Given the significance that anti-competitive crimes have on the integrity of the procurement process, participation in programs such as the Competition Bureau's Leniency Program will no longer provide an exemption to the integrity provisions.

In addition, in order to protect the public interest in certain circumstances, the Department is introducing an exception where it may be necessary to do business with a company or individual convicted of an offense. This exceptional measure will apply for reasons which include but are not limited to the following:

• Only one person is capable of performing the contract;
• Emergency;
• National security;
• Health and safety;
• Economic harm.

See Annex A - Background, for more details.

Revisions to the Supply Manual and to the Standard Acquisition Clauses and Conditions (SACC) Manual

The Supply Manual will be revised within the next week to reflect the latest procedures.

The new Standard Instructions 2003 are available now as an example, and the remaining Standard Instructions and General Conditions with the Code of Conduct provisions will be revised within one week.

See below for a complete list of SACC clauses that will be modified.

Contact

Inquiries regarding this process may be sent to the Acquisition Policy and Process Directorate at the following e-mail address: RevisedCodeConduct.RevisionCodeConduite@pwgsc-tpsgc.gc.ca.

Annex A - Background: Ongoing Efforts to Strengthen the Integrity of Procurement and Real Property Transactions, Initial Measures

Effective November 2007, and as part of the Federal Accountability Act and its action plan, Public Works and Government Services Canada (PWGSC) included a Code of Conduct for Procurement in its solicitation documents. The Code of Conduct for Procurement was intended to summarize existing law and policy without introducing new obligations for either suppliers or public servants.

Bidders formerly certified with their bids that they had read the Code of Conduct for Procurement and agreed to be bound by its terms. The penalties and sanctions for non compliance were contained in the applicable law or policy.

PWGSC included the following categories to render suppliers ineligible to bid on procurement contracts:

• frauds against the government under the Criminal Code;
• frauds under the Financial Administration Act; and
• payment of a contingency fee to a person to whom the Lobbying Act applies.

Building on the Integrity Provisions

Effective October 2010, PWGSC added the following:

• corruption, collusion, bid-rigging or any other anti-competitive activity.

Exemptions to the provisions were granted under the following circumstances:

1. in cases in which a pardon (now called a record suspension) had been granted;
2. in cases in which capacities had been restored by the Governor-in-Council; or
3. in cases in which the company or individual had been part of a leniency program.

Strengthening Accountability and Integrity

Effective July 2012, PWGSC added the following new categories to render convicted companies and individuals ineligible to bid on contracts:

• money laundering;
• participation in activities of criminal organizations;
• income and excise tax evasion;
• bribing a foreign public official; and
• offences in relation to drugs.

For the first time, PWGSC also applied its integrity provisions to its real property transactions, such as leasing agreements, letting of space, and acquisition and disposal of properties.

Again, exemptions to these provisions were provided under the following circumstances:

1. in cases in which a pardon (now called a record suspension) had been granted;
2. in cases in which capacities had been restored by the Governor-in-Council; or
3. in cases in which the company or individual had been part of a leniency program.

Enhanced Integrity Provisions

Effective immediately, PWGSC is clarifying the measures to further strengthen the integrity of procurement and real property transaction processes.

Removing the Leniency Exemption

PWGSC is removing the leniency exemption. Effective immediately, the department 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 revised provision will be implemented as follows:

1. For existing contracts with companies currently in a leniency program, PWGSC will honour its contractual agreements as legally obligated; however, heightened scrutiny and oversight, and rigorous controls will be imposed to protect taxpayers’ interests.
2. For future contracts for which consideration may include companies currently in the leniency program, any bid received for contracts or real property transactions will be found non-responsive and therefore will not be accepted.
3. Current standing offers and supply arrangements will be systematically replaced to include the revised provision. The goal of this implementation process is to apply the revised provision as soon as practicable.

Protecting the Public Interest

An exception will be included in the integrity provisions, to be applied in circumstances in which it is necessary to the public interest to award a contract to, or enter into a real property agreement with, a company or individual that has one of the convictions listed under PWGSC’s provisions.

For example, the public interest exception could apply to protect the health and safety of Canadians in a public health emergency, such as situations in which life-saving pharmaceutical products can only be obtained through one company.

The public interest exception will be applied on a case-by-case basis. In such cases, PWGSC would also impose additional stringent controls, administrative measures, and monitoring in the contract or real property agreement.

Reducing Administrative Burden

PWGSC has simplified the verification process, which is one of the integrity requirements for bidders and proponents of real property transactions. The requirements are to:

• certify that neither bidders nor proponents seeking to enter into a contract or real property agreement nor their affiliates have any of the convictions listed under PWGSC’s provisions; and
• provide a complete list of names of all individuals who are currently members of their board of directors.

PWGSC will verify this information. Only when additional verifications are needed will a signed Criminal Record Verification Check consent form be required to allow additional checks to be conducted before a contract is awarded. Should a consent form be requested by PWGSC, it will be maintained for a two-year period.

Conclusion

PWGSC is committed to an ongoing program of monitoring its procurement and real property transactions to ensure the highest standard of integrity, protect the interests of taxpayers, and ensure ethical behaviour. As part of this program, additional measures may be adopted on an as-needed and as-required basis.