On June 1st, 2016, the new Regulation respecting contracting by public bodies in the field of information technologies (the “Regulation”), which now allows Quebec public bodies greater flexibility to negotiate complex Information Technologies (“IT”) service agreements, came into force . It supplements the Act respecting contracting by public bodies[1] (the “Act” which establishes the legal framework for contracting with public bodies in Québec, including among others the Québec government and its departments, certain Crown corporations, universities, hospitals, towns and municipalities. It applies to contracts and sub-contracts of a value of $1M or above.

The coming into force of the Regulation is a significant and welcomed development as it will allow for greater flexibility in the negotiation and conclusion of IT contracts with public bodies in Québec, in addition to bringing Quebec closer into line with other Canadian provinces in this regard. It follows the public acknowledgement by the Quebec Treasury Board Secretariat (the “Secretariat”) that news rules specific to IT agreements were required in order to increase competitiveness in the procurement process for IT services, lower costs and shorten delays in the execution of IT contracts[2].

The Regulation generally applies to supply contracts as well as service contracts “which are intended for the acquisition of goods or the provision of services in the field of IT”. The Regulation should apply whenever a significant portion of the value of the contract is to “ensure or enable functions of information processing and communication by electronic means, including the collection, transmission, display and storage of information”.

The highlights of the Regulation are as follows:

  • Ability for public bodies to award a contract following a call for tenders involving a competitive dialogue with suppliers or service providers.[3]. The Regulation opens the possibility for a public body to enter into a dialogue with selected bidders to define solutions which each bidder can then use as the basis for its final tender. It can only take place in calls for tenders involving 2 stages.
  • Introduction of the concept of total cost of acquisition[4]. The Regulation seeks to provide public bodies with better information with respect to the predictability of costs. In this regard, public bodies can now take into account the total costs of the acquisition of goods to determine the lowest price or adjusted price for the awarding of certain contracts. The total of acquisition includes “costs not included in the tendered price that would be borne by the public body during the useful life of the goods acquired”. These costs must be based on “quantifiable and identifiable elements identified in the tender documents”.
  • Adoption of specific rules for task order contracts in the field of IT. The Regulation confirms that public bodies can continue to rely on task order contracts with service providers “when the procurement requirements are recurrent and the number of requests and the rate or frequency at which they are to be performed are uncertain”[5]. The maximum duration for such contracts remain 5 years.
  • Contracts for the acquisition of cloud goods or services by mutual agreement[6]. The Regulation introduces new specific provisions with respect to the acquisition of cloud goods and services by public bodies.
  • Affirmative action program[7]: The Regulation provides that suppliers, service providers and subcontractors in the field of IT which employ more than 100 persons are required “to have made commitment to implement an affirmative action program that complies with the Charter of human rights and freedoms (chapter C-12) and hold an attestation to that effect issued by the Chair of the Conseil du trésor.” This requirement existed already in the previous set of rules that applied to supply contracts and service contracts with public bodies. It continues to apply only to contracts with government departments and a restricted number of other public bodies (i.e. generally, contracts with Crown corporations, schools and universities, among others, are excluded from the application of this requirement).
  • Performance evaluation[8]. Public bodies are required to proceed to a performance evaluation of suppliers and service providers within 60 days of the end of a contract, where such contract has a value of 100,000$ or more. Under the old set of rules applicable to service contracts, such evaluation was required only in where performance had been considered unsatisfactory. In the case of cloud goods or services contracts concluded by mutual agreement, the chief executive officer of the public body must send the performance evaluation to the Centre des services partagés du Québec.
  • Electronic submission of tenders.[9] Suppliers or service providers are now authorized to submit tenders electronically. After May 31, 2019, filing of both a paper and an electronic tender by the same bidder will lead to automatic rejection of the bidder.