Debarment Heads North of the Border
In the not so very distant past, companies mainly needed to worry about exclusion from public contracting in the United States. However, the exclusion trend has caught on internationally. Recently, Canada has revised their exclusion policies to require companies to certify that neither the company nor its affiliates have committed a list of criminal offenses anywhere in the world dating back 10 years. Any offense within the 10 year period excludes the company from bidding on the contract. The first to be notified of its exclusion in Canada was Siemens, which had the well-publicized guilty plea in 2008 for corruption-related offenses in the United States and Germany. However, many more large companies are faced with potential exclusion. As exclusion regimes widen in popularity, companies need to be ever more aware that a conviction in one country may have significant collateral effects on their ability to participate in public contracting in another country for an extended period of time.
One of the key differences between the United States’ debarment regime and Canada’s exclusion regime is the concept of present responsibility. In the United States, a contractor has the opportunity to demonstrate to the Suspending and Debarring Official that it appreciates the significance of the misconduct and has appropriately remediated the causes such that a similar incident is unlikely to occur again. The Suspending and Debarring Official then has the discretion to lift the debarment. In Canada’s Integrity Framework, no similar discretionary provision exists. Instead, the contractor is automatically excluded for a ten year period from the time of the conviction. The only exception is a Public Interest Exception, which allows the government to contract with an excluded company on the basis that no other supplier is capable of performing the contract, an emergency, national security, health and safety, or economic harm. Thus the impact of a conviction on potential work in Canada is more severe than in the United States as Canada’s exclusions are automatic and last for three times as long as average debarments in the United States.