Public Works and Government Services Canada (“PWGSC”) confirmed last month that it is reviewing the recent guilty plea to bribery charges in the US by Hewlett Packard’s Russian affiliate (“HP Russia”) in light of PWGSC’s recent Integrity Framework (the “Framework”). The Framework, which purports to “support accountability and integrity in [PWGSC’s] procurement and real property transactions” applies to all PWGSC-managed contracts and real property transactions regardless of dollar value. The Framework makes existing or would-be PWGSC suppliers “ineligible to do business with PWGSC” in light of a conviction or guilty plea for any of a series of enumerated “Canadian or similar foreign offences”, including among other things, bribery.

The Framework was introduced without much fanfare several months ago, but the implications of being rendered an ineligible supplier stand to be significant. There are no discretionary provisions in the Framework, which lists a 10 year period of debarment for ineligible suppliers unless a so-called Public Interest Exception applies. This means that following PWGSC’s review of the HP Russia matter, Hewlett Packard, an existing and significant supplier to the Canadian government could face a 10-year ban from bidding on government contracts and/or termination of existing contracts under the Framework. Stakeholders and the legal community are anxiously awaiting PWGSC’s decision and will review the same with a keen eye to how the Framework is interpreted as well as whether and how the Public Interest Exception is applied if at all.

In light of PWGSC’s now apparent resolve in effecting the Framework, as well as the most recent amendments to Canada’s Corruption of Foreign Public Officials Act, current and prospective suppliers to the federal government should be mindful of the reality that the actions of foreign subsidiaries any number of miles from Canadian soil, stand to have a significant impact on the bottom line here in Canada.

Author

Loni da Costa 
LdaCosta@blg.com
403.232.9696

Expertise

Corporate Commercial Litigation and Arbitration
White Collar Crime