Public Interest Exception (PIE)

A Public Interest Exception (PIE) is a decision by a federal contracting authority to enter into a contract with a supplier that is ineligible or suspended under Canada's Ineligibility and Suspension Policy. The decision rests on a finding that refusing to contract with that supplier would be contrary to the public interest. The exception belongs to the federal Integrity Regime, which Public Services and Procurement Canada (PSPC) administers.

A PIE is not a general exemption from procurement rules. It is a case-specific exception to the consequences of supplier ineligibility or suspension. The government applies it. A supplier cannot claim it. The policy sets out the public-interest grounds and requires the supplier to conclude an Administrative Agreement with the Minister before the exception can be used. The full conditions are in the Ineligibility and Suspension Policy.

Grounds the policy recognises for a PIE

The Ineligibility and Suspension Policy lists the circumstances in which a PIE is available:

• A pressing emergency in which delay would injure the public interest.
• The supplier is the only person capable of performing the contract.
• The contract is essential to maintain sufficient emergency stocks and safeguard against shortages.
• Not contracting with the supplier would have a significant adverse impact on health, national security, safety, security, the economic or financial well-being of Canadians, or the functioning of part of the federal public administration.

The decision is discretionary and depends on the facts of each procurement.

The Administrative Agreement condition

PSPC or another federal department or agency may rely on a PIE only where the supplier has concluded an Administrative Agreement with the Minister of Public Services and Procurement. The agreement sets terms and conditions intended to safeguard the integrity of the procurement process. A public-interest ground alone is not enough. Both conditions must be met, and the policy applies to contracts entered into by PSPC and by other federal departments and agencies.

How PIE appears in solicitations and contract administration

The term appears in the standard instructions for both competitive and non-competitive requirements. Those instructions state that Canada may contract with a bidder or affiliate affected by a listed integrity offence when Canada considers it necessary in the public interest. Examples include an emergency, national security, health and safety, or the absence of another capable supplier. See the standard instructions for competitive requirements and the standard instructions for non-competitive requirements.

Where all bids are found non-responsive because of a listed relevant conviction or act, the instructions allow Canada to invoke the exception. Only bids containing the required declaration about the offence or act are then considered.

The exception also reaches contract administration. Under CanadaBuys guidance on assignment of contracts, a buyer may refuse an assignment or request a PIE from the deputy head or equivalent when the proposed assignee or an affiliate is ineligible or suspended.

DCC and the archived after-hours directive

Defence Construction Canada uses the same concept in its Procurement Code of Conduct. DCC states that a PIE may apply when it determines that contracting with an ineligible or suspended supplier is in the public interest. It applies the exception case by case and requires an administrative agreement between PSPC and the supplier. The code is available from DCC.

PSPC also published an after-hours directive. It allowed a contract or real-property transaction with a supplier on the public list in an after-hours situation when entering into it was in the public interest. That directive is marked archived, so it is historical guidance and not current standalone policy.

What a PIE means for a supplier bidding on Canadian public contracts

A supplier cannot rely on a PIE as a route back into federal work. Disclose any relevant conviction, offence or act wherever a solicitation requires a declaration, because only bids with the required declaration are considered when all bids are otherwise non-responsive. If an exception is under consideration, expect the contracting authority to decide whether a public-interest ground applies, and expect to conclude an Administrative Agreement with the Minister. Suppliers planning to assign a contract should also check whether the assignee or any affiliate is ineligible or suspended, since that can lead the buyer to refuse the assignment or seek a PIE.