Public Interest Exceptions (PIE)

A Public Interest Exception (PIE) is a provision that allows the Government of Canada to award a contract to a supplier that is otherwise ineligible or suspended, when the award is necessary in the public interest. It belongs to the federal supplier integrity, ineligibility and suspension regimes, and it is set out in the Ineligibility and Suspension Policy administered by Public Services and Procurement Canada (PSPC).

The recognised reasons include a pressing emergency, the supplier being the only party capable of performing the work, the need to maintain emergency stocks, and significant adverse effects on health, national security, safety, public security, economic or financial well-being, or federal administration. The term is also used in federal solicitation instructions to describe when Canada may contract with a supplier that would otherwise be excluded because of specified convictions or other integrity-related grounds.

Grounds that support a Public Interest Exception

The PSPC policy identifies a defined set of circumstances in which a PIE can be justified:

• Pressing emergency: a situation in which delay would injure the public interest.
• Sole capability: the supplier is the only person capable of performing the contract.
• Emergency stocks: the need to maintain sufficient stocks to guard against possible shortages.
• Substantial adverse effects: significant harm to health, national security, safety, public security, or economic or financial well-being.

The Canada Revenue Agency's Supplier Integrity Directive lists similar examples, including significant adverse effects on the functioning of federal administration.

How a PIE works under the Ineligibility and Suspension Policy

The policy permits a contract or real property agreement to be awarded to an ineligible or suspended supplier where a PIE is justified. The Registrar may require the supplier to enter into an administrative agreement before the award. Earlier policy wording, preserved in the 2015 version of the policy, states that the supplier must conclude an administrative agreement with the Minister on terms needed to protect the integrity of the procurement.

CanadaBuys guidance explains that an administrative agreement may permit the award of a contract to an ineligible or suspended offeror where a PIE applies and timely execution is not critical.

PSPC also has a directive for after-hours situations. If a potential supplier is on the Public Ineligibility and Suspension List, an award may still be made when the situation is after hours and the award is in the public interest. A PIE may be invoked for the procurement or real property agreement.

Where the term appears in federal solicitation documents

The federal Standard Instructions for competitive requirements state that Canada may contract with a bidder or affiliate affected by specified integrity offences when required by law or when Canada considers it necessary in the public interest. The examples listed are no other capable supplier, emergency, national security, health and safety, and economic harm.

How a PIE differs from a Government Contracts Regulations exception

A PIE is separate from the exceptions in the Government Contracts Regulations that allow a contracting authority to proceed without soliciting bids. Those exceptions cover cases such as a pressing emergency in which delay would be injurious to the public interest, or circumstances in which soliciting bids would not serve the public interest. They are described in the Treasury Board Contracting Policy and in the CanadaBuys guidance on determining the sourcing strategy. The first concerns whether a competition is required. A PIE concerns whether an ineligible or suspended supplier may receive the award.

What a Public Interest Exception means for a supplier

A PIE is not a general waiver from procurement requirements. The cited policies tie it to specified public-interest circumstances and allow integrity safeguards through an administrative agreement. A supplier affected by ineligibility or suspension should:

• determine whether the contracting authority is invoking a PIE under the applicable integrity policy or solicitation terms;
• provide the information the government needs to assess the public-interest grounds;
• comply with any conditions imposed by the Registrar, Minister, deputy head or contracting authority; and
• enter into an administrative agreement if one is required as a condition of the exception or award.

Bid teams should read the integrity clauses in each solicitation closely, because the wording on when Canada may contract with an affected bidder is set out in the instructions that apply to that requirement.